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Just can't get it right

post #1 of 13
10/13/08 at 12:31pm
Thread Starter 
I have read the Dave Ramsey books and attempted the FTJ project, but couldn't make it through the spending freeze.

Our monthly income and debt are pretty much equal to each other (if we make $3200 a month, we spend exactly that). We are a one income family with money going to 401K (dropped down to the bare minimum investments) and $50 a month going in to savings (this will be used for Christmas).

I make a little extra money babysitting, maybe $400 a month. We have $52,000 in debt and a $136,000 mortgage.

My problem is that I don't budget for groceries or incidentals (Rx, copays, gas, gifts). I really want to go cash only (we do not use credit cards). If there is money in our checking account it gets spent. We have a hard time saying no to people when asked to do something fun.

How can I get control and build up the savings or put any "extra money" toward the debt? I know what I need to do, but just can't get it together! I know the answers are obvious, but would like to hear some of your stories.

Please share what has worked for you.
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post #2 of 13
10/13/08 at 3:24pm
Kelly, Thanks for coming forward! I think a lot of people are in the same boat as you are. Based on what you've said, these are my suggestions:

Since you said you don't currently budget for groceries, that's a great place to start. Do you know how much you're currently spending? Groceries are one of the easiest places to save on your monthly budget. Do you clip coupons? Do you base your meal plans around what you have and what's on sale? By doing that if you aren't already, you could easily save $100-$200 (or more) per month.

As far as gifts go, I'd suggest setting up a gift spreadsheet and figure out a yearly budget. Shop for people all year long, and when you find a great deal on something with someone specific in mind, snap it up!

Instead of waiting for friends to ask you to do something that's expensive, invite friends to do something on YOUR terms and on your own budget. Some of my favorite evenings involve just having friends over for a take-n-bake pizza and a couple of beers - super cheap, but lots of fun!

I think the main thing here is to track your spending. It sounds like maybe you're letting impulse spending and lack of planning get the better of you. One idea is to keep a spending journal in addition to going to an all-cash system.
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post #3 of 13
10/13/08 at 4:19pm
Thread Starter 
Thanks for the advice. I agree with it all. My grocery spending IS out of control. I am also going back through the FTJ steps and starting today, enforcing the spending freeze. I plan on keeping a journal as well and I'll be posting or blogging my successes. I am really interested in a simpler lifestyle and slowing down. Having all of these debt issues makes me feel very anxious about life. I know it has been said that when you have debt, your life is more disorganized.
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post #4 of 13
10/13/08 at 6:31pm
Willpower! Also try writing down expenses in a spending log. Keep all receipts and write down where every penny went. That way at the end of the month you can add them up and look at just how much you spent on something you don't really need (like Starbucks). Stop and think what else you could have bought with that money (groceries, pay down debt, etc).

Alot of it is just a mind set you need to get into. If you really want to get out of debt you have to set a budget that is workable for your family, and stick to it. Good luck!!! It's hard work I know.
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post #5 of 13
10/13/08 at 7:06pm
Before you or your hubby buy something, ask yourselves, "Do we NEED it, or WANT it". We used to spend spend spend but I finally had to put my foot down... we don't NEED a Roomba when we can buy a cheaper vacuum at Wal-Mart.
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post #6 of 13
10/14/08 at 4:45am
If the 3-week spending freeze is too hard, you can certainly modify it. Try a one-week freeze, or a longer freeze where you get $20 of "fun" money each week (or whatever you feel is a challenging number for you). I really think it's a great place to start, because it forces you to change your mindset. You start looking for ways to use what you already have, get what you want for free, etc.
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post #7 of 13
10/14/08 at 6:23am
Quote:
Originally Posted by Harina View Post

Before you or your hubby buy something, ask yourselves, "Do we NEED it, or WANT it".

Quote:
Originally Posted by Kim View Post

If the 3-week spending freeze is too hard, you can certainly modify it. Try a one-week freeze, or a longer freeze where you get $20 of "fun" money each week (or whatever you feel is a challenging number for you). I really think it's a great place to start, because it forces you to change your mindset. You start looking for ways to use what you already have, get what you want for free, etc.


These points are key! I think if you can consciously ask yourself these questions, it makes a big impact on what you are about to spend your money on....and then you become creative in the ways you use things you already have and even find that you can use things in a different way.

Good luck
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post #8 of 13
10/14/08 at 10:21am
thank u so much for asking! this is me and dh to a "T" have tried things over and over again, just cant get the natch down! i have all good intentions at the beginning of the month, but it all gets blown to the side!
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post #9 of 13
10/15/08 at 10:14pm
Budgeting can be a real drag. So make a game of it! Get the family together and find an activity that you all can do for say $50.00 or less. Now you have the prize!

So how do you win? You win by saving that amount of money twice ($100.00).

You have a jar, a box or any kind of a container to hold the money in as it builds to your goal of $100.00.

So where does the money that goes in the jar (box, container) come from?

1. Change in your pocket at the end of the day.
2. Money received from recycling ( I make at least $10 per month this way with little or no effort).
3. Family coupon clipping. Everyone spends time on Sunday siting around checking the coupons for things you actually buy.
4. Set a weekly food budget and anything left over each week goes into the jar.
5. For go a dinner out... Calculate the savings and put them in the jar.
6. Make your lunches, as a family, for a week and put the money you save in the jar. This can really add up over time.
7. Walk more drive less and put the extra cash in the jar.

Be creative... I am sure you can come up with many more ideas. But the whole idea is to make it fun and challenging and to reward yourselves for a job well done.
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post #10 of 13
10/16/08 at 5:29am
I would figure out my bare minimum on the monthly bills-not groceries or incidentals just recurring monthly bills that must be paid. After that, I would take the remaining figure to be used for incidentals and I would pull it out of the bank each pay period and use an envelope budgeting system labeled with spending categories like groceries, gifts, fun money, etc., when the money is gone it is gone-no more spending. You should also have a savings envelope or you could arrange to have savings taken first by direct deposit. These are just a few things that worked for our family, but we are still tweaking it. It did however, get us debt-free in four years and we own three vehicles outright, one we paid 10,000 cash for.
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