Budget Budge-it Budget - Page 4

Gemini Cricket · 08-27-2007, 01:16 PM

Quote:

Originally Posted by BarTopDancer

It's only not bad if you eat it...

I'm from Hawai'i. I will.

Morrigoon · 08-27-2007, 01:29 PM

GC: Start by figuring out how much you'd like to save, and put that in your budget first. Then figure out the expenses you HAVE to spend on. Then use the remaining amount for things you WANT to spend on.

If you put savings last, it'll never fit.

Kevy Baby · 08-27-2007, 01:33 PM

I say write checks for everything. That way, when you run out of checks, you'll know you don't have any money left.

Gemini Cricket · 08-27-2007, 01:34 PM

Quote:

Originally Posted by Morrigoon

GC: Start by figuring out how much you'd like to save, and put that in your budget first. Then figure out the expenses you HAVE to spend on. Then use the remaining amount for things you WANT to spend on.

If you put savings last, it'll never fit.

That's a great idea.
I never thought about it that way.

I think the thing that gets me hung up is the huge balance on my big credit card and my car loan. I don't see it being whittled down fast enough so I panic or tend to give up. Lacking the patience to see the balance go away is a downfall of mine.

Kevy Baby · 08-27-2007, 01:40 PM

Quote:

Originally Posted by Gemini Cricket

I think the thing that gets me hung up is the huge balance on my big credit card and my car loan. I don't see it being whittled down fast enough so I panic or tend to give up. Lacking the patience to see the balance go away is a downfall of mine.

I have mentioned this before, but this is a good time to bring it up again.

Susan and I were faced with a fairly large amount of debt because of credit cards and student loans (mostly the former). We worked with Springboard, a non-profit consumer credit management outfit. We worked with them to secure reduced or zero interest on all of our credit cards and worked out a payment plan and they can help you budget as well. They have an office in Santa Ana.

We were able to pay off about $27,000 in unsecured debt in about 4-1/2 years. If you CC debt is under a couple of thousand, it probably is not a good solution - just budgeting is fine. I just wanted to mention our experience.

Gemini Cricket · 08-27-2007, 01:56 PM

KB ~ My debt's not that big. It's a great service. I did talk Ralphie into doing it. It's a huge help for him.

I have some shopping to do tonight for home lunch stuff.

Alex · 08-27-2007, 02:04 PM

If that is an issue for you, I'd suggest spending a bit of time doing a spreadsheet.

Take your current debts and lay them out showing how the balance changes depending on how much you pay to them each month (don't forget to include the interest). And include how much you spend total on the debt.

At your point in life I wouldn't really focus on saving (except for some truly emergency fund) but on eliminating the big debt. It can be quite an incentive to see that if you put an extra $50 into the credit card payment each month that it pays off six months sooner (for example) and that every extra $1 you pay now saves $2.50 over the course of the payoff

Definitely don't get stuck in a cycle of just paying the minimum on your credit card since you'll never make any progress.

As an example, let's say you owe $5000 on a credit card and it has an interest of 12%.

If you make $50 payments each month you will maintain that $5,000 debt forever and the credit card companies will be extremely in love with you.

If you make $60 payments each month you will carry a debt for just over 15 years and pay out a total of $10,860 to pay off that $5,000. This is about what the credit cards will let you get away with.

If you make $75 payments each month you will carry a debt for just over 9 years and pay out a total of $8,325.

If you can make $125 (twice what the credit card companies will let you get away with) it is paid off in 4 years, 3 months - almost 1/4th the time - at a total cost of $6,500 - 40% less cost.

Of course, the key is that while you're paying off consumer debt that you not be adding new consumer debt. Don't make late payments that will allow the cards to jack up the interest rate to incredible levels and if you have high interest cards try to transfer your balance to new cards with more reasonable rates and then close the old card. If you have multiple cards, pay the minimum on all of the other cards and put the rest that you can into the highest rate card until it is paid off.

Don't fall into the trap I did in college which is pretend the debt simply doesn't exist and that if I ignored them long enough the debts would simply go away (they do, but it is a really long time).

Don't think of your car as investment debt (like a house or an education) but rather as consumer debt. That is, debt that in the end leaves you with no asset of great value. When you pay off your $300,000 house you have $300,000 in equity. When you pay off your $25,000 car you probably have at best about $3-5,000 in equity, against which you can't easily borrow. If you're finding the car payment and the apartment rent to be onerous then put your energy most into changing them because they are most in your control (don't waste time worrying about credit card debt; it can't be changed and all you can do is keep paying it). Sell the car and get a cheaper one that is good enough for your needs (though odds are you car has been depreciating faster than you're paying it off but it might still be a good move).

Gemini Cricket · 08-27-2007, 02:16 PM

I found a couple of Excel spreadsheets online that I think I'll use.

I try to pay twice the minimum on my credit cards.

I have to get into not using the credit cards anymore. For about the last month or so, I have been pretty good at not using my credit cards and just using cash or my debit card. It is tempting though when you see the all that available credit there...

As for my car, it's a used car and the loan is for that. It's almost half paid off. I'd love to see the loan get paid off soon.

Gemini Cricket · 08-27-2007, 07:49 PM

To start myself down the road of thriftiness, I decided to make a big dinner. I ate half and will pack the rest for lunch tomorrow.

Stir fry chicken and rice. Yep. Lots and lots of rice.

MouseWife · 08-27-2007, 08:32 PM

LOL Lots and lots of rice!! Heck, I buy giant bags of rice {not quite as large as yours, I think}, giant packages of spaghetti, the giant bottle of sauce, bread in two packs...

We aren't supporting everyone in the house but we try and buy things that we can all eat in giant sizes. {what do they call that???}

Hey, your lunch will be delicious!! Just remember to grab extra soy sauce packets when you get the chance....easier to pack in your lunch.

08-27-2007, 01:29 PM	#32
Morrigoon I throw stones at houses Join Date: Jan 2005 Location: Location: Location Posts: 9,534	GC: Start by figuring out how much you'd like to save, and put that in your budget first. Then figure out the expenses you HAVE to spend on. Then use the remaining amount for things you WANT to spend on. If you put savings last, it'll never fit. __________________ http://bash.org/?top "It is useless for sheep to pass a resolution in favor of vegetarianism while wolves remain of a different opinion." -- William Randolph Inge
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08-27-2007, 01:33 PM	#33
Kevy Baby Chowder Head Join Date: Jan 2005 Location: Yes Posts: 18,500	I say write checks for everything. That way, when you run out of checks, you'll know you don't have any money left. __________________ The thing about quotes on the internet is that you cannot verify their validity. - Abraham Lincoln
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08-27-2007, 01:56 PM	#36
Gemini Cricket ... Join Date: Jan 2005 Posts: 13,244	KB ~ My debt's not that big. It's a great service. I did talk Ralphie into doing it. It's a huge help for him. I have some shopping to do tonight for home lunch stuff.
	Submit to Quotes

08-27-2007, 02:04 PM	#37
Alex . Join Date: Feb 2005 Posts: 13,354	If that is an issue for you, I'd suggest spending a bit of time doing a spreadsheet. Take your current debts and lay them out showing how the balance changes depending on how much you pay to them each month (don't forget to include the interest). And include how much you spend total on the debt. At your point in life I wouldn't really focus on saving (except for some truly emergency fund) but on eliminating the big debt. It can be quite an incentive to see that if you put an extra $50 into the credit card payment each month that it pays off six months sooner (for example) and that every extra $1 you pay now saves $2.50 over the course of the payoff Definitely don't get stuck in a cycle of just paying the minimum on your credit card since you'll never make any progress. As an example, let's say you owe $5000 on a credit card and it has an interest of 12%. If you make $50 payments each month you will maintain that $5,000 debt forever and the credit card companies will be extremely in love with you. If you make $60 payments each month you will carry a debt for just over 15 years and pay out a total of $10,860 to pay off that $5,000. This is about what the credit cards will let you get away with. If you make $75 payments each month you will carry a debt for just over 9 years and pay out a total of $8,325. If you can make $125 (twice what the credit card companies will let you get away with) it is paid off in 4 years, 3 months - almost 1/4th the time - at a total cost of $6,500 - 40% less cost. Of course, the key is that while you're paying off consumer debt that you not be adding new consumer debt. Don't make late payments that will allow the cards to jack up the interest rate to incredible levels and if you have high interest cards try to transfer your balance to new cards with more reasonable rates and then close the old card. If you have multiple cards, pay the minimum on all of the other cards and put the rest that you can into the highest rate card until it is paid off. Don't fall into the trap I did in college which is pretend the debt simply doesn't exist and that if I ignored them long enough the debts would simply go away (they do, but it is a really long time). Don't think of your car as investment debt (like a house or an education) but rather as consumer debt. That is, debt that in the end leaves you with no asset of great value. When you pay off your $300,000 house you have $300,000 in equity. When you pay off your $25,000 car you probably have at best about $3-5,000 in equity, against which you can't easily borrow. If you're finding the car payment and the apartment rent to be onerous then put your energy most into changing them because they are most in your control (don't waste time worrying about credit card debt; it can't be changed and all you can do is keep paying it). Sell the car and get a cheaper one that is good enough for your needs (though odds are you car has been depreciating faster than you're paying it off but it might still be a good move).
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08-27-2007, 02:16 PM	#38
Gemini Cricket ... Join Date: Jan 2005 Posts: 13,244	I found a couple of Excel spreadsheets online that I think I'll use. I try to pay twice the minimum on my credit cards. I have to get into not using the credit cards anymore. For about the last month or so, I have been pretty good at not using my credit cards and just using cash or my debit card. It is tempting though when you see the all that available credit there... As for my car, it's a used car and the loan is for that. It's almost half paid off. I'd love to see the loan get paid off soon.
	Submit to Quotes

08-27-2007, 07:49 PM	#39
Gemini Cricket ... Join Date: Jan 2005 Posts: 13,244	To start myself down the road of thriftiness, I decided to make a big dinner. I ate half and will pack the rest for lunch tomorrow. Stir fry chicken and rice. Yep. Lots and lots of rice.
	Submit to Quotes

08-27-2007, 08:32 PM	#40
MouseWife Senior Member Join Date: Jan 2005 Location: Da' Beach Posts: 2,957	LOL Lots and lots of rice!! Heck, I buy giant bags of rice {not quite as large as yours, I think}, giant packages of spaghetti, the giant bottle of sauce, bread in two packs... We aren't supporting everyone in the house but we try and buy things that we can all eat in giant sizes. {what do they call that???} Hey, your lunch will be delicious!! Just remember to grab extra soy sauce packets when you get the chance....easier to pack in your lunch. __________________ Summa' time....when the livins' easy.........
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