HELP! Can you see something that I can't?

[mommyoffive]

My husband and I started really taking control of our money in July and started using a budget on paper for the first time in our lives. I am now especially thankful that we started this when we did because we are now encountering some real challenges, and at least I can see where the money is going.

Our kids are in private school, which is really important to us, and our mortgage is big. We left a $1350/month mortgage for a $2300 mortgage when we were expecting our fifth child almost two years ago. Our baby was diagnosed recently with two neurological disorders that can be corrected with surgery. In the meantime, he has had two MRI's, and EEG, physical therapy and two consultations with his neurosurgeon. As you can imagine the medical bills have been filling our mailbox despite our $600+ per month health insurance, which is taken out of my husband's paycheck each month.

Our son will be having his surgery in two weeks, which will help because he met his deductible and is well on his way to meeting the out-of-pocket maximum for the year.

I sit with our budget to see where we can cut, but as a family of seven, it is hard. We do have cable, which is really my husband's and my sole entertainment these days, so I really don't want to get rid of it. I have cut back this Christmas, spending $100 or less on each child, and my husband and I are exchanging a few very small gifts.

Here is what I have budgeted for this month, and I just had to pull money out of savings to get us through the end of the month because we started the month with almost nothing in our checking.

Income: $6000

Charitable gifts: $130
Mortgage: 2300
HOA fees: 42
Utilities 637
Groceries 800 (includes HBA, paper products, diapers)
Gas 250
Car repairs 70
Car insurance 80
Clothing 150
Doctor bills 326
Medications 30
Life insurance 50
Babysitter 80
Haircuts 40
School tuition 986
Gifts 400 (to pay what is was put on the credit card last month)
Christmas tree 55

We did not allocate ourselves any entertainment or blow money.

Total outgoing without unexpected expenses is 6426. (gulp)

We do have a decent savings account, but I avoid dipping into it like the plague, and moving $1000 out of it today really hurt.

Any ideas on how I can ride this out without feeling like a total failure at our frugal endeavors?

[angelic007]

sorry to hear about your situation! from what i can see and this is just my personal opinion...maybe trying to spend less on clothes every month maybe mending what you can and going to secondhand stores if you already don't...trimming hair for the kiddos is relatively simple and can help save some money there...also if the charitable gifts can get cut away that would help...no use in buying things for others if you don't have everything for yourself...once you get ahead on bills and budget you can put the charitable stuff back in...

[PurpleSnowflake]

What is your goal? What are you working towards? Debt free? Saving XXX amount each year? When you make your money work for you... you need a GOAL.

And HOW serious are you about it? Most people are not very serious and will make up all kinds of excuses/reasons not to cut things.





I am going to go in and add my suggestions in red.

My husband and I started really taking control of our money in July and started using a budget on paper for the first time in our lives. I am now especially thankful that we started this when we did because we are now encountering some real challenges, and at least I can see where the money is going.

Are you using a Dave Ramsey system? If not you may want to read his "Financial Peace" and/or "Total Money Makever" books.




Our kids are in private school, which is really important to us

How important? Being in debt and in the red important? Can you switch schools? Homeschool maybe?


, and our mortgage is big. We left a $1350/month mortgage for a $2300 mortgage when we were expecting our fifth child almost two years ago.

Can you refinance? Can you get a different house? Can you move to a lower cost of living area? HOW important is your goal and making your bills?



Our baby was diagnosed recently with two neurological disorders that can be corrected with surgery. In the meantime, he has had two MRI's, and EEG, physical therapy and two consultations with his neurosurgeon. As you can imagine the medical bills have been filling our mailbox despite our $600+ per month health insurance, which is taken out of my husband's paycheck each month.


Our son will be having his surgery in two weeks, which will help because he met his deductible and is well on his way to meeting the out-of-pocket maximum for the year.


I have special needs kids too.

Do you fully understand how your insurance works? Deductibles, co-insurance, etc?

Have you gone over the bills with a fine tooth comb for errors? Asked the hospital/doctors for payment plans? You can pay much less to them usually than any other debt on a monthly basis. Most hospitals wont send to collections if you are paying something. You can even ask for discounts.




I sit with our budget to see where we can cut, but as a family of seven, it is hard. We do have cable, which is really my husband's and my sole entertainment these days, so I really don't want to get rid of it. I have cut back this Christmas, spending $100 or less on each child, and my husband and I are exchanging a few very small gifts.


Well I think you will already know the answer to the "cable" question. If you are in the red each month you can't afford the "luxury". At the very least drop it to the lowest package and get rid of the DVR if you have it too.

You and hubby should cancel gifts to each other and find ways to express love that do not involve $$$ gifts.



Here is what I have budgeted for this month, and I just had to pull money out of savings to get us through the end of the month because we started the month with almost nothing in our checking.

Income: $6000 (One or two people working? Can anyone get a 2nd or PT job?)


Charitable gifts: $130 Cut down or hold off for now.

Mortgage: 2300 Find a different home with smaller mortgage

HOA fees: 42 Find home without an HOA or covenents

Utilities 637 HOLY $%@! What all is included in this?

Groceries 800 (includes HBA, paper products, diapers) Cut down this amount, learn more ways to stretch those dollars

Gas 250 For how many people? Gas has gone down ALOT recently... what takes so much gas?

Car repairs 70

Car insurance 80 Have you shopped around?

Clothing 150 That is way too high too. $1800 per year. Buy sales and thrift stores. Use what you have. Repair clothes. No shopping for trendy or fun.

Doctor bills 326 See above.

Medications 30

Life insurance 50 Have you shopped around?

Babysitter 80 What is this for? If it is a luxury, then drop it for now. Is it more important than the debt? Find other ways to have fun. Babysitting co-op?

Haircuts 40 For whom? Can you cut the hair at home? It's not hard. That's $480 a year on hair cuts. $30 hair cutting kit works on boys, and longer hair is easy to cut on girls. A beauty school would also be cheaper.

School tuition 986 See above.

Gifts 400 (to pay what is was put on the credit card last month) Well if this is ONLY a one time occurance, dont put it on your normal budget. Set a MUCH smaller number for the "normal" budget.

Christmas tree 55 Again, this is a one time thing. You may need to have this come from a "holiday" or "entertainment" category... that way you can save for it for 12 months.


We did not allocate ourselves any entertainment or blow money. That's great if you are in the red each month. Unless ofcourse any of you "blow" money when you feel deprived?


Total outgoing without unexpected expenses is 6426. (gulp)


We do have a decent savings account, but I avoid dipping into it like the plague, and moving $1000 out of it today really hurt.


You actually have the money each month NOT to be in the red and save... BUT you have made choices that put you in the hole and you don't want to give those choices up.

So this is not a "I need to make more money", but more of a "I need to pull back my wants and spend less and downsize" issue.

Any ideas on how I can ride this out without feeling like a total failure at our frugal endeavors? Time to get really serious.

This is a good place to learn!








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[PurpleSnowflake]

You didn't put credit card debts, other debts, student loans, work related expenses, misc, pets, school expenses, birthdays, etc... in there either.

[Dancing Lotus]

Well I know it's easier said then done but charitable gifts, clothing, haircuts, babysitter are things that can be cut today. I would also cut the amount spent on each child for Christmas in half, or did your already spend that? I'm not clear on the 400 for gifts thing.

I'm lucky , my girls and I all have long hair so hair cuts are very rare. My husband learned to cut his own a long time ago.
Clothing , with that many to cloth your budget is reasonable but I think you will have to put a freeze on it for a little while.
About the cable. I held on to it for two yrs before I had the guts to cut it of. I really didn't want to but it had to be done. It's been two months now and I don't miss it. You would be surprised how much you can watch online.

What is driving up your utilities? My family of four has about 225 in utilities and we are not conservative. Maybe you could scale those back by putting time limits on Showers, running a fuller load of wash, turn the heat down 2 degrees.

Think about calling around and finding a cheaper rate on your car insurance.Or maybe you could up your deductible to save a little on the monthly premium.

Im sure I will think of more but for now Hang in there. It can seam a little overwhelming but just take baby steps and overtime it's second nature.

[leezza]

First off: sorry about your little one……hope all goes well, blessing to you and your family.


Just a few things that I thought I would run by you:

Income: $6000

Charitable gifts: $130, (cut this out until you are caught up)
Mortgage: 2300
HOA fees: 42
Utilities 637, (this seems really high to me, even with 7 people, see if you can
Use some of the idea’s on this board to assist you in lowering it).
Groceries 800, (I am impressed this is really GREAT!)
Gas 250
Car repairs 70, (do you have repairs every month or is this a fund for just in case?) (if it is a fund cut it out until you are caught up).
Car insurance 80
Clothing 150, (cut this out until you are caught up, try freecycle, and let your friends, family, and others know that you would be interested in their outgrown things).
Doctor bills 326
Medications 30
Life insurance 50
Babysitter 80, (I didn’t see in your post if you worked or not if not why do you need a baby sitter?)
Haircuts 40, (do this yourself or barter for it…..unless this is your hubbies haircut and if so you may need to keep it for him to look sharp at work?)
School tuition 986, (would you consider asking your school if you can be considered for any scholarships?)
Gifts 400 (to pay what is was put on the credit card last month), (make 4 payments of $100 so that you can have some wiggle room).
Christmas tree 55, (you should be able to get a less expensive tree…..look around even here in my HCOLA you can find them for $20-$25).

Kind Regards,
leezza

[IntlMom]

PurpleSnowflake - I just wanted to say a great big "WAY TO GO" for being so helpful and complete with your answer.......great thoughts, you were firm when you needed to be, and gentle when it was necessary - GOOD JOB!!!!!

[mommyoffive]

I may have given the wrong impression- we are debt-free except for the house. Since July, I have actually added about $1500 to savings. What I do is I budget a little more for each area that fluctuates (like food and gas) and then aim to spend less than I budgeted. We are normally not in the red, but this month with Christmas and our medical bills, I had to dip into our savings (which was a little over $10,000. Even though we have that money, I do panic though because it is what we call our emergency fund (yes, we are working the Dave Ramsey plan). We had to put tires on our Suburban in September, which I think started this trend toward having less and less extra money leftover at the end of the month.

snowflake- I know what you're talking about when you talk about people who whine and then make excuses about why they can't change. Our choices were carefully made, and yes, we do have some indulgences. However, we never eat out, I cook everything from scratch, we have one cell phone between us and it's a pay as you go phone, we use mostly hand-me-downs, and I am wearing clothes that are literally disintegrating. LOL The babysitting money is for my husband's work party for Christmas and so we can go to a basketball game we were given tickets to. Having five kids makes the hourly babysitting fee a little higher.

You asked about pets- yes, we have a dog, but I didn't budget for her this month because I have enough saved for her food that I'm going to have to buy soon in my cash envelopes. And birthdays- my two girls have birthdays in the next four weeks, so that was money included in the Christmas number. Thankfully we don't have another family birthday until the spring.

You've given me some good food for thought. I will have to talk with our health care providers about a payment plan. The surgery is planned for 12/22- not optimal for Christmas, but we did it that way because I believe it will be 100% covered, given that we've already racked up so much this year. One of our charitable donation is sponsoring a child in another country, but I think we'll put our church tithe on hold until we finish up paying our medical bills.

[peanut]

Hi mommyoffive! Looks like you got a quick introduction to how frugal we can be here! Sorry to hear about your little guy. Basically I agree with the OPs. I guess I would just like to stress comparisons and alternatives with you.

My husband and I started really taking control of our money in July and started using a budget on paper for the first time in our lives.

Sometimes it can seem a bit daunting. Keep on plugging away at it! Persistence wins the race. I don't know what program you are using, if any. You might want to check out YNAB (You Need A Budget).

Our kids are in private school, which is really important to us, and our mortgage is big.

In the short term (ie. this month) you can't really do anything responsible about the mortgage. Though in the future, when you've learned more frugal ways, I'd suggest paying the sucker down as fast as possible...assuming you have no other debts.

As for the private school...depending where you live, I second the suggestion you look at homeschooling...especially with five children. You can set your time up quite efficiently without all the running around and expense of school. But, I also recognize this is a big time commitment for a parent. If it's just not for your personality, you just need to let it go. But there again, it ain't gonna help you this month.

Some private schools do have plans whereby the second, third and fourth, etc., kid goes for half price or free. Does yours have such a plan?

Our son will be having his surgery in two weeks, which will help because he met his deductible and is well on his way to meeting the out-of-pocket maximum for the year.

I will add your son to my prayer list...and you and your DH too.

We do have cable, which is really my husband's and my sole entertainment these days, so I really don't want to get rid of it.

I would cut it and use the library instead. We had cable one year and decided it wasn't worth it. The kids just watched crap whenever our backs were turned. We found good material available on DVD and video at the library.

There are a lot of ways to enjoy each other's company frugally. We call them frugal luxuries. Check past threads and see if you can find the ones on frugal date nights and frugal luxuries.

I have cut back this Christmas, spending $100 or less on each child, and my husband and I are exchanging a few very small gifts.

I smiled at this. $100 has always been our limit for gifts in the family. This year is shaping up to be the exception. My girls are 21 and 24. One is knee deep in student loans. The other is needing a winter jacket that will probably run $100+...she needs it to be warm, waterproof and windproof ("good enough to withstand a hurricane Mom!").

What about homemade gifts? Special candy? Hm chocolates?

Income: $6000 Sigh...nice...

Charitable gifts: $130 Unlike the others, I'd say keep this. I just plain makes you feel better about yourself.
Mortgage: 2300
HOA fees: 42
Utilities 637 This is really high from my perspective too. We average $110cdn./mth. with 5 adults in the house.
Groceries 800 (includes HBA, paper products, diapers) This is also high. We average (on a bad month) $100cdn/person, feeding all adults.
Gas 250 Someone must be using the car for work purposes. Anyway to get this covered by the employer? Or are you running 2 cars? Our gas is normally $80cdn/mth. DH bikes to work during spring, summer and fall.
Car repairs 70
Car insurance 80
Clothing 150 I'd be checking thrift stores. But with seven kids I could see this being shoes alone! Have you read Amy D's "The Complete Tightwad Gazette"? She has a really slick way of organizing clothing needs for several children. I'd suggest borrowing the book from the library for future reference. Not much help right now, I know. But it's something to work on.
Doctor bills 326
Medications 30
Life insurance 50
Babysitter 80 I'm assuming this is for Christmas shopping? Try splitting up the kids with each parent or a friend/grandparent to give you a break to go shopping on your own. If this is just for time alone. I suggest, depending on the kids ages, that you have a set bedtime...put them down...give it an hour, and then take part in a quiet date night at home this month.
Haircuts 40 This is really cheap for 7 people. I'm assuming you already cut hair. I wonder if you have a hairdresser/barber who would give a family discount? Are you near a beauty school where you could get cuts from students who are learning to cut hair?
School tuition 986 See comments above
Gifts 400 (to pay what is was put on the credit card last month) Ouch! You're doing what I used to do. Don't put it on CC unless the money is the bank account to pay it off, and you get some kind of return - cash or air miles - on the card. Make every buck pay you twice.
Christmas tree 55 We found a really nice artificial one for free on-line through our local Full Circles site. Check it out and see if you have one in your area. It's nice to save that money every year.

We did not allocate ourselves any entertainment or blow money.This is wise for this month, considering how tightly you're pinched right now.

Total outgoing without unexpected expenses is 6426. (gulp)
Okay. You can easily save $426 this month, if you want to put the effort in. Start by creating a menu plan using food already in the house...frugal menus only!

We do have a decent savings account, but I avoid dipping into it like the plague, and moving $1000 out of it today really hurt. Hopefully you'll be able to avoid this in the future.

Any ideas on how I can ride this out without feeling like a total failure at our frugal endeavors?

Hope that gives you some ideas...

Jean

[my4littlebuffaloes]

Sorry about your son, I hope the surgery goes well. As for places to cut, your utilities seem very high to me. Can you turn your heat down, cut excess from your phone bill, and possibly cut cable down any? At the very least call them and try to negotiate a lower rate. Can't hurt to try. You should be able to afford private school based on your income and no debt other than mortgage. $150 a month on clothing could be cut during the months that are tight. Food could be lowered for sure, but if diapers and meds are included, then maybe not much. You definitely have places you can cut, but maybe you don't want to permanently. That is fine, you could cut certain areas in the budget during the tight months like Christmas time and then fund them fully during the other months. good luck!

[madhen]

I had the same thought with the utilities. There is something sucking power out of your house that you can stifle a bit. And $150 EVERY month for clothing seems pretty high. My parents bought me clothes twice a year (and my mother was very big on us looking presentable).

I have seen a lot of Christmas trees for sale for $20 around here. You don't have to have a huge tree to have a wonderful Christmas atmosphere.

Charity begins at home. Pay yourself first. Or spend $100/month on your favourite charity, and stick the other $30 in an emergency fund, with the promise to yourself that you will donate it down the road should that emergency never arise.

[mommyoffive]

Oh my, I seem to have given everyone a heart attack with my utility bills. They are high every other month because we pay water and garbage every other month, and they happen to be the same month. Last month our utilities were $397- much better. We also are doing equal pay on gas and electric, so I am paying more for electric, but it will even out in the summertime when we are running our AC. Our thermostat is set at 67 degrees, we only run full dishwasher and laundry loads, but our boys have a terrible habit of taking long showers. Where I know we could cut down is our Verizon bill (150 for phone, internet and cable).

Unfortunately the clothing money is already spent-- two kids needed shoes (one had holes with water getting in and the other had squished toes), one son needed a winter coat because he lost his at the end of last winter (grrr) but I got one for $24, and my husband's jeans were blowing out in the back. TMI? My original thought was to have a clothing budget of -0- this month.

Gas- yes, we run two vehicles. Mine is used to run kids to school, to sports practice and to grocery shop, but my husband has a 40 minute commute, and he drives in heavy traffic on the way home. When gas was over $4.00 a gallon, I stayed home- went over a month on 3/4 of a tank of gas.

Haircuts- I cut the girls' hair, but I, my husband and boys go get our hair cut. I tried cutting my husband's hair a long time ago. Let's say, it didn't go well. The boys (incl. husband) just go to Great Clips, and I get my hair cut about ever 6 to 7 weeks for $30 including tip. Then about three times a year I get highlights to cover my gray.

As far as my CC charges go, I do use it for the rewards. We pay our balance off monthly- I just mainly use it out of convenience, and I get a percentage back on my purchases. However, with the holidays I've gotten in a bad habit of using it and having the money budgeted for the next month spent before the month even begins. If I could do it all over again, I would have cut back even more for the kids for Christmas. I'm a sucker when it comes to buying the stocking stuffers. I jsut have way too much fun looking for little treats. Just because something's small doesn't mean it's always inexpensive unfortunately.

I do have a lot of meat in the freezer and a well-stocked pantry, and I think for the rest of the month, I'm going to use up my freezer and pantry as much as I possibly can. Could someone please come over and tell my kids to not drink so much milk though? We go through almost a gallon a day!

You guys have given me lots of ideas so far. I'm going to keep my fingers crossed for a Christmas bonus this year (which we usually get but I never count on it), and I'm going to rethink some things for the new year.

Thank you for the well wishes for our baby. I am confident that he is going to do great, but it is stressful nonetheless.

[Ilovesewing]

Honestly, it sounds like your budget is under control! My first two thoughts when I read it, and before I got to your last post, was the utilities, food and clothing. You've explained all those.

It sounds like you're having a tight month - something we all have time to time. I'd still look at the food budget, but I've never had to feed five children so maybe you're doing the best you can. Where do you shop and how often? I've saved money by doing my bulk shopping at Sam's club, and filling in once or twice a month at the grocery store on milk, produce and such. I haven't been to Sam's for well over a month and I've made way to many trips to the grocery store. My checkbook definitely feels the difference!

Good luck to your baby!

[mommyoffive]

ilovesewing- I do my grocery shopping at Costco (equivalent of Sam's Club) once a week, with a monthly trip to Winco for stuff I want to get in smaller quantities. I stopped at our local grocery store yesterday for apples, and I was thinking about buying some ingredients for a jello salad I have to bring to a Christmas party. A box of jello was almost $2.00- I couldn't do it. (I am wierd- I won't spend $2.00 on a box of jello, but I really love my cable.) I have a seasonal menu with four rotating weeks, which really helps me use up those bulk items. I like variety, so the menus get a little old to me, but it helped me to always have a meal plan, and a lot of my meals build on each other (ie. using leftover meat for another recipe later in the week). My shopping for baking supplies for homemade gifts (jar mixes, cookies and candies) has impacted my December food budget, but I think if I get creative, I can make it up elsewhere.

[LastDragonfly]

Mommyoffive, You do have a handle on things, but I know you want that "tighter grip" on that handle.

Do you average your utilities? I know our electric company will let you average your bill based upon the last years usage. Your bill will be the same each month (or very close)

Carpool for dh? brown bag lunch?
Revamp the menu. (use powdered milk with your regular milk to stretch it a little farther)

Can you take off caller id or voicemail off your phone? I know where I live, having vm/and/or caller id puts the phone bill up just enough for the phone company to charge more tax.

What about your internet provider? Can you get a cheaper one?
Drop the cable to basic you can always upgrade (sometimes with a deal)

Turn the water heater down. Do you use low flow toilets? Energy saving light bulbs, windows caulked tightly? Do you have everything unplugged when not in use? Can you line dry some of your clothes? Do you make your own laundry soap?

Ok, I'm out of ideas? You will find ways to cut back.