Need # Crunching Help For Friend

[Libby]

I've agreed to help a friend out by crunching his #'s but its super tight even when I pare down the things that can be - gas for car, food, laundry. I can't get it to a presentable level yet. Its super tight therefore he prob won't stick to it which defeats the purpose. He acknowledges that he's on a downward slide into financial hell and is willing to get a second job - just not sure when.

I'm going to post his expenditures here and allow y'all to pick at it. Hopefully it will help me get a better idea on how to present it back to him.

These are all monthly totals.
Pay is biweekly as in every 2nd Friday
He's a single guy, living on his own.
Paycheque amount $800.00 (this is his take home pay after all the taxes etc and child support have been deducted)

$660 - rent (due on the 1st)
$150 - cell/internet (due on the 11th)
$355 - car payment (due on the 18th)
$133 - car insurance (due on the 18th)
$200 - grocery
$225 - gas
$20 - laundry (uses machines)
$100 - work lottery pool

DEBT: $2500 - credit card debt - he throws about $100 at it monthly

I've already encouraged him to get that 2nd PT job he was thinking about, seek out free entertainment, drive only when necessary and to run errands on his way home from work so he's not making extra trips. We're currently working on switching cell/internet plans to lower ones. I suggested to stop participating in the monthly work lottery pool and I'm not really sure how he does his laundry. Make bigger loads & hang to dry? Once a week cooking so food during the week isn't a chore.

Ideally, I'd like to get him to the point to be able to start a slush fund & savings for the following categories:

EF
Car Maintenance & Repair
Allowance - entertainment/eating out/shopping

Your suggestions please?

[kita]

These are all monthly totals.
Pay is biweekly as in every 2nd Friday
He's a single guy, living on his own.
Paycheque amount $800.00 (this is his take home pay after all the taxes etc and child support have been deducted)

$660 - rent (due on the 1st) Roommate?
$150 - cell/internet (due on the 11th) yep, big problem...
$355 - car payment (due on the 18th)How much more does he owe? Can he sell for a cheaper one? When does the payment go away?
$133 - car insurance (due on the 18th)when he doesn't owe on the car, this can go down...in the meantime he can shop around
$200 - grocery From what I have heard this isn't too bad for a guy in Canada
$225 - gas can he carpool?
$20 - laundry (uses machines)depending on where the machines are he might be able to do the "hang dry"
$100 - work lottery poolThis is a HARD situation. When I worked in an office I tried to tell people I couldn'tafford to do this and so my officemates started to 'put in for me'. And I had to pay them back. Really really awful.

DEBT: $2500 - credit card debt - he throws about $100 at it monthly

Wow, I'm not sure how he finds the money to throw at the CC...

Good Luck...keep us posted

[Libby]

Thanks kita.

Honestly, I think he robs Peter to pay Paul this month...its already started, I can tell though he won't admit it. I've seen the #'s...its not possible to pay everyone on time.

To answer some of the questions, no roomate possible, he's already in a small almost tiny 1 br bsmt apt, he just got the car 'shiny thing' syndrome, his insurance is the lowest he can get it - only comprehensive and not sure about the carpool thing. His laundry is shared with the two other tenants of the house. The landlord put in coin-op machines. I'm not sure if he washes the darks sep from colours sep from diff colours etc but I think if he combined loads to max out he's saving one wash and if he hangs dry his clothes he's saving the dryer fee too. And he scoffed at my drying racks! He could put the racks in his lv rm in front of tv since he doesn't have cable anymore.

Oh and for groceries - I've seen him shopping at the fancy higher end grocery store, you know...the one thats open 24/7? Yeah...those just cost more by looking at them He needs to slum it like me and go to Chinatown and/or the disc grocery stores. (BTW: not mocking anyone who shops at disc grocery stores but the store he does shop at - we could all get 5x as much for his 1 trip! He needs to come down to reality. Yes I've told him this to his face.)

[3tomboys]

If he doesn't like the idea of having laundry drying at times during the day when people might stop by maybe he can wash a load at night and hang to dry when he's sleeping. Would he be able to lower the minutes on his cell phone to make it a little cheaper? It seems like the best thing to cut back on is the groceries. Maybe you can show nim how quickly he can pay off the cc with the second job. I'm sure he wouldn't want the second job for a long period of time, but maybe long enough to pay the cc and a BEF.

[AnW819]

$200 a month for 1 person to eat is a lot IMO...DH and I spend that a month normally and we feed us, and my dad and brother occasionally.

The lottery has got to stop...that $100 is a lot!!! I could see it being $20 a month, but $100? Thats pretty sad that he puts that in his budget And $150 for a cell and internet? Thats EXTREMLY high!!! We pay $50 a month for 2 cells, and $99 a month for phone, internet and cable.

Just my opinions Good luck!

[kita]

Shopping at grocery stores is an odd thing. When I came to Portland Iwas horrified that my brother was doing all of his shopping at Freddy's (spendy). To the tune of 300+ a month. I convinced him that _I_ needed to go to Winco's (we were sharing a car at the time). He was shocked that when we went Winco's his bill was about 40 dollars less...a week. He still complained that it was too far to walk in the store because he wants to go down every aisle but he is finally coming around. He splits his weekly trips between Freddies and Winco's so that he can get his meds from Freddies etc.

[Kitten20]

I think he should sell the car. He can't afford it... You mention that you would like him to be able to budget for entertainment, but I think he already does that with the office lotto.

There really isn't much wiggle room, other than what's been mentioned (groceries, gas, internet/cell, cut the lotto).

[Libby]

Thanks for all the input everyone - keep it comin'!

The lotto thing - yes $100/month is a lot. Too much. $1200/yr and no potential for any return - ooh $10. Was that really worth the $1200 he spent? I think he doesn't count the lottery money as 'allowance/entertainment' b/c hes not getting to do something with it ie take a girl out on a date etc. I'd rather him spend $20 on the date and then pay down a bill/debt with the other $80.

Re: hanging the clothes to dry while he's at work - totally agree. Even then HE wont have to see it and by the time he does, its prob all dry & ready to be put away. Don't forget...we're all frugal and more conscious about things like this...Mr Bachelor is not. (hehehe I think thats how I'll refer to him from now on)

Re: reducing cell/inet - I think I've found a cell pkg for him. I know he's on a super grandfathered plan with extras and if he gets rid of all the extras...is his plan really all that super? KWIM? I wonder if he'd be willing to switch to a new plan and get it over with. He'd have to be the one to figure out which internet plan is best for him. He does use the net and its A LOT.

My goal is to help him get on track. Not have him look at the budget suggestions and throw his arms up in the air screaming 'Thats impossible!' I guess I'm looking for a good jumping off point that won't scare him off of becoming frugal altogether. I really do appreciate all the input.

I also think that once he gets his financial house in order....the rest of life will come to him (Mrs Right perhaps?) easy and it will all be gravy. I just don't want to see my friends suffer more then they have to.

[kita]

okay, let's try this...

The key is "magic month". That is the month with three checks. Using that extra check (which happens every six months) to pay on the insurance (which is usually cheaper if you pay every six months...by about 10 bucks.) then monthly input for insurance goes down to $32. So his usual month would look like this...

Laundry $8
Insurance sinking $32
Car $355
Groc. $75
Gas $110

Total 580 spent out of 800. SAVE $220 for the next group of bills:

2nd paycheck:
Laundry $8
Cell, internet $150
groc $75
Gas $110
Total $1003 spent out of $220 saved and $800 paycheck

Which leaves him with $17 a month for clothing, gifts, surprise expenses and those credit cards.

Magic month extra paycheck is $800 and would look like this:

Laundry: $8
Groc $75
Gas $110
Insurance: $607


I reduced his grocery money by 25% based on what you are saying. I also cut his gas by $5 a month mostly because I am too lazy to divy up $5 between two checks. Also cut his laundry by $4 a month.
If he can manage to reduce his gas to $100 a payperiod that would make a difference. Also if he can change that cell/internet to $100 it would mean an extra $70 a month. That makes it look a little more possible.
I agree, he is going to have to get a part-time job. Tell him he needs to work it until he has made $4500. $2500 for those CC, $1200 for EF and an $800 fund for his six month insurance payment.

[druthb00]

Anyone who spends 100 a month in an office lotto should be slapped upside their heads. I'm sorry, that is just stupid....He's got CC debt and he's tying up paying that off sooner to get a measly $10/yr return on it. I don't know what to say about people possibly putting money in it for him....but if you tell your coworkers you can't afford it, why on earth would they assume that you could pay them back? I've never been in a situation where there was a company lotto, so maybe I'm missing something...but it seems so frivolous to me.

Edit: Sorry Libby, I know this didn't help you any lol, but sometimes I can't keep my mouth shut. It's really nice that you're willing to try to help him as much as you are. I'd have a really hard time doing it. (Translation; you're a better friend than me I guess lol)

[Jenna]

I use a prepaid cell that can cost about $100-$200 a year. Our internet is around $65 a month.

I don't know what the work lottery pool is, but I'd find better use for that $100 a month.

[mslolsalot]

I'm with everyone on the lottery thing-it has to go! I also second the notion of selling the car. If he can go car-free for 3 months, he can get some wiggle room, 6 months he could pay his credit card debt off. I did it, it's not so bad. The fact is that HE CAN'T AFFORD THE CAR. He needs to get one he can afford (pay cash) or have no car.
Cell and internet should be easy to address. Ok, the data plan might have to go, but really, is it that vital? Some carriers have data plans that work as internet for computers as well. It works like dial up, I guess. I've not tried it, but I have a client who was mentioning it the other day. Then there will be no internet bill, just cell phone.
$200 for food is a lot IMO. I pay that much for myself and 2 kids. $25/week is possible if you can cook a little. If necessary, go to Walmart or Superstore for cheaper groceries! Another thought is a Good Food Box program or something like that. I'm in SK where you can get a big bin of produce for $7.50 per week. If your community has something similar, it's well worth it.
IMO $20 for laundry isn't a big deal. Almost not worth sweating for the pittance it will save tohang clothes to dry.
As for rommmate, if the place he's in is too small for 2, can he move? A different place with rent a couple hundred more per month for 2 bedrooms would still save money if shared.
What happens to small bonuses like GST every 3 months, etc. Based on his income level (unless he's paying a boatload in child support) he should be getting GST rebates.
I think what you're doing is great, but in the end he's going to have to decide if he can bite the proverbial bullet or if he wants to keep going down his current path. He doesn't have to change everything, but he has to change some things, and it's going to have to be big. If he did make all of the changes suggested in this thread he could bank one paycheque per month (after the cc debt is gone).
Good luck to you both. I hope you can find a workable plan.

[kita]

I'm the one who had co-workers who would put in the lottery for me. The reason it is such a difficult thing is that it is part of "being one of the guys". And that goodwill and comraderie is part of job performance ..even if an unspoken one. It just has to be dealt with delicately. Honestly, I finally had to hint that my minister would take disciplinary action if he found out that I was participating in gambling. But my office was maybe a bit more hardcore than Mr. Bachelor's. I hope so.
The Good Food Box sounds like a good idea as well. If he has fruits and veges at home then eating out doesn't seem as likely. Also if he can't cook let him know that there are easy things to fix. He can also learn to cook a easy items slowly.
Breakfast of cooked cereal with milk, an egg with a cup of coffee can cost about 50 cents down here. Mix up the menu with different kinds of cooked cereal, some fruit and then one day have homemade waffles and two days splurge on cheap cold cereal...cornflakes, cheerios, shredded wheat...all generics of course.
If he can boil water he can make spaghetti with an inexpensive bottled sauce. Add cheese for protein. Canned vege or salad. Garlic toast. Tunafish cass. is easy. Three bean salad is good as an entree'. Boxed mac and cheese with added cheese or tuna. Add a fresh or canned vege. Canned chilli. Burritos with flour tortillas, canned refried beans and cheese. (and yes I am a near-vegetarian). and he can go hog wild one night and get a couple of chicken quarters, pour some cream of something soup on them and bake it. So there you are seven meals which would cost you less than a 1.50 (in the states). And that is dinner. Breakfast was 50 cents. For a buck he should be able to do two sandwiches, one PB&J and one a little different for variety. (Tuna, chicken, cheap cold cuts, etc) Carrots or crackers on sale. Fruit? A fifteen cent generic soda to keep you from raiding the vending machine is a good investment. (Okay that is for me)
There you are menus which are cheap and require no more cooking skills than opening cans, boiling, spreading, and nuking. Okay a little draining of the pasta. And cutting of fresh veges if availible.

[Greebo]

His take home * 26 / 12 = his monthly average.

He's overextended.

He has a car payment he can't afford. It represents FORTY SIX PERCENT OF HIS MONTHLY AVERAGE INCOME. Get rid of the car.

He needs more income.

[beks37]

Libby you are so nice to be helping Mr Bachelor out with this this. Everyone has given you very good suggestions, just hope he takes you up on some of them. I would definitely stop the lottery for $100/month. He can't afford that, plus the rate of return is not good at all. He has to get that 2nd job if he has any hopes of making any headway. He doesn't even have to work that much, maybe 10-15 hours a week at $8.00/hr = $80 a week, $320 a month before taxes and he's at breakeven with a modified budget.

Good luck!