Hello Frugal Villagers

[moasmom]

I found this (great!) site a couple of weeks ago and have been lurking and reading through *lots* of threads. Great information and I am glad to be here. I have seen how helpful members are with going through posted budgets and I hope to get some of that assistance myself. Oh, and I apologize in advance for this being so long, but I tried to break it up so it could be skimmed easily. And thanks (again, in advance) for reading!

Bottom line: we are currently spending more than we make, with my father-in-law making up the difference, and this needs to end ASAP. I was raised to never ask for or accept help, so the stress from borrowing money each month is really painful. It bothers my husband much less because he has a wholly different relationship with his parents than I do with mine, but, in any case, we need to get our financial house in order.

Short term goal: make ends meet.
Medium term goals: establish small EF, figure out a way to pay for school when DH transfers to state school from community college next year.
Long term goals: eliminate consumer debt and build emergency fund, savings, retirement.

Pertinent personal details: I am 36; husband is 39. We live in the SF Bay Area, bought a home in 2003, have no kids, and have 2 dogs and 2 cats.

We have a large amount of credit card debt ($27,126), all on one card. The minimum payment on that is certainly a large part of our monthly deficit. Not that it matters now, but in the interest of full disclosure, we accumulated it through a combination of poor decisions (buying wants, being in denial about how long unemployment would last, not budgeting, not having an EF which led to the credit card being used as an EF, trying and failing at a home business attempt) and unfortunate life circumstances (DH was laid off 3 years ago and couldn't find a job he was "qualified" for due to lack of a degree. Decided to go back to school, while working part time. He had end-stage renal disease and 1 year into unemployment, had to go on dialysis, which severely impacted his ability to work a part time job in addition to school. He got a kidney transplant 9 months ago and didn't miss any school, but wasn't able to keep up the pace of working; I was the kidney donor, which impacted my income for a short period.).

Monthly income (total - $3,518):
Me: $3,018
DH (this is an average, because it's commission-related): $500

Monthly spending (total - $4,290):
Mortgage: $2,470
Property Taxes: $275
Electric/Gas: $125
Cell Phones (2): $74 (DH needs his for work; mine is under contract and can’t be eliminated)
Car Insurance (2): $153
Car registrations (2): $31
AAA (towing/roadside assistance): $11
Dr. Co-pay: $15
Life Insurance (for both): $62
Homeowners Insurance: $78
Water: $88
Garbage: $19
Internet: $55 (DH needs this for work; we are shopping for a cheaper plan)
Netflix: $14
Gasoline $40
Tolls: $10
Prescriptions: $40
Groceries/Household: $125
Haircuts (for both): $35
Pet Care: $65
CCCS DMP $506

Deficit: $(773)

Things we have already done to reduce spending:
Utilities:
Dropped our land line.
Ongoing work to reduce electric, gas, and water usage through various strategies (thank goodness it was a very cool summer, so very few 100 degree days this year).
A/C is set to 80 degrees; heater will be set to 60.
Switched garbage service to smallest plan available.

Pets:
Switched to cheaper dog food (which turned out to be better for them and we were able to discontinue two ongoing medications/supplements).
I make the cat food, which is cheaper than decent quality prepared food.
Stopped giving the animals monthly flea treatments; avoid group "play dates" where they can p/u fleas.
Give the dogs each 1/2 a heartworm pill per month.
Take pets to cheap clinic (instead of vet) for any required vaccinations.

Grocery:
Never eat out; cook at home, from scratch.
Made a price book.
Shop sales and follow a list.
Shop less frequently.
Trying to eat less overall.

Household:
Use very few disposables (e.g. only t.p. and floss; no paper towels, napkins, etc.).
Cut back on OTC vitamin supplements.
Made a price book.
Concentrating on using less of all consumables.
Don't buy cleaning products; use vinegar, baking soda, etc.

Other:
Stopped using credit card late last year, but have to admit that if we had a crisis (auto- or home-related), we would need to use one again.
Starting a DMP this month with CCCS which will reduce our monthly debt payment to the $506 shown, and reduce interest rate to 1.9%.
Met with our insurance agent to review all insurance and reduced coverage/raised deductibles where feasible.
Got rid of our third vehicle.
Switched to cheaper Netflix plan (we don't have cable).
Stopped my 401(k) contributions.
Stopped all charitable giving.
I found a cheaper place for haircuts; am considering stopping haircuts altogether (only get one every 3 months).
Discontinued all magazine subscriptions.
Concerted effort to reduce driving and bridge crossings (all 7 bridges here are toll bridges).
Cancelled my Fastrak (auto bridge toll) account.
I've been checking out (and reading!) money books from the library (Mary Hunt didn't "speak" to me, but am looking forward to reading Dave Ramsey).
We don't exchange Christmas gifts with anyone, haven't for 4 years, but I do make lots of cookies to share (painful to think of not doing that this year).

Things we are planning to do in the near future:
This weekend we are going through our stuff to decide what can be sold and then place ads on craigslist.
Reapply for a mortgage refinance with our credit union (we did this last year and were denied due to inadequate income) using "Making Home Affordable" program forms.
We didn't put in a vegetable garden this year due to both of us recovering from surgery, but we will next spring.
We are shopping around for cheaper internet.

Other:
I have been toying with the idea of getting a second job off and on for months, but can't seem to make myself do it. I know it's just an excuse, but the thought of taking on an extra, regular commitment really stresses me out and I am afraid that the pressure, on top of my existing stress, will cause me to fall apart. I am well aware that lots of people have more than one job and manage, but...this is a weakness of mine. If I do it, I need to find something that's not mentally taxing since my "day" job already wears me out (it's a good job that I enjoy, but requires a lot of energy). I also need to go back to school and was planning on starting night school in January. But that, of course, can wait. I'm taking one class right now that I need for work, which lasts until mid-November, so I need to take that into consideration when adding commitments.

Whew, that was monstrously long, but I have tried to pay attention to the questions that I have seen get asked when people post this kind of stuff.

Thanks so much for reading. I am eagerly awaiting any and all assistance, advice, tips, suggestions, and ass-kickings.

Sincerely,
Kara

[mslolsalot]

Wow! Good for you for being so honest! I applaud you for all of the changes you've made and plan on making.

In truth, the bills you list are not outrageous- with the exception of your mortgage payment. How in the world do you manage when 70% of your monthly income goes to mortgage alone!? That HAS to be the place to start. I don't think cutting back on other smaller things is going to make up for the gigantic mortgage payment. You focus a lot on the credit card debt, but your payment on the CC is a fraction of your mortgage payment. I think any prudent advisor would encourage you to seriously consider whether it's worth it to carry so huge a mortgage.

Sorry, I'm sure that's NOT what you want to hear, but unless that payment goes down- like to half of what your'e paying- or your household income doubles immediately- I don't see how you can stay afloat let alone save for EF and retirement.

[3tomboys]

Welcome to FV! It sounds like you have honestly looked at your income and what's going out. You mentioned that you sold your third car, can you make do with 1 car? That would help with insurance and repairs. If you can get the refinancing on the house and lower your monthly payment that would be great. It looks like that is the expense that is really draining your income. My DH has had some great succes lately selling things on Craigs list, you should definately try it. Keep looking on this site for ideas, I am always finding something new to try to help cut expenses.

[TheresaRHPS]

Hi Kara! Congrats on the taking the first steps! I'll let the big number crunchers get to the meat of the issue, but there's a few things that I might be able to start the ball rolling with.

I realize that not every suggestion can work for everyone, but just some things to consider if you haven't already.

First things first....I would drop the Netflix account. I'm all for leisure activities; we all need to relax and have some entertainment in our lives, but that's a hunk of cash each month. Movies and TV shows can be watched for free online from places like Hulu, Google Video, and network websites. Movies and TV shows can also be checked out at your local library. And, instead of watching TV, maybe take that time to take a stroll around the neighborhood, work on a new hobby (one that could possibly result in a small extra income would be awesome), read more financial books (lol), play a board/card game, etc.

Prescriptions: Ask your doctor(s) if there are any generic alternatives that can work for you if you're taking any name-brand medications. Either generic or name brand, shop around different nearby pharmacies for the best price..like Walmart's $4 plans. Don't be afraid to tell your doctor that you're getting back on your feet financially, and ask if there are any free samples of your medication that he/she can provide in office. With most medications, your doctor can also prescribe a "double dose" for you to cut in half, lasting twice as long, and eliminating the need for a second co-pay at the pharmacy.

Hair cutting: That's actually a pretty good estimate for two people in my opinion, but you might be able to "shave" a little off that as well, hehe. If your DH has short hair, and you have the confidence, maybe invest in a set of clippers and give him trims at home. If your hair (or his) is longer and needs more maintenance, maybe discuss with your hairdresser a more relaxed style that needs less maintenance. You MIGHT be able to give yourself trims at home, or if there is a beauty school nearby, get basic work done for even cheaper than what you're currently paying.

Transportation: I assume you live in an area that has public transportation. Could you take a bus at any time to get to where you need to go? Is there anyone you work with that lives close enough to carpool with? Do you have a neighbor who is willing to carpool with you to do errands? Oh, and one thing someone told me a long time ago...fill up your car when its colder, like at night, lol. And watch your local gas stations...is there a certain day that prices tend to hike up? Here, its on Thursdays, so we always fill up on Wednesdays.

Extra Income: Even if a second job isn't feasible right now, there are still ways you can make a little extra cash. Do you have anyone who needs a pet-sitter or pet-walker for a few hours a week? How about babysitting, house-sitting, etc.? Do you have a skill, such as playing an instrument or an aptitude for math, that you can teach to someone else? Do you do any crafts, needlework, cooking, etc. that can be sold?

If you DO feel like you can handle a second job, plus your class, now is a great time to pick up part-time work. Most retail shops are hiring for the holidays, and most (at least in MY area) aren't offering too many hours. I started working at Borders, and got less than 12 hours a week. Since you DO have one job that you seem to enjoy, are there any overtime or extra hours available that you can pick up?

[frugalwarrior2]

I was wondering if a border might be a possibility? You didn't say anything about how many bedrooms you have.
I too would (and had to in the past)drop netflix.
Could you sell anything on ETSY?
And yes if you feel you could a second job (TEMP.) may be a way out.

Your budget looks very well thought out. I actually would not mess w/ the HW pills that way because less is like none. I know going the wrong way but>> HW treatments are hugely expensive and the dog is never the same.

Blessings either way.

[frugalfranny]

No serious advice............just welcome aboard.

One comment........the groc. budget seems a bit high for just two people............what else is in there? Can you cut that?

The large chains OFTEN have coupons for haircuts.......and when you find someone good you can request them. Every little bit will help.

[pollypurebred39]

I've gotten my hair cut at votech schools for just a few dollars. Check out your areas schools.

Perhaps couponing would help. Some here are super couponers, Frugal warrior is one of them, I'll bet if you PM'ed her she'd give you lots of REALLY helpful advice. She's a master at couponing. Some couponers are able to get just about everything for free.

Here's a thread on $3 crockpot meals

Looking For....

Thrift food stores could also be a huge help. Do a web search for your area.

There are tons of threads on here for reducing your electric/gas bills. Some electric companies have special times you can use electric that reduces your bill. Window quilts in the cold weather is a great way to reduce heating cost.

Making Using Installing Homemade Window Quilts by Sue Robishaw

This is a fabulous blog by nuisance26. Scroll down you'll see window quilts. She is amazing and has the best money saving ideas.

Made from Sheets Lately Reconstructed

Christmas is tough for sure. I started some Christmas threads on token gifts and free Christmas gifts. On the token gifts, some can be had for as little as 25 cents.

Holiday Finds For Token Gifts

A Frugal Christmas

If you have kids on your list

A Frugal Christmas For Kids

Gottadance has a neat Christmas thread

Have Yourself a Freecycle Christmas...

[moasmom]

Thanks all, very much, for your thoughtful responses. I'm at work right now, so can't spend much time here. I will do more reading and responding to ideas and questions over the weekend. But I wanted to say a quick thanks.

Kara

[HappyMama]

Hi Kara,

Welcome to Frugal Village. I see you have gotten some good advice, and hope things look up for you soon.

[gmarie]

Welcome!
You have done an excellent job reducing expenses, but if selling your house is out of the question, I would consider a boarder - or renting your house and finding a cheaper place for a year or two. A friend of mine did this and it has worked out wonderfully. She is now in a better place financially and is moving back to her house this month!

Also, I think $125/ mo is very low for food in your area! My husband and I budget $250/mo, and since we now regularly come under this amount (we kept going over when we moved to NY), we are considering dropping it to $200). So, $125 would be a huge challenge! Good job!

[Luckybustert]

Hi Kara, welcome to Frugal Village! You've come to the right place for help -- folks here are so helpful, and there's so much to learn from everyone's experience. I wish you all the best as you begin your journey here

[moasmom]

In truth, the bills you list are not outrageous- with the exception of your mortgage payment. How in the world do you manage when 70% of your monthly income goes to mortgage alone!?

Yes, I agree that the mortgage is way too high for our income, and clearly our biggest hurdle in simply making ends meet. We don't manage currently; we have to rely on help from my FIL. So, my biggest goal is to get our refinance application in (finishing it today) and then hoping they will accept it this time.

I know it's probably pretty hard to believe, but we didn't even buy too much house for us. It was built in 1971 and is 1610 sf, so, nothing outrageous. We had no trouble with the payments when we were both employed, but obviously our error was having a plan in place for loss of income.

I appreciate the various advice about selling it and renting some place cheaper, but there are a couple reasons we aren't going that direction, yet. Partly because that is not a short-term making ends meet fix, since it takes so long to sell a house, moving is expensive in itself, and rents are very high here. But we are also not planning on this (at least right now) because my FIL does not want us to lose our house, which is why he is loaning us money. He feels very strongly about holding onto property. So, as much as I hate taking loans from him, he is, so far, willing to keep us afloat.

So, I am back to cutting expenses any way I can, and looking into more avenues of earning extra income.

Other notes/responses:

Re: boarder. This is a very interesting suggestion. I admit the idea scares me quite a bit, but I will definitely give it some thought. I wish we knew someone who needed a place to live.

Re: vehicles. We didn’t sell our truck, since it had been given to us. We merely gave it back to the giver. And, unfortunately we don’t live in an area with good public transit, so we need 2 cars. At least we don’t have any car payments.

Re: selling our things. I have been working all day at taking pictures, and listing things on craigslist. Fingers crossed that some things actually sell!

Re: Christmas. We really don’t exchange any presents with anyone, and haven’t since 2004, and we like it that way, so that isn’t a hardship for us. I do, however, like to bake and share a lot of cookies, but I doubt I will be able to swing the cost of ingredients this year.

Prescriptions: Ask your doctor(s) if there are any generic alternatives that can work for you if you're taking any name-brand medications.

That $40 is just copays on the prescriptions that my husband needs. It takes a lot of pills to keep a transplanted kidney working and there isn’t any wiggle room there. We actually have really good insurance, and we are lucky that that’s all it costs per month.

Since you DO have one job that you seem to enjoy, are there any overtime or extra hours available that you can pick up?

I’m salaried and ineligible for overtime. I have been looking at part time jobs and gigs posted at craigslist. I decided I don’t actually have any good reasons not to get a second job.

I actually would not mess w/ the HW pills that way because less is like none. I know going the wrong way but>> HW treatments are hugely expensive and the dog is never the same.

Thank you for these thoughts. I also take heartworm prevention very seriously, but I have a good friend who is a vet who has done her research on the amount of medicine contained in 1 heartworm pill, and she believes for our dogs (ex-racing greyhounds), ½ a pill is enough each month. It may vary by breed (greyhounds metabolize things differently than other breeds; they have very different anesthesia needs, for instance), so I think this is going to be OK for us.

Thanks again, everyone for all the thoughtful suggestions. I have a lot to think about and lots to keep working on.

Kara

[jas]

You have already gotten great adivse so I am just gong to say hello and welcome to FV!

[a.nonymous]

I appreciate the various advice about selling it and renting some place cheaper, but there are a couple reasons we aren't going that direction, yet. Partly because that is not a short-term making ends meet fix, since it takes so long to sell a house, moving is expensive in itself, and rents are very high here. But we are also not planning on this (at least right now) because my FIL does not want us to lose our house, which is why he is loaning us money. He feels very strongly about holding onto property. So, as much as I hate taking loans from him, he is, so far, willing to keep us afloat.

Sorry if this sounds harsh, but here I go anyway.

So you'd rather lose the house in a foreclosure because your FIL tells you to do so? What else does he dictate? I mean, now that you're also dependent on his money, he should make more demands for you to live as he wishes.
Or do you seriously think he's doing you a favour by pushing you further into debt? For a home you clearly cannot afford? Really?
I am sure he's doing this as a favor to you and he means well, I'm fairly certain about that. But you have to recognize at some point that this is not helping you, just extending the lead of your shackles.

Apart from the notion of having someone else almost dictate how to spend your money not sitting very well with me - if you're paying a ridiculous 70% of your income just to have a shelter, you either need to reduce the payments or up your income so that you're not spending more than 30% of your take home pay just for having a roof over your heads.
"Every place around here is that expensive" is not an excuse. It may well be a good reason to move to a place where you can actualy afford a place to live.

[tervsforme]

Welcome! This is a great place and you will learn a lot! I don't have much else to say that hasn't already been said. Your mortgage is definitely high for your income, but it sounds like you have thought this out and have a plan. Sticking to it will be the key. Good luck, keep reading posts here, it will keep you focused.