I am not new here, but I have a problem. I don't know how to hold on to money. I get paid bi-weekly and am trying to payoff some very old debts to get my credit back together.
How do you go about taking care of that? By the next day, I don't even have enough to buy a soda. I don't have the large responsibility of paying the bills. My dh does that.
I need to know how to start having money from week to week. I owe a lot. I would like to get a new car by summer. I can't even open a checking account because I am in collections with the banks. Will someone please help me with maybe a basic budget or using the old fashion envelope method. I need to get back on track by summer because I won't have a income coming in for two months because of the type of work I do. I am sorry for the long question. Help.
By malmal from Boston
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Are you paying your self first or setting to much money aside every week for debt re-payment, I am still quite unsure of the situation, and also maybe it would help if your DH and you sat and did the finances together, it seems to me that he is doing it all and you are at a huge loss It takes to to get debt when married and it takes to to pay it off it is not easy but with his help you may just come out on top!
You have to figure out where your money goes. I'm not talking about writing down every penny, because I'm pretty organized and even I don't like doing that. But a simple 'what comes in' and 'where it goes' kind of list will help you figure it out.
You say you're broke the day after payday. Well, where is the money going? Is it all necessary bills? List out what gets paid every month. Then put them in order of priority. Maybe you'll see you're spending money on un-necessary things (e.g. take out food, movies, etc.) or bills that could have been prevented (credit cards)?
After you have it all listed out, try to cut back to mostly necessary things (rent, utilities, food). Then take the money you don't spend on unnecessary things and channel it over to 1) savings, to build it up, and/or 2) loans or credit card bills that charge interest.
Make a commitment to 1) stop using a credit card or getting loans, and 2) make a plan to pay off credit cards/loans. This will take some work and commitment and time, but the payoff is big. Down the line, after the last payment of a particular recurring debt, start putting that amount towards another debt, or into savings.
You say you want to buy a new car by summer. Well, that sounds really unrealistic. Lower your expectations; get a used car, if it's necessary at all. You sound like you might be relying on loans to get you through things.
I can tell you from my own experience, it will be a fantastic feeling to get things under control and be able to build up savings. But you have to decide to do it, and then just do it.
Are these old bills yours alone or are they combined bills? If they are combined you and your husband should be putting your money together and figuring out what goes where. Do you absolutely need a car, is there bus service where you live? Where I live you can buy a one month bus pass for $25.00 and that is a lot cheaper than maintaining and running a car. When I graduated from high school I went and lived with an aunt and uncle because I got a job where they lived. I paid them rent and when I wanted to go out I did a lot of walking, as far as that goes I walked one mile each way to and from work. But my aunt used the envelope method.
My uncle paid the mortgage payment, utilities, etc. He gave my aunt a certain amount of money for groceries and small household expenses that she might want, her clothing and spending money. It worked well for her. She had an envelope for each week's worth of groceries, one for each weeks of other misc. household expenses, and one for spending money. My uncle only got paid monthly. I do this to a certain extent, only I don't use the envelopes. I make sure the necessities are paid, like rent, utilities, etc. Any money that is left over is for what I call fun items. I am on Social Security of $700.00 a month and that is what I live off. I don't use the regular city buses because I can't walk that far. I use the cities paratransit buses and they are $2.00 each way. I only use them when I absolutely have to go someplace, otherwise I stay home.
Google make your own mixes; save a lot of $ by making your own mixes; mayonnaise; etc; www.ehow.com has lots of good ones; so does allcoooks.com; busycooks.com;
This is only a variation on the tried and tested envelope idea but what about using canning jars for a month instead of envelopes so you can actually SEE the money you have set aside for things. It will either go down if you haven't been realistic about the amount you needed or (hopefully) you will find the will to keep something in the jars. This works particularly well if you have smaller denomination bills and change in the jars. Then you can say ok I have $5 I can and I am going to buy what I need with that.
It is a bit like quitting smoking, you have to make up your mind that you want to change your spending habits before you can.
Its may be a difficult idea to grasp but people who don't have any money don't buy soda every day because they can't afford it and many people who have money don't buy soda every day because they realsied a long time ago they didn't need it!
I really hope you can set yourself free from your money worries as you are the only one who can.
Sorry me again, the other posters are right you do not need a new car by the Summer. That is another way to set yourself free. We are the proud owners of an 8 year old deisel Toyota with 200,000 on the clock. The day we said we actually don't need to buy a new car this year so do we really want to? was the day we began to be able to save for our retirement!
Here is a very helpful article on budgeting:
It comes from one of my favorite websites:
One of the best places to save money is in your food budget. This site has a menu that will feed 4 to 6 people for $70.00 a week, and it comes complete with a shopping list, recipes and an action plan:
You can go to your local Consumer Credit Counseling. It is a free service. They help you organize all of your bills, contact all of your creditors, and help you with a budget plan. The monthly budget worksheets are very helpful. If you feel "out of control" with the situation, they will help you back to a feeling of order and control. I used this service many years ago and it was a life saver.
Every time you want to spend that nickel in your pocket, tell someone who have trusted and is in on the deal. Like a drug addict, you have to change your life style. Even the smallest whim you need to learn to say no to it. With each sucessful time, you build on courage to do it again. Get sloppy and it is as if a drunk took another drink.
I have a similar pay schedule with my work, so budgeting is a major part of my life, here are some concrete things I do:
1. Decide how much money you need to save a month, take that amount out of your paycheck first. Act like that amount doesn't even exist, straight to savings before you buy stuff. You can start with a couple hundred from each check and work your way up.
2. Limit how much you spend on groceries and misc items each Week. Cut coupons, buy only what you absolutely need, give up: soda, chips, ice cream, coffee, and other snack foods. Tell yourself you will only spend $100 this week on food/necessities. Buy store brands and what is on sale.
3. Stay away from stores unless absolutely necessary, the less time you browsing, the less you spend.
4. Look at how much you spend on cable each month. We really cut down on our entertainment expenses by switching to Netflix and quitting cable. Literally $1000's of $$ each year.
It is hard to start, but once you get into the habit it become second nature.
I too live on a very tight budget, I was Active Military but was medically retired and now live on about $900 a month. By the time I pay "my" bills I have only enough for gas money and am unable to help my husband pay things like the utilities and I too am i collections with a few places and have credit cards to pay on (one of which I only owe less than $200 :)) Honestly I suck at saving money so anything that I want saved I always give to my husband and he puts it in his account and so far that has worked as far as savings but I still never have 'extra money' for me.
I got a lot of good ideas listening to Dave Ramsey. I was able to payoff some old bills by using his 'snowball' technique and some 'baby steps'. Before you buy a car, you should try this. PS. He would be horrified to hear that you want to buy a 'new' car. Sign up for his financial peace workshops- find him on the net...
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