by Ashley
Ashley’s May Budget Update
I recently gave a debt update so I won’t rehash those details here. Instead, let’s talk about how we did on our budget for the month of May.
| Item | Budgeted | Actual |
| Rent | $1055 | $1055 |
| Electricity | $100 | $79 |
| Water bill | $75 | $57 |
| Gas bill | $75 | $18 |
| Sprint (2 lines) | $150 | $115 |
| Cable/Internet | $85 | $85 |
| Car Insurance | $90 | $90 |
| Health Insurance | $350 | $350 |
| Waste Management | $35 | $35 |
| Debt | $1500 | $5453 |
| Miscellaneous | $250 | $425 |
| Groceries | $380 | $406 |
| Baby Purchases | $600 | $500 |
| Gasoline | $100 | $109 |
| Savings for Irregular Purchases | $190 | $190 |
| Total: | $5035 | $8967 |
So let’s talk about this stuff…..
Rent is “set.”
Our electric bill was within budget, but I already got the bill for this month and its over $100. It surprised me how much it jumped, but I think its only going to continue to rise across the summer months. I’m going to alter the budget for the summer months, increasing the amount allocated toward electricity to $150, and decreasing the amount allocated toward gas to $25 (same dollar amount, overall, but redistributing the funds away from gas and toward electric).
Water budget stays as-is.
Gas budget decreases to $25/month (see above).
Sprint budget will decrease to $115. I’m a little disappointed because I jumped through some hoops to lower this bill and was told it was lowered to $100….but then taxes and fees get added on and the final amount was actually $115. Still lower than the old bill, but not by as much as I’d hoped.
Cable/internet stays as-is.
Car insurance stays as-is.
Health insurance stays as-is.
Waste management (trash) stays as-is.
Debt. Can we get a moment of silence in appreciation of the DISGUSTING amount of money applied toward debt during the month of May? I mean….seriously. I looked at our monthly income for the past year, and the amount we paid toward debt was more than our TOTAL MONTHLY INCOME for the following months: January 2013, March – April 2013, June – July 2013, and Sept 2013 through Feb 2014. Insane.
In terms of miscellaneous and groceries, I went “over budget” in both of these areas (mostly because of my one day falling off the wagon). I’m going to give it one more month trying to stay within these budgeted amounts. If I fail again (what will be the third month in a row), then I may bump my grocery budget back up to $400. I’m really trying to stick to $380 or below!
This is the first month in a long time I went over on gasoline (but not by much). I don’t do a lot of driving so this doesn’t concern me too much, and the amount budgeted ($100) will stay the same.
In regard to savings for irregular purchases, I’m going to increase this a little. After our discussions about dental health, I think I need to start setting aside a little more money for upcoming dental visits for the husband. As a reminder, we have been saving $190/month:
- $40 for semi-annual fees (car title/registration fees)
- $50 for car maintenance (oil changes, saving extra for any necessary repairs and for potential new-to-us used truck fund for husband….probably won’t be needed until winter).
- $50 for dental/vision….will increase to $125/month
- $25 for travel and Christmas
- $25 for 3-6 month expenses
My plan is to increase this amount from $190/mont to $265/month (an extra $75/month for dental).
Finally, let’s break apart the “debt” figure to see why this is so high!
First, let me give an update on the snowflake payments I made from our April surplus (note, these funds are NOT included in the May figures because this money is from April surplus funds).
At the end of the month, we had $3197 leftover.
After talking to the husband we allocated the funds as such:
- $1,000 toward our 3-6 month savings (I know readers have disliked this in the past, but husband is really pro-savings so this was a compromise, rather than allocating all toward debt).
- $1560 toward Wells Fargo
- $181 toward Mattress Firm (paid off account)
- $460 toward back taxes. I never mentioned it, but similar to Steph, we pay estimated quarterly taxes. Key word being “estimated.” We weren’t too far off, but we did owe a little money, so we paid toward taxes out of the surplus.
Note…I realize this actually totals to $3201 (not $3197), and I never accounted for this $4 overage anywhere in our budget. Soooo, yeah. I wasn’t worried about it since its only $4. Not a big deal.
Here are our May debt payments:
- Wells Fargo = $4140 (that’s an $800 “regular” payment + a $3340 “I cant take it anymore, must pay this off” payment).
- Sallie Mae Federal (8.25% APR) student loan = 62
- Carmax car loan = $470
- Bank of America = $35
- ACS Student loan = $25
- License Fees = $55
- Medical Debt = $666 (<yikes!)
A little update on the medical debt drama. I have now established payment plans for 3 separate entities at $25, $50, and $75 respectively (amounting to $150/month).
Do you remember all the drama I was having with our insurance company and the Mayo Clinic? Well finally I received a response…..the insurance agent we had spoken with (who said a flat rate of $100 would be applied toward the bill) was wrong. That’s only for out-of-network hospital stays. Ours was an out-of-network consultation. No money is granted for that. So after literally 5 months of back-and-forth, we were left empty handed. I called Mayo Clinic and asked if they would give me a reduced bill if I paid in full. They could do 10% (I pressed for more, but no luck), so I whipped out my debit card and paid off the entirety of the $516 bill. This was certainly rash and probably not in our best financial interest since this debt is interest-free and I could have applied that money toward our Bank of America credit card. But I was so exasperated and irritated with all the time and energy I’ve spent on this bill that I just couldn’t take it and I wanted it out of my life forever. Would I do it again? I don’t know….I’d probably put the money toward BoA. Did it feel good in the moment? You betcha!
So there’s that.
Future debt payments will be as follows:
- Sallie Mae Federal Loans (8.25%) = 62
Carmax = 470….PenFed = 400 (after just refinancing we have a new lienholder and a lower monthly payment)- Bank of America = 1005 (snowballing payments: $800 from WF, $100 from Mattress Firm, $35 from BoA, and 70 from the car refinance since our payments are now lower)
- ACS Student Loan = 25
- License fees = 55
- Medial Debt = 150
Total debt payments = $1697/month
And any surplus will be allocated toward BoA. My goal is to eradicate it THIS MONTH (June) so I’m hoping for some leftover funds at the end of the month to do so. You can see all my revised financial goals here.
This has turned out to be incredibly long so I’ll cut myself off here. Back this afternoon with an update on our income for the month of May.
Hope you all have a great Monday!!!
Any suggestions or advice for my current debt-reduction plans? Any areas where you see room for improvement?
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
How do monthly debt payments exceed monthly income? One-time I could see, but you are doing this a lot. Are you drawing down savings?
I think she meant that their debt payments this month were more than their total income during previous months. I think she was just surprised that they are now able to pay more in one month than they were bringing in previously. Am I making sense?
Yes – sorry if this was confusing. I meant that the amount we paid toward debt during the month of May 2014 was more than our total monthly income for several earlier months (note – not the COMBINED income of all those months, but just more than the single monthly income for each of the months I listed)
Boy, you totally have your finger on the pulse of your finances. I love that snowball total for the coming month!
As for electricity, our rates go up in the summer. It sucks that we have to use more electricity and pay higher rates on top of it. Anyway, just pointing out that a summer rate increase could also be affecting your bill.
I think this is part of it. I had opened the bill, gasped at how much it jumped, then threw it in my pile of “to be paid” bills. I need to pull it back out and examine more closely to make sure there weren’t any mistakes, but I think that a price increase is really one of the main culprits.
Great job!
You should check with your electric company to see if they could give you a better rate. I ‘assumed’ the reason our winter bills were so high was because of all our Christmas lights but once Christmas was over the next few bills were still extremely high. I called my electric company and found out the rate plan I had been on had expired in November and I never called to get a new one so it went to regular rates which were much higher. It can’t hurt to check.
That’s a really good point! I need to call and check.
My bills went down considerably once the new rate plan was in effect.
That really stinks about the medical bill/insurance drama. Insurance companies can be a pain in the rear, and especially since the insurance agent that talked to you was wrong! I’ve caught errors on multiple insurance bills and have had to call to get them corrected. I heard some crazy stat one time that something like 1/3 of all insurance bills have an error.
Anyway, sorry you had to deal with that. But your numbers this month look great!
Thanks! Yeah, it wasn’t just 1 agent either. I’ve been going back-and-forth for MONTHS and this was the same story I got every time I called (which was about once every other week). I can see how the error would be made – Mayo Clinic is a big hospital, so I’m sure agents just assume the visit was for a hospital stay. In fact, we had a scheduled consultation so it was a 1 day (really like 2 hour) outpatient thing. In that regard – its insane how much doctors can charge for a consult! The most annoying thing is that we had called our insurance before we ever went to Mayo Clinic. Initially we never thought we would be reimbursed at all but the first agent we spoke with told us we would get $100, so that’s what started the whole back-and-forth drama. If we hadn’t called or spoken with that person, we would have just set this up on a payment plan MONTHS ago, but we thought we were waiting for a $100 check! Very frustrating!