by Hope
I am working on creating a traditional budget. However, the forecast I use, really works for me so I thought I would share next month’s forecast so you can see what I do.
Here is my planned spending and income for August, 2024.
| Date | Payee/Category | Anticipated Amount |
|---|---|---|
| 08-01-2024 | Groceries / Hygiene / Dogs / Gas | -590 |
| 08-01-2024 | Income | 7925 |
| 08-02-2024 | Auto Insurance | -1460 |
| 08-02-2024 | Credit One 2 | -50 |
| 08-02-2024 | Personal Loan 2 | -500 |
| 08-02-2024 | Pest Control | -80 |
| 08-03-2024 | Mortgage ($200 principal only) | -1215 |
| 08-03-2024 | TX to Savings | -790 |
| 08-03-2024 | Investments | -350 |
| 08-03-2024 | TX to TRV SAV 1387 | -500 |
| 08-03-2024 | Taxes, SS, Medicare (30%) | -2550 |
| 08-04-2024 | Amazon CC | -60 |
| 08-04-2024 | City Utilities - varies | -150 |
| 08-07-2024 | Auto - Maintenance | -100 |
| 08-09-2024 | Electric - varies | -250 |
| 08-10-2024 | Income - varies | 440 |
| 08-14-2024 | Verizon | -350 |
| 08-15-2024 | House (estimated) | -350 |
| 08-20-2024 | Kids Payments | 1215 |
| 08-20-2024 | Frontier CC | -130 |
| 08-26-2024 | Windstream | -71 |
Notes:
I’ve just copied and pasted this from my spreadsheet that actually goes out through December of 2025. So it’s organized by date I expect it to come out of my primary account whether via transfer to another account or to the recipient.
- Income: I am a contractor so my income does vary, sometimes wildly, and sometimes very little. You will see two line items for income…one my primary contract and the other encompasses all my “other” contracts plus my fast food job income.
- Kids Pay: Three of the five kids are on shared phone plan and a shared auto insurance plan. One of them pays rent to me ($250). So this total is a lump sum of what the 3 of them contribute to the bills that are listed in this spreadsheet.
- House: I do not typically have a substantial house line item, but I am planning to power wash the house, deck and picnic table next month. And then reseal the deck probably will have to touch up house paint. It’s time and I want to make sure it is properly maintained to extend it’s life. Thus this is an estimated number for the supplies and help for that work. (Beginning in 2025, I have ideas to start saving for another large house improvement/investment item, but more on that later.)
- Mortgage: I am continuing to pay an extra $200 toward my principal every month. I read somewhere that is you make an extra one or two payments per year, it’s knocks years off your mortgage. That’s how that started. (That was after BAD dissuaded me from trying to pay ahead on my mortgage monthly payments.)
- Savings: I have a primary savings account (the newly establish 10% of income goes there.) Then I have a travel savings account. This will cover our Thanksgiving trip. It will be there when we all need to get to Texas when my mom passes. And I’m hoping to do some sort of family trip or something next May when Princess graduates since we are all planning to be here for that.
Any questions? Constructive criticism?
This is how I have planned and tracked my income and spending for YEARS. It works for me.
My failure is in my self control. And that I am working on diligently. Like, very diligently. And yes, I know only time will tell that.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 3 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
What is Windstream?
While true that paying extra on the principal will shave time off your mortgage, your high interest credit cards and building an emergency fund should take priority.
Your car insurance is extremely high. I am shocked by that number. Any way to bring that down? Shop around, raise deductibles, etc?
I also encourage you to track your expenses this next month. See how your planned spending compares to your actual spending. The reality may be very different than what you forecast.
Windstream is internet service at my home.
Yes, our car insurance is VERY high. Three kids (ages 19-21) does not help. Not to mention Gymnast has now had 3 significant wrecks, including totaling a car. We have certainly shopped around; alas, nothing cheaper at this point in time.
I actually spend exactly what I forecast as I pay all the bills as soon as I get paid. The only money not spent immediately is the $500 line item that is used through the months for groceries, gas, etc. (It’s higher this month because I overspent on gas last month due to driving to Atlanta every weekend, sometimes multiple times to help Princess move.)
I get in trouble when there is extra money or credit. Lack of self control. I am greatly focused on improving that. It is key to my success.
But, does it ” work for you”? Their is an old saying that ” the definition of insanity is doing the same thing over and over again but expecting a different outcome”. If this is how you have always done it yet, and a decade later you are still struggling with the same issues and more debt how exactly is it “working for you?” Why would you not put the extra $200 toward your high interest debt instead of a lower interest mortgage ?
Girl, you could be out of debt. You just don’t want to be.
I kinda chuckled at the line about the extra mortgage payments and readers advising her against them – because yeah an additional 200 a month could actually clear off your debt and THEN you will have more wiggle room for the mortgage/emergencies/etc!
The thought behind extra mortgage payments was to give me peace of mind should income drop again…
I get you but at the end of the day, you probably have to reconsider whether you’d rather aggressively pay down your mortgage while having the consumer debt, OR aggressively pay down your consumer debt, quickly and then attack the mortgage! I know you have to do what feels right to you though, so I understand that point in a sense too.
That’s what an emergency fund is for. Plus you’re probably paying extra on the principal, which means that you’ll continue to owe the full amount monthly until the loan is paid off.
Generally speaking paying extra to the principal doesn’t buy you “ahead” on your payments. It brings the finish line closer but a few years. If your income were to drop, you’d still have the same monthly mortgage due.
I hope this does not come across as condescending, because that is not the intent at all! I just want to make sure you understand that extra principal payments do not mean you can skip payments later if you have a tough financial situation. All they do is pay off principal balance. Your regular payment remains the same until the day your mortgage is paid in full. It just adjusts the amount going to principal versus interest.
Paying extra toward your mortgage doesn’t make sense when you have CC debt at 30% interest. That’s what blog readers are telling you. Your mortgage interest rate is nowhere near 30%, and if you applied that $200 to your consumer debt rather than your mortgage, you would be able to knock out most of your credit cards by the end of the year, assuming you’re snowballing your payments.
What financial support are you providing Princess?
She is helping princess fund her rent for the last year of college – she posted a few weeks ago that princess chose a place and she has stepped in to help with the difference in rent.
I think that was Kim’s point. It’s not included in Hope’s budget.
It may not come up until September technically when school starts back?
Princess has already moved.
She says in another comment that she drove to Atlanta multiple times this month to help Princess move. I’d imagine that financial commitment starts in August, if it didn’t already begin in July.
Listen to Walnut.
Do you have any expenses for medical insurance or associated expenses? You have “medicare” included with one of your line items but I assume that’s going toward taxes, etc and not Medicare for yourself based on your age. I agree with other commenters here, you need to start really tracking your spending by the penny and not these round numbers. I’m talking $1 for the drink at the drive thru, $2 for a birthday card.. you need to start getting honest with yourself.
I do not have insurance or medical expenses. I think I’ve been to the dr once in the last two years and paid cash at an urgent care type situation.
Included in the $500 are the supplements I take. My blood sugar is tracked and regularly and not a cause for concern at all.
I am considering finding a “emergency” type insurance once I get full time hours/income.
Why on earth would you put extra towards your mortgage rather than getting health insurance???
If you are a diabetic like me and my husband you either see a doctor every few months to check your A1c, use blood sugar test strips, and take either meds or insulin. How do you know your good sugar numbers are ok without testing. I need your secret.
I have an abundance of test strips from over the years and also received my mom’s supplies when she no longer needed them.
I’ve had my diabetes under control for several years now with exercise and diet. When I went on Metformin, etc several years ago, my goal was to get off them. And I did a year later.
FYI – test strips expire about awhile and will give you inaccurate readings.
Not having medical insurance is a financial disaster waiting to happen. You’re a woman in your 40’s – outside of having a chronic condition that should be maintained by a doctor, what about mammogram, colonoscopy, regular bloodwork, etc?
oh gosh-where to start….all from a place of wanting you to succeed.
First of all, forecasting has NEVER worked for you. I think there is not a single reader who will agree that forecasting has worked for you.
Second-you need to track your spending, every dime, for a few months. It will show you how much you really spend in each category and then you can determine a realistic amount for that category.
Third-there should be separate categories for food, pets, and gas. They are very different items and have nothing to do with each other.
Fourth-Where is anything health related? Insurance premium, HSA or FSA, long term care insurance premium, fund for ongoing expenses related to your vision or hearing, copays, RX, etc.
Fifth-stop paying down your principal on your mortgage. Your mortgage rate is clearly below the rate you have on all your cards with balances. And you have mentioned you may not stay, it makes no sense to pay it off early. Put that $200 towards a credit card balance until all the cards and debt are paid off, then roll it into your savings/investing.
Sixth-I understand Gymnast has a rough driving record. With that being understood, him having a high car payment is ridiculous. If you have at least $5000 in equity he needs to sell that car, take the equity and buy a used car or an e-bike or use public transportation.
Seventh-how much do you give your kids each month? That can add up, track it for a few months and see where you land. That kind of spending falls through the cracks and likely adds up to quite a bit.
Eight-back to the shoe conversation. For a job on your feet, good shoes are a must. Sketchers are not likely what you need. You like your HOKAS, get a pair for work and use it only for work. As the spouse of an elite ultra distance runner, I am pretty familiar with the rate of going through shoes, and standing 6-9 hours a week is not going to wear out a pair of good shoes in two months. Hard core runners put 300-500 miles on their shoes before they “retire” them. So assuming about 10 miles a week on your feet at your job and replacing them at 400 “miles” you should get about 10 months out of them at least. Stuff them with newspaper every day when you come home and they will dry out and it absorbs odor.
Thank you for coming to my Ted Talk! Heh.
I am certainly planning to track my spending. I’ve created a column next to the forecasted number and will break it down even further.
I do not have a medical line item. And no insurance. I do take a variety of supplements but those are included in my grocery budget.
Heard about the mortgage.
As for Gymnast’ car, that is all his decision. He is covering 100% of his own expenses including his portion of the car insurance.
I don’t think Hoka’s make non-slip shoes for restaurant work, but I will check. I agree with my walking shoes (Hoka’s) lasting. I rotate my walking shoes every day to give them a chance to dry out. But with only one pair of restaurant shoes, that’s not been possible. And sport shoes are prohibited by the dress code too.
It’s the restaurant wear and tear and wet and gross-ness that makes them need to be replaced so often.
Also, I really appreciated your TED talk and reasonable advise.
I want you to get out of the debt and stay out of it – and I do hope you find good work shoes. Sending good vibes even if it may not appear that way.
You are charging one of your kids rent to the tune of $250 while paying for another kids rent? Speaking of, where is the payment for that kids rent? If you stick to this forecasting exactly, why do you not have paid off more debt
Yes, the child paying rent lives at home and the only contribution she makes aside from the rent is to pay her own phone bill. She drives my car, is under my insurance, and eats the food I provide. She does not work full time by choice and is not in school or any training program. She’s only been paying rent since February of this year.
I have agreed to help the other child for her last year of college. She’s been doing it 100% on her own for the last two years. And as a result of circumstances beyond her control, got into a bind with housing. Different kids, different paths, different needs. Fair but differnt.
All the kids’ contributions to bills listed in this forecast are lumped into Kids Contributions – their phone payments, insurance, rent.
Where in your spending is the money you are paying for Princess?
I don’t think the shoes are a big deal. The big deal here is that no have no health insurance whatsoever. Anything could hapoen, any time. Then you would be in heavy medical debt. Doesn’t that bother you?
To be honest, it doesn’t. And I won’t go any further than that because I know my thoughts on this are not in line with most peoples.
I will get a “emergency” policy of some sort most likely. But my kids are all aware of my desires should something happen to me medically.
How does being aware of your desires protect them if you break your hip or need a knee replacement or get an infection that requires hospitalization? If you have no money, they will feel compelled to take care of you or watch you suffer with the legally required lowest medical care the system can get away with giving someone who has no money.
Yes, I think she’s counting on the State (taxpayers) picking up the costs.
I took a stab at grouping the items to give you another viewpoint. The kid reimbursements were all allocated to Transportation but that’s obviously not preciase, so you could split those out. But it might give you another viewpoint here: Of your net income of 5815, you’re putting 1140 to savings/investments and 740 to debt. You’ve got room to be more aggressive on the debt payments.
Income (Net): 5815
Housing (Total): -2045
Transportation: -345 (all kid payments were mapped here, which isn’t right but you can adjust)
Non-Discretionary: -661
Discretionary: -850 (cell phone is arguably not, but travel is. Understand you have your reasons, but think about it)
Savings: -1140
DebtPmts: -740
Grouping Detail:
Date Payee/Category Anticipated Amount Grouping
08-01-2024 Income 7925 01-Income
08-10-2024 Income – varies 440 02-Income
08-03-2024 Taxes, SS, Medicare (30%) -2550 03-Income
08-03-2024 Mortgage ($200 principal only) -1215 10-Housing
08-04-2024 City Utilities – varies -150 11-Housing
08-09-2024 Electric – varies -250 12-Housing
08-02-2024 Pest Control -80 13-Housing
08-15-2024 House (estimated) -350 14-Housing
08-02-2024 Auto Insurance -1460 20-Transportation
08-07-2024 Auto – Maintenance -100 21-Transportation
08-20-2024 Kids Payments 1215 21-Transportation
08-01-2024 Groceries / Hygiene / Dogs / Gas -590 30-Non-Discretionary
08-26-2024 Windstream -71 31-Non-Discretionary
08-03-2024 TX to TRV SAV 1387 -500 40-Discretionary
08-14-2024 Verizon -350 41-Discretionary
08-03-2024 TX to Savings -790 70-Savings
08-03-2024 Investments -350 71-Savings
08-02-2024 Credit One 2 -50 90-DebtPmtsMin
08-20-2024 Frontier CC -130 91-DebtPmtsMin
08-04-2024 Amazon CC -60 92-DebtPmtsMin
08-02-2024 Personal Loan 2 -500 99-DebtPmtsMajor
You should read Six Figures Under and see how they budget based on last month’s income. If you could pull it off that might work a lot better for you than “forecasting.” fwiw she is also religious.
If I recall correctly, I believe Hope may have done this for a while back when she had another corporate job. I think that is a great idea.
Having thoughts not in line with others doesn’t change facts.
There is an actual website with the cost of medical care for various ACCIDENTAL ISSUES that can happen to anyone- much less to someone who already has diabetes.
It’s about a grand per broken bone,and if they do an MRI, thousands. Hip replacement would likely take your entire annual income.
But we’d like to know if you have some secret way of escaping those costs? The kids knowing your wishes is end of life stuff. If you go to an ER, they have to help you. And unlike the Covid days, there arent’ really ways to get the bills forgiven, just long long long payment plans.
I had to go in for something simple that happens to lots of people and the three days I was in was 35,000. How on earth would that get paid? Would the kids have to help? Give up on Princess’s rent help?
For someone concerned about kids, there is a very real threat here that you will get a medical cost and bail out on all your other expenses. And if looking at old age, I can tell you that being poor and in a state run nursing home is not a good way to end up.
You have helped me understand why many Americans end up bankrupt due to medical bills. I have never met or known anyone who refused to get health insurance. The internet is an amazing place.
If you are making $7000 a month why are your student loans in deferral and when will they be required to be part of your budget?