My DH is on commission. Not 100%, but enough that it matters. What is the best way to do a snowball chart, when you have no clue how much "extra" you can put to the cards....because it changes every month?
I also hate having to do a budget off of this. I never know when one month is going to be really good, and we can pay down something, or really bad, and I should've saved that money. Ugh.
thoughts? Suggestions? I'm game to hear anything. I'm so frustrated. lol
TIA.
Full Version: Snowball Question
I work 100% commission, but have a pretty good idea of the "minimum" I will bring home a month. I've built up my base accounts to where I know my income RARELY drops below a certain level. So, what I do (not so well some months! LOL) is budget/plan off the minimum.
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
I don't know if this is the *best* approach, but it's what would make me feel the most comfortable, were I in that situation - create a cushion of 3 month's normal expenses in your checking account. Average out hubby's income over the last 12 months and see how much that is over your expenses. Use that amount for snowballing, using the cushion where needed and replenishing with overages.
So, for very round, imaginary figures, if your monthly expenses are $1,000 and average income is $1,500, your savings would be $3,000 and you would use $500/month for snowballing. If income one month is $1,200, you'd take $300 out of savings. If income is $1,800, you'd put $300 back in. If savings is full and income is > $1,500, you'd apply the extra to snowballing.
I am a security freak and I can't tell you how much less stressed I became when I didn't have to worry about overdrawing my account all the time.
One other thought is to cut expenses until you can manage on his base salary (or yours). I wouldn't expect you to live at the poverty level, but if you have basics covered, you can save up to pay for things, rather than get them on credit and be worried about a minimum payment you might not always be able to make.
So, for very round, imaginary figures, if your monthly expenses are $1,000 and average income is $1,500, your savings would be $3,000 and you would use $500/month for snowballing. If income one month is $1,200, you'd take $300 out of savings. If income is $1,800, you'd put $300 back in. If savings is full and income is > $1,500, you'd apply the extra to snowballing.
I am a security freak and I can't tell you how much less stressed I became when I didn't have to worry about overdrawing my account all the time.
One other thought is to cut expenses until you can manage on his base salary (or yours). I wouldn't expect you to live at the poverty level, but if you have basics covered, you can save up to pay for things, rather than get them on credit and be worried about a minimum payment you might not always be able to make.
wow, these are some good replies!
QUOTE(Jen23514 @ Apr 9 2008, 01:03 PM) 
I work 100% commission, but have a pretty good idea of the "minimum" I will bring home a month. I've built up my base accounts to where I know my income RARELY drops below a certain level. So, what I do (not so well some months! LOL) is budget/plan off the minimum.
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
Okay. I had to read that a few times. lol. Thank you thank you thank you. Seeing others in this situation makes it much easier. DH's minimum wouldn't cover our mortgage/bills, so I think that's the hard part. He does need to make a certain amount. I also think, you getting paid once a month, although VERY hard, is easier to figure out a budget with commission. Ugh. I mean DH may get paid X one week, and half of X another. I just need to figure that out too.
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
QUOTE(Call Me Laura @ Apr 9 2008, 01:04 PM)
I don't know if this is the *best* approach, but it's what would make me feel the most comfortable, were I in that situation - create a cushion of 3 month's normal expenses in your checking account. Average out hubby's income over the last 12 months and see how much that is over your expenses. Use that amount for snowballing, using the cushion where needed and replenishing with overages.
So, for very round, imaginary figures, if your monthly expenses are $1,000 and average income is $1,500, your savings would be $3,000 and you would use $500/month for snowballing. If income one month is $1,200, you'd take $300 out of savings. If income is $1,800, you'd put $300 back in. If savings is full and income is > $1,500, you'd apply the extra to snowballing.
I am a security freak and I can't tell you how much less stressed I became when I didn't have to worry about overdrawing my account all the time.
One other thought is to cut expenses until you can manage on his base salary (or yours). I wouldn't expect you to live at the poverty level, but if you have basics covered, you can save up to pay for things, rather than get them on credit and be worried about a minimum payment you might not always be able to make.
So, for very round, imaginary figures, if your monthly expenses are $1,000 and average income is $1,500, your savings would be $3,000 and you would use $500/month for snowballing. If income one month is $1,200, you'd take $300 out of savings. If income is $1,800, you'd put $300 back in. If savings is full and income is > $1,500, you'd apply the extra to snowballing.
I am a security freak and I can't tell you how much less stressed I became when I didn't have to worry about overdrawing my account all the time.
One other thought is to cut expenses until you can manage on his base salary (or yours). I wouldn't expect you to live at the poverty level, but if you have basics covered, you can save up to pay for things, rather than get them on credit and be worried about a minimum payment you might not always be able to make.
I think this is great. Thanks for the info. My only concern would be using the money I saved. I don't like having to dip into my savings. I mean, we do have a savings, right now, it's about 1x his salary, but ugh. I guess if we had 3x it wouldn't bother me as much. Thanks for the info. I know a security blanket would help me too.
QUOTE(k9kreationz @ Apr 9 2008, 04:34 PM)
DH's minimum wouldn't cover our mortgage/bills, so I think that's the hard part.
I mean DH may get paid X one week, and half of X another. I just need to figure that out too.
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
I mean DH may get paid X one week, and half of X another. I just need to figure that out too.
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
OMG *slaps my forehead* I reread what I wrote, and even I am like WTH?????
Let me start over... In your case, let's say X is $2500, that is ALL your bills for the month (I'm just pulling a number out of the air).
I would personally try to match X in your bill pay account, to buffer the ups and downs of commissions. Once you get that buffer there, you won't believe the amount of stress that leaves your shoulders. Personally, I am more comfortable with 2X, but you need to evaluate that for yourself.
Once you have that extra $2500 in your bill pay account..... based on your debt, your lifestyle, your spending, etc... you need to decide what you think is a more important priority.... getting 2X in there OR start snowballing your debt at a greater rate than what is built into your current budget.
You can build a simple snowball plan into X.... and then once you have your buffer saved up, use the extra commissions above and beyond X (we'll call it Y) to add to your snowball. I am a FIRM believer though, in having that buffer when you work commissioned jobs. As I said, once my debt was paid off, I took Y and started investing.
I saw your wrote Laura that you do not like to dip into your savings... this is why I keep my bill pay account, my spending (debit) account, and my savings accounts separate. The buffer I keep in my bill pay account I do NOT count as savings.
ETA: Did I do any better today?!
Yeah, I probably shouldn't have used 'savings', although technically that's how I'd accomplish it. I have a savings account tied to my checking account and can transfer money back and forth, but of course, get a higher interest rate on the savings, so I keep my cushion there. I have a completely different "savings" account where it takes a couple of days to get the money out, so I really have to need it before I raid that. The bulk of my liquid savings is there, and only a cushion in the linked one.
I really like the multiple accounts idea, since I have the same problem with using money I've saved 'for a rainy day' if it's not raining. It really bugs me to raid the savings account (which I guess is a good thing) but it might be easier with a "bills" account. Expect it to fluctuate and you should be ok (I don't have any problem taking my checking account to 0, just savings...)
Also, if you have room to store stuff, buy some staples in bulk. Having some beans and rice in the pantry can help you feel like you won't starve to death if things get lean for a month. (lol, it's starting to sound like we grew up poor or something.)
I really like the multiple accounts idea, since I have the same problem with using money I've saved 'for a rainy day' if it's not raining. It really bugs me to raid the savings account (which I guess is a good thing) but it might be easier with a "bills" account. Expect it to fluctuate and you should be ok (I don't have any problem taking my checking account to 0, just savings...)
Also, if you have room to store stuff, buy some staples in bulk. Having some beans and rice in the pantry can help you feel like you won't starve to death if things get lean for a month. (lol, it's starting to sound like we grew up poor or something.)
by keeping a month's worth of expenses though, you can usually open up a money market account and still do online bill pay outta there... and earn a little interest. yeah, the interest sucks, but for me and my situation the peace of mind is 100% worth it.
btw, nothing wrong with beans and rice once in awhile anyway..... americans eat too much meat anyway
btw, nothing wrong with beans and rice once in awhile anyway..... americans eat too much meat anyway
QUOTE(Jen23514 @ Apr 10 2008, 07:30 AM)
QUOTE(k9kreationz @ Apr 9 2008, 04:34 PM)
DH's minimum wouldn't cover our mortgage/bills, so I think that's the hard part.
I mean DH may get paid X one week, and half of X another. I just need to figure that out too.
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
I mean DH may get paid X one week, and half of X another. I just need to figure that out too.
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
OMG *slaps my forehead* I reread what I wrote, and even I am like WTH?????
Let me start over... In your case, let's say X is $2500, that is ALL your bills for the month (I'm just pulling a number out of the air).
I would personally try to match X in your bill pay account, to buffer the ups and downs of commissions. Once you get that buffer there, you won't believe the amount of stress that leaves your shoulders. Personally, I am more comfortable with 2X, but you need to evaluate that for yourself.
Once you have that extra $2500 in your bill pay account..... based on your debt, your lifestyle, your spending, etc... you need to decide what you think is a more important priority.... getting 2X in there OR start snowballing your debt at a greater rate than what is built into your current budget.
You can build a simple snowball plan into X.... and then once you have your buffer saved up, use the extra commissions above and beyond X (we'll call it Y) to add to your snowball. I am a FIRM believer though, in having that buffer when you work commissioned jobs. As I said, once my debt was paid off, I took Y and started investing.
I saw your wrote Laura that you do not like to dip into your savings... this is why I keep my bill pay account, my spending (debit) account, and my savings accounts separate. The buffer I keep in my bill pay account I do NOT count as savings.
ETA: Did I do any better today?!
LOL. Thanks. One question. You said, "bill pay account". I just want to verify that you do mean it's a 100% separate checking account to pay bills with. If so, that makes MUCH more sense. lol. My own "duh" moment. I was thinking you meant "Bill Pay" as in some sort of program. Not just some account you pay bills with. If that is the case, what are you using? lol.
Okay, so if I leave your fake 2500 in the bill pay account......the first 2500 is the buffer, right? the second 2500 I(now totalling 5000) can either be a buffer, or what i'm paying bills with. If it's a buffer, then I need yet another 2500 (total 7500 now) to be used for bills. And THAT last chunk of 2500 is 1. what pays bills and 2. what comes in from his paycheck. And if what he makes doesn't cover everything, I just use the buffer that's already built in (frist and optional second 2500). All other monies either go into a spending account or to my snowball. Is that about right?
I think I'm understanding this. lol. I think it'd take a LONG time for us to build a buffer, however, we have a chunk of money here and there that we can use for buffer. I just need to figure out to "appoint" which account is which without having to open new ones.
Just means moving money around. I also like Laura's idea of waiting until the "extra" got to a certain point. I'm going to throw these two ideas at DH and see what he feels is good too....and make a plan.
Thanks!!! This is awesome. Unfortunately, we've been dipping WAY too much into our "buffer" over the past 3-6 months. So our regular one is all but gone. Time to move things around, rebuild and start paying down. I am feeling great. lol. And as soon as I see my spreadsheets, Ill cry again.
QUOTE(Call Me Laura @ Apr 10 2008, 05:55 PM)
it's starting to sound like we grew up poor or something.
LOL. But it's how we need to live so we can pay down some of our debt....that's for sure.
Thanks for the sugg's, they really do help me a lot!!! I've never had to deal with commission pay, so I can't say I've been doing a good job, especially when he's short. Thankfully, he'll have a good month next month (can we say BUFFER!!!).
I've never done commission and it would probably scare the crap outta me. I've been tempted to try other jobs before, but I'll always have to work for someone so I have a consistent income. Just too stressful otherwise!
I did do something similar when I worked irregular overtime, though. However, it all went to snowballing (except the trip to Europe) because my current bills were covered by my salary and the extra really was extra.
Actually, I do like beans and rice, lol, but I put ham in mine. $1 for 8 bean soup mix, $2 for rice, $5 for some ham, and I could eat for a week. It's more the psychology of having the food there, in case you do need to make groceries stretch a few days until the next check. I've never unintentionally gone without food growing up, so I don't know where it comes from, but I usually have a store of things I might need. haha, I could probably go 6 months without having to buy shampoo...
Speaking of living cheaply, don't be afraid of coupons or shopping clearance. Once you take the price tags off, no one knows what you spent on something unless you tell them. And with clothing, generally the more expensive it starts out, the longer it lasts. It costs more, over the long run, buying clothing over and over because it wears out, plus it doesn't look as nice. And if you get it on sale, it's the same outlay as the discount version. Try Sierra Trading Post online for some awesome deals. (Just don't ask them how much I've end up spending there!)
I did do something similar when I worked irregular overtime, though. However, it all went to snowballing (except the trip to Europe) because my current bills were covered by my salary and the extra really was extra.
Actually, I do like beans and rice, lol, but I put ham in mine. $1 for 8 bean soup mix, $2 for rice, $5 for some ham, and I could eat for a week.
It's more the psychology of having the food there, in case you do need to make groceries stretch a few days until the next check. I've never unintentionally gone without food growing up, so I don't know where it comes from, but I usually have a store of things I might need. haha, I could probably go 6 months without having to buy shampoo...Speaking of living cheaply, don't be afraid of coupons or shopping clearance. Once you take the price tags off, no one knows what you spent on something unless you tell them. And with clothing, generally the more expensive it starts out, the longer it lasts. It costs more, over the long run, buying clothing over and over because it wears out, plus it doesn't look as nice. And if you get it on sale, it's the same outlay as the discount version. Try Sierra Trading Post online for some awesome deals. (Just don't ask them how much I've end up spending there!)
QUOTE(Jen23514 @ Apr 9 2008, 05:03 PM)
I work 100% commission, but have a pretty good idea of the "minimum" I will bring home a month. I've built up my base accounts to where I know my income RARELY drops below a certain level. So, what I do (not so well some months! LOL) is budget/plan off the minimum.
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
What that does is allow me to have some cushion. x=minimum I think I'll earn every month (I also get paid 1x/mo)
Here is how I do it. My direct deposit is divided 3 ways:
*15% of paycheck = savings account at ING (I keep this separate from my USAA accounts, out of sight, out of mind). Once that reaches x times 12, then I will divert that to investments.
* $600 goes into a USAA checking - personal spending, which i use for gas, groceries, morning coffee, target, eating out, etc
*net balance of paycheck = "bill pay" account at USAA - all of my bills are paid through USAA's bill pay system out of this account. It's automatically pulled for all bills on the 16th. whatever is leftover, I don't touch in case there is a month that I go under X. The only checks I write a month are to DDs school for tuition, lunches, and DDs after school program.
When this amount gets to twice the amount of X, I then apply it towards my snowball debt or other debt that I want to pay down. Whatever account is next on the list, that is what I apply it towards.
Now, I've actually paid off all my cards, so when it gets to 2 times X, I xfer it to either my fidelity account or UBS account for investment purposes.
Having twice the amount of X (in this case, your husbands base pay) in the checking account hedges against up/down months are prevents emergencies. Once you have that safety net in there, use his commission to pay down whatever is next on the list.
HTH~
Great strategy!
yes, I have 2 separate checking accounts at USAA. One is PURELY bill paying. The other is for discretionary spending, and gas and groceries fall under that.
I know it takes awhile to get 1 month of bills saved up as your buffer. That is MY buffer. Because i'm paid 1x a month and 100% commission, I do not feel comfortable having less than a months worth of expenses in that account (in addition to other savings). For you and your husband, $1,000 might be enough to decrease some of the stress I was sensing in your posts or $500 or 3 mos expenses
it's really a individual thing.
By separating the accounts then I don't accidently overspend if the gas company takes 2 weeks to cash the check, kwim?
Sounds like you are on the right track!
I know it takes awhile to get 1 month of bills saved up as your buffer. That is MY buffer. Because i'm paid 1x a month and 100% commission, I do not feel comfortable having less than a months worth of expenses in that account (in addition to other savings). For you and your husband, $1,000 might be enough to decrease some of the stress I was sensing in your posts or $500 or 3 mos expenses
it's really a individual thing. By separating the accounts then I don't accidently overspend if the gas company takes 2 weeks to cash the check, kwim?
Sounds like you are on the right track!
Again, thanks everyone. DH and I have talked a lot about this. He doesn't really want to open another joint checking, however, the fact remains, THE BILLS FALL IN MY LAP. And if another account will help me, he better sign on the dotted line. lol.
I think I'm going with the separate accounts. We just need to open another joint. it'll make life easier, and DH can check the balance and know "that's for spending" versus seeing 3,000 and thinking he can spend any of it, when in truth, we have $5 remaining cuz I'm waiting for things to clear. KWIM? lol.
My only dilemma now is....do we build a buffer, or take out from our savings to create a buffer? Mostly because time is of the essence......I am putting any "extra" to snowballing, instead of creating a buffer (that'd take a LONG time, and could pay off a couple of CC's).
I have a plan now, and that lowers my stress levels. Thanks again. This really has helped a lot. I love this board. lol.
I think I'm going with the separate accounts. We just need to open another joint. it'll make life easier, and DH can check the balance and know "that's for spending" versus seeing 3,000 and thinking he can spend any of it, when in truth, we have $5 remaining cuz I'm waiting for things to clear. KWIM? lol.
My only dilemma now is....do we build a buffer, or take out from our savings to create a buffer? Mostly because time is of the essence......I am putting any "extra" to snowballing, instead of creating a buffer (that'd take a LONG time, and could pay off a couple of CC's).
I have a plan now, and that lowers my stress levels. Thanks again. This really has helped a lot. I love this board. lol.
Waiting for Jen, the expert, to reply ....
But:
Why are you afraid to use the savings for the cushion?
Because you are afraid that that safety will be gone? (Yes, I understand that. But see it this way, your savings are replaced by another, better safety net, and you will rebuild that savings )
Or is it because you loose interest on your savings? - If this is the case, how much would overdraft fee & interest cost you? Probably much more than the interest you earn on your savings.
But:
Why are you afraid to use the savings for the cushion?
Because you are afraid that that safety will be gone? (Yes, I understand that. But see it this way, your savings are replaced by another, better safety net, and you will rebuild that savings
)Or is it because you loose interest on your savings? - If this is the case, how much would overdraft fee & interest cost you? Probably much more than the interest you earn on your savings.
Something that caught my eye ...
QUOTE
and DH can check the balance and know "that's for spending" versus seeing 3,000 and thinking he can spend any of it, when in truth, we have $5 remaining cuz I'm waiting for things to clear.
QUOTE(vampireluck7 @ Apr 15 2008, 11:37 AM)
Waiting for Jen, the expert, to reply ....
But:
Why are you afraid to use the savings for the cushion?
Because you are afraid that that safety will be gone? (Yes, I understand that. But see it this way, your savings are replaced by another, better safety net, and you will rebuild that savings )
Or is it because you loose interest on your savings? - If this is the case, how much would overdraft fee & interest cost you? Probably much more than the interest you earn on your savings.
But:
Why are you afraid to use the savings for the cushion?
Because you are afraid that that safety will be gone? (Yes, I understand that. But see it this way, your savings are replaced by another, better safety net, and you will rebuild that savings
)Or is it because you loose interest on your savings? - If this is the case, how much would overdraft fee & interest cost you? Probably much more than the interest you earn on your savings.
Good questions. Actually, the answer is NEITHER.
It's because I'm afraid we'll lose it...and lose our "reserves" for when we refi the house (within a year). We need that cash reserves in case we need to pay any out of pocket expenses for the refi. and I'd hate to have to charge it, KWIM? Hence, I'm worried we'll dip too much into our savings, and realize too late that our reserves are VERY low. Hope that made some sense. Due to the refi, we're working to lower our DTI, versus actually doing this in a "smart" way, we're going about it "backwards". It's so strange. We have to do strange things that go against every thing I have learned....but if it lowers our DTI to help with the refi, I will do it. Hence, keeping the savings separate, so we don't touch it.
Ouch, our "savings" are earmarked - they are not a cushion! 
QUOTE(vampireluck7 @ Apr 15 2008, 11:41 AM)
Something that caught my eye ...
QUOTE
and DH can check the balance and know "that's for spending" versus seeing 3,000 and thinking he can spend any of it, when in truth, we have $5 remaining cuz I'm waiting for things to clear.
What about it caught your eye?
QUOTE(vampireluck7 @ Apr 15 2008, 12:52 PM)
Ouch, our "savings" are earmarked - they are not a cushion!
so is most of ours. Another reason I don't want to dip too much into specific areas of my monies. kwim?
QUOTE(k9kreationz @ Apr 15 2008, 05:22 PM)
QUOTE(vampireluck7 @ Apr 15 2008, 11:41 AM)
Something that caught my eye ...
QUOTE
and DH can check the balance and know "that's for spending" versus seeing 3,000 and thinking he can spend any of it, when in truth, we have $5 remaining cuz I'm waiting for things to clear.
What about it caught your eye?
It sounds like your DH is not with you on your quest.
QUOTE(k9kreationz @ Apr 15 2008, 05:24 PM)
QUOTE(vampireluck7 @ Apr 15 2008, 12:52 PM)
Ouch, our "savings" are earmarked - they are not a cushion!
so is most of ours. Another reason I don't want to dip too much into specific areas of my monies. kwim?
Yes, I very much understand you.
I wanted to say "your savings", it was a Freudian
too funnyQUOTE
Unfortunately, we've been dipping WAY too much into our "buffer" over the past 3-6 months. So our regular one is all but gone. Time to move things around, rebuild and start paying down. I am feeling great. lol. And as soon as I see my spreadsheets, Ill cry again.
No, don't cry! You are working on this! And you are fixing this! You will get a hand on this
I am sure What I am starting to think is that you recently had some financial hardship (DH changed job?).
And that your current income is less than the old income was.
IMHO, this means you either have to cut expenses or increase income.
But, as I said, you are taking charge of this
WTG!
QUOTE(vampireluck7 @ Apr 15 2008, 01:37 PM)
Waiting for Jen, the expert, to reply ....
QUOTE(k9kreationz @ Apr 15 2008, 12:09 PM)
My only dilemma now is....do we build a buffer, or take out from our savings to create a buffer? Mostly because time is of the essence......I am putting any "extra" to snowballing, instead of creating a buffer (that'd take a LONG time, and could pay off a couple of CC's).
if he doesn't want to open the account, ask him what better alternative he has?
personally, I would put a one month buffer in there THEN use remaining $ to snowball the debt.
The reason? One bad commission check could really derail your plans (ask me how I know
)You need to get him on board. Figure out if you keep up your current contributions he'll be XX years old when the CCs are paid off. When my BIL showed my sister that, they made some radical changes. They moved from Charlotte to Chapel Hill for a new job, bought a smaller and cheaper home, and tweaked a few other things. They are now paying off their home 2x as fast. Not everyone can make that radical of a change, but you can get radical in your own way.
When I had variable income, I put surplus over my average into savings so that in down months I could make the same payments -- saved my sanity. Not sure if this would work, and it definitely wouldn't get the debt paid off quite as quickly, but if it's easier to work with mentally....
I also like having some savings buffer, no matter how small.
I also like having some savings buffer, no matter how small.
QUOTE(Jen23514 @ Apr 17 2008, 09:04 AM)
if he doesn't want to open the account, ask him what better alternative he has?
personally, I would put a one month buffer in there THEN use remaining $ to snowball the debt.
The reason? One bad commission check could really derail your plans (ask me how I know )
You need to get him on board. Figure out if you keep up your current contributions he'll be XX years old when the CCs are paid off. When my BIL showed my sister that, they made some radical changes. They moved from Charlotte to Chapel Hill for a new job, bought a smaller and cheaper home, and tweaked a few other things. They are now paying off their home 2x as fast. Not everyone can make that radical of a change, but you can get radical in your own way.
personally, I would put a one month buffer in there THEN use remaining $ to snowball the debt.
The reason? One bad commission check could really derail your plans (ask me how I know
)You need to get him on board. Figure out if you keep up your current contributions he'll be XX years old when the CCs are paid off. When my BIL showed my sister that, they made some radical changes. They moved from Charlotte to Chapel Hill for a new job, bought a smaller and cheaper home, and tweaked a few other things. They are now paying off their home 2x as fast. Not everyone can make that radical of a change, but you can get radical in your own way.
Sigh. Oh trust me, we know all about a "bad" commission check. DH is supposed to pay back 90% of his upcoming paycheck, because he had 4 deals go bad. Imagine getting only 10% of what you thought you'd be getting. I hate his job.
Unfortunately, it'd probably take us a VERY long time to build a buffer of one month. I know that sounds crazy, but if you knew how much we paid every month in bills, you'd understand. Building one month buffer can pay down a LOT of debt.
I wish we could radically move. Heck, we even though about selling our home. Too bad home prices are WAY down. We couldn't sell for any sort of profit (or break even) right now. That part sucks. ugh.
We did open a second checking. I basically told DH this is what *I* needed to be able to figure out our monies. We should be receive our debit cards soon, or next week. Then I can start moving things around the way we need too.
Too bad we're already off to a bad start with DH losing 90% of his upcoming paycheck. Ouch!
QUOTE(vampireluck7 @ Apr 16 2008, 01:03 PM)
No, don't cry! You are working on this! And you are fixing this! You will get a hand on this I am sure
I am sure thanks. QUOTE(vampireluck7 @ Apr 16 2008, 01:03 PM)
What I am starting to think is that you recently had some financial hardship (DH changed job?).
And that your current income is less than the old income was.
IMHO, this means you either have to cut expenses or increase income.
But, as I said, you are taking charge of this
WTG!
And that your current income is less than the old income was.
IMHO, this means you either have to cut expenses or increase income.
But, as I said, you are taking charge of this
WTG!
Sadly, we have nothing to blame except the fact that DH didn't make as much money as he did last year. The way he was going for the first 3 months of this year, he would've made about 40k less than last year. That's a chunk of money. Especially when he should be making MORE. My income is stable and slowing going up. The hardship was definitely DH not doing so hot from about late Oct to recently. Poor guy. It's kinda all on him, but then again, that's the job he chose and actually likes.
HI K9:
Sorry to jump into this thread late. I have been working for myself for the last 8 years. (translation: 100% commission). I had the same problems when i started that you are having. To make it worse, I was working on fairly large projects, so i could go a couple months with nothing, then I'd get a check for 20K and by that time i was so far behind that it went very quickly.
I never snowballed because, well, quite frankly, I was too much of a mess.
A couple years ago i found a system that works much better for me. I am not sure if you saw it. I posted it here for taco_truck: http://creditboards.com/forums/index.php?s...75&start=75
Basically, instead of trying to manage your budget with hard numbers/envelopes, you do it with percentages. Once you have paid your basic necessities, you divide the rest up into 5-7 other buckets (or how ever many work for you.)
You can see more detail in the other posting, but in your case, I would probably do something like this:
Bucket 1: Basic Necessities (mortgage, basic food, electric, water etc) This should be a fairly set number every month.
Bucket 2: If you have a lot of debt, I would add a "debt minimums' bucket. This should be what you must pay on your cc's & other debts every month to avoid problems.
I would pay 100% of bucket 1 then 100% of bucket 2. Then take the rest of the check and divide it up among the other buckets.
They might be:
Bucket 3: snowball 15% (or make this higher if you need to be more aggressive - remember, you have already paid your basic necessities before putting any money toward snowball, so if you are in a situation where you really need to sacrifice, you can go pretty high)
Bucket 4: savings for next month: 15% - this is a good way to work yourself up to the buffer that everyone else suggested.
Bucket 5: short-term savings 10%
Bucket 6: long-term savings 10%
Bucket 7: Household expenses 15%
Bucket 7: DH Discretionary 10%
Bucket 7: DW Discretionary 10%
Bucket 8: Play money 10%
Bucket 9: Vacation Fund 5%
(note: short-term, obviously you won't be funding a vacation, and play money might be 1%, just something token to keep you sane. I just wanted to show that a bucket can be a general category or something really specific - a known upcoming expense etc)
Again, the number of buckets and percentages should be whatever they need to be. In the first few months, you will find yourself having to adjust things and 'borrow' from other buckets.
Also, I do this with every check i get, no matter how big or small. Even if i just sell something on ebay lol. I put $5 in each bucket. But it does feel like an accomplishment and more importantly, after a few months, it does start to feel balanced.
Some buckets you will spend completely every month, some you will carry balances forward (once you get back on your post-bad-commission feet )
I have a hard time when i start to get too granular with my budget, so it is easier for me to have really large ones. You could easily do more. Really though, since the basics are paid before you begin, it should limit the need to borrow. Either you have play money or you don't. Also, at least if you run short one month, you have already been building toward covering and you may have leftover money in the vacation fund, etc that you can grab in a pinch.
Hope you find this helpful. It has certainly made me a more sane person!
Sorry to jump into this thread late.
I have been working for myself for the last 8 years. (translation: 100% commission). I had the same problems when i started that you are having. To make it worse, I was working on fairly large projects, so i could go a couple months with nothing, then I'd get a check for 20K and by that time i was so far behind that it went very quickly.I never snowballed because, well, quite frankly, I was too much of a mess
.A couple years ago i found a system that works much better for me. I am not sure if you saw it. I posted it here for taco_truck: http://creditboards.com/forums/index.php?s...75&start=75
Basically, instead of trying to manage your budget with hard numbers/envelopes, you do it with percentages. Once you have paid your basic necessities, you divide the rest up into 5-7 other buckets (or how ever many work for you.)
You can see more detail in the other posting, but in your case, I would probably do something like this:
Bucket 1: Basic Necessities (mortgage, basic food, electric, water etc) This should be a fairly set number every month.
Bucket 2: If you have a lot of debt, I would add a "debt minimums' bucket. This should be what you must pay on your cc's & other debts every month to avoid problems.
I would pay 100% of bucket 1 then 100% of bucket 2. Then take the rest of the check and divide it up among the other buckets.
They might be:
Bucket 3: snowball 15% (or make this higher if you need to be more aggressive - remember, you have already paid your basic necessities before putting any money toward snowball, so if you are in a situation where you really need to sacrifice, you can go pretty high)
Bucket 4: savings for next month: 15% - this is a good way to work yourself up to the buffer that everyone else suggested.
Bucket 5: short-term savings 10%
Bucket 6: long-term savings 10%
Bucket 7: Household expenses 15%
Bucket 7: DH Discretionary 10%
Bucket 7: DW Discretionary 10%
Bucket 8: Play money 10%
Bucket 9: Vacation Fund 5%
(note: short-term, obviously you won't be funding a vacation, and play money might be 1%, just something token to keep you sane. I just wanted to show that a bucket can be a general category or something really specific - a known upcoming expense etc)
Again, the number of buckets and percentages should be whatever they need to be. In the first few months, you will find yourself having to adjust things and 'borrow' from other buckets.
Also, I do this with every check i get, no matter how big or small. Even if i just sell something on ebay lol. I put $5 in each bucket. But it does feel like an accomplishment and more importantly, after a few months, it does start to feel balanced.
Some buckets you will spend completely every month, some you will carry balances forward (once you get back on your post-bad-commission feet
)I have a hard time when i start to get too granular with my budget, so it is easier for me to have really large ones. You could easily do more. Really though, since the basics are paid before you begin, it should limit the need to borrow. Either you have play money or you don't. Also, at least if you run short one month, you have already been building toward covering and you may have leftover money in the vacation fund, etc that you can grab in a pinch.
Hope you find this helpful. It has certainly made me a more sane person!
QUOTE
40k less than last year
k9kreationz, that's a steep cut! No wonder you are having a hard time!
powers64,
That's an interesting approach to a budget!
I understood it completely only reading it the second time, now here on this thread.
The key part that I had missed in the other thread was that you allot a certain PERCENTAGE of your paycheck to each spending group.
A different approach, indeed!
QUOTE
The key part that I had missed in the other thread was that you allot a certain PERCENTAGE of your paycheck to each spending group.
Sorry if it was confusing. Yes. The hardest thing when you underearn some months and overearn other months is to have hard/fixed numbers in your budget.
The reason that i think this plan works well for me, is becuase I just divide up whatever I have in-hand. It works weather you have $500 or $5000 left after paying your basic bills.
So, to piggyback on Jenn & Laura's suggestions, OP has her bill-paying account. When she or DH get their paychecks, this account should be used to fully pay everything in bucket 1/bucket 2. Then, they just take the remaining $$ and divide it up (15% snowball, 15% building a buffer etc)
QUOTE
I am putting any "extra" to snowballing, instead of creating a buffer (that'd take a LONG time, and could pay off a couple of CC's).
My answer is do a little of both every time you have extra money. If you get $1200 tax stimulus, break it up based on the % of each bucket, which might mean, send an extra $250 to snowball, put $250 toward next months buffer, $150 toward short-term emergency fund; $100 toward DH descretionary etc.
For me, there was a part of the equation that is harder for those who have had steady income to imagine. There is a rollercoaster that starts. If you are strapped for several months (in OP's case, going on 6 months), you are not doing some basic things like maintaining your car/house/health etc. My experience, is that the high debt i incurred, was really when these things rose to the level of emergency, ie 'brakes went out in the car' etc.
The tendency then when money comes in, like say for example they get a $1200 tax stimulus, is to take an 'all or nothing approach'. Either, 'lets snowball the whole amount' or "we're in panic mode because we know we need new brakes for the car in the next few months, lets just get brakes"
Instead, I think that it is really important to restore a balanced approach. Every amount of money gets split based on the percentages, so that you, in time, aren't delaying things that are going to come back to bite you later. Otherwise, you will end-up having to incur more debt later to cover the brakes when they just go out.
It also works really well when you get a large lump sum windfall. You have a framework for saving, snowballing etc. And you can catch your breath on household/personal expenses as well.
Having said all that, it sounds like OP is really feeling the crunch. For the short-term, she might need to snowball 35-40% of extra, put 35-40% toward buffer, then split the remaining 20% among the other buckets. But I really really feel adding at least a token amount of money in the other buckets, helped me restore sanity/balace to my life.
oh..one more thing...
I really like this too. I added the idea to my own savings/buffer buckets. However, the one place i wouldn't let money build is in the snowball. If you have an extra $50 there, I would just send it. If your balances are high, it could take a while to save enough to cover the whole balance. Every $$ you send helps and starts to cut down on the balance/interest.
QUOTE
Although, I do like the way you did that. Allow X to build and build and when it becomes 2X then pay off a chunk to the snowball chart. I'm assuming, until it becomes 2X, you're still paying minimum payments? Is that right?
I really like this too. I added the idea to my own savings/buffer buckets. However, the one place i wouldn't let money build is in the snowball. If you have an extra $50 there, I would just send it. If your balances are high, it could take a while to save enough to cover the whole balance. Every $$ you send helps and starts to cut down on the balance/interest.
QUOTE(powers64 @ Apr 24 2008, 07:28 PM)
HI K9:
Sorry to jump into this thread late. I have been working for myself for the last 8 years. (translation: 100% commission). I had the same problems when i started that you are having. To make it worse, I was working on fairly large projects, so i could go a couple months with nothing, then I'd get a check for 20K and by that time i was so far behind that it went very quickly.
I never snowballed because, well, quite frankly, I was too much of a mess.
A couple years ago i found a system that works much better for me. I am not sure if you saw it. I posted it here for taco_truck: http://creditboards.com/forums/index.php?s...75&start=75
Basically, instead of trying to manage your budget with hard numbers/envelopes, you do it with percentages. Once you have paid your basic necessities, you divide the rest up into 5-7 other buckets (or how ever many work for you.)
You can see more detail in the other posting, but in your case, I would probably do something like this:
Bucket 1: Basic Necessities (mortgage, basic food, electric, water etc) This should be a fairly set number every month.
Bucket 2: If you have a lot of debt, I would add a "debt minimums' bucket. This should be what you must pay on your cc's & other debts every month to avoid problems.
I would pay 100% of bucket 1 then 100% of bucket 2. Then take the rest of the check and divide it up among the other buckets.
They might be:
Bucket 3: snowball 15% (or make this higher if you need to be more aggressive - remember, you have already paid your basic necessities before putting any money toward snowball, so if you are in a situation where you really need to sacrifice, you can go pretty high)
Bucket 4: savings for next month: 15% - this is a good way to work yourself up to the buffer that everyone else suggested.
Bucket 5: short-term savings 10%
Bucket 6: long-term savings 10%
Bucket 7: Household expenses 15%
Bucket 7: DH Discretionary 10%
Bucket 7: DW Discretionary 10%
Bucket 8: Play money 10%
Bucket 9: Vacation Fund 5%
(note: short-term, obviously you won't be funding a vacation, and play money might be 1%, just something token to keep you sane. I just wanted to show that a bucket can be a general category or something really specific - a known upcoming expense etc)
Again, the number of buckets and percentages should be whatever they need to be. In the first few months, you will find yourself having to adjust things and 'borrow' from other buckets.
Also, I do this with every check i get, no matter how big or small. Even if i just sell something on ebay lol. I put $5 in each bucket. But it does feel like an accomplishment and more importantly, after a few months, it does start to feel balanced.
Some buckets you will spend completely every month, some you will carry balances forward (once you get back on your post-bad-commission feet )
I have a hard time when i start to get too granular with my budget, so it is easier for me to have really large ones. You could easily do more. Really though, since the basics are paid before you begin, it should limit the need to borrow. Either you have play money or you don't. Also, at least if you run short one month, you have already been building toward covering and you may have leftover money in the vacation fund, etc that you can grab in a pinch.
Hope you find this helpful. It has certainly made me a more sane person!
Sorry to jump into this thread late.
I have been working for myself for the last 8 years. (translation: 100% commission). I had the same problems when i started that you are having. To make it worse, I was working on fairly large projects, so i could go a couple months with nothing, then I'd get a check for 20K and by that time i was so far behind that it went very quickly.I never snowballed because, well, quite frankly, I was too much of a mess
.A couple years ago i found a system that works much better for me. I am not sure if you saw it. I posted it here for taco_truck: http://creditboards.com/forums/index.php?s...75&start=75
Basically, instead of trying to manage your budget with hard numbers/envelopes, you do it with percentages. Once you have paid your basic necessities, you divide the rest up into 5-7 other buckets (or how ever many work for you.)
You can see more detail in the other posting, but in your case, I would probably do something like this:
Bucket 1: Basic Necessities (mortgage, basic food, electric, water etc) This should be a fairly set number every month.
Bucket 2: If you have a lot of debt, I would add a "debt minimums' bucket. This should be what you must pay on your cc's & other debts every month to avoid problems.
I would pay 100% of bucket 1 then 100% of bucket 2. Then take the rest of the check and divide it up among the other buckets.
They might be:
Bucket 3: snowball 15% (or make this higher if you need to be more aggressive - remember, you have already paid your basic necessities before putting any money toward snowball, so if you are in a situation where you really need to sacrifice, you can go pretty high)
Bucket 4: savings for next month: 15% - this is a good way to work yourself up to the buffer that everyone else suggested.
Bucket 5: short-term savings 10%
Bucket 6: long-term savings 10%
Bucket 7: Household expenses 15%
Bucket 7: DH Discretionary 10%
Bucket 7: DW Discretionary 10%
Bucket 8: Play money 10%
Bucket 9: Vacation Fund 5%
(note: short-term, obviously you won't be funding a vacation, and play money might be 1%, just something token to keep you sane. I just wanted to show that a bucket can be a general category or something really specific - a known upcoming expense etc)
Again, the number of buckets and percentages should be whatever they need to be. In the first few months, you will find yourself having to adjust things and 'borrow' from other buckets.
Also, I do this with every check i get, no matter how big or small. Even if i just sell something on ebay lol. I put $5 in each bucket. But it does feel like an accomplishment and more importantly, after a few months, it does start to feel balanced.
Some buckets you will spend completely every month, some you will carry balances forward (once you get back on your post-bad-commission feet
)I have a hard time when i start to get too granular with my budget, so it is easier for me to have really large ones. You could easily do more. Really though, since the basics are paid before you begin, it should limit the need to borrow. Either you have play money or you don't. Also, at least if you run short one month, you have already been building toward covering and you may have leftover money in the vacation fund, etc that you can grab in a pinch.
Hope you find this helpful. It has certainly made me a more sane person!
Regardless of the fact that I'm horrible with percentages (math-wise), lol, it actually sounds good. Why? Because, DH's pay is never the same. I am liking the idea of % amount for this or that.
I will read the link you sent me. Thanks.
Now, curious, how did you keep all you buckets separately? Did you just put all the money into one account, but keep a spreadsheet of what is where? Did you use envelopes and keep cash aroudn the house? How'd you do that part?
QUOTE
The tendency then when money comes in, like say for example they get a $1200 tax stimulus, is to take an 'all or nothing approach'. Either, 'lets snowball the whole amount' or "we're in panic mode because we know we need new brakes for the car in the next few months, lets just get brakes"
Instead, I think that it is really important to restore a balanced approach. Every amount of money gets split based on the percentages, so that you, in time, aren't delaying things that are going to come back to bite you later. Otherwise, you will end-up having to incur more debt later to cover the brakes when they just go out.
Instead, I think that it is really important to restore a balanced approach. Every amount of money gets split based on the percentages, so that you, in time, aren't delaying things that are going to come back to bite you later. Otherwise, you will end-up having to incur more debt later to cover the brakes when they just go out.
Ohmigod. That's exactly how I feel. Like, I need to dump this big sum into this or that. I think you've hit the nail on the head with what I'm going through right now. And please understand, I have NEVER lived off of commission before (we got married May 06), so this is all new to me. I have always been paid X amount. and I know where it all goes for me. And how to budget that way. Sheesh. DH has always had a very large buffer, but then, before we got married, he had very little expenses.
QUOTE
Having said all that, it sounds like OP is really feeling the crunch. For the short-term, she might need to snowball 35-40% of extra, put 35-40% toward buffer, then split the remaining 20% among the other buckets. But I really really feel adding at least a token amount of money in the other buckets, helped me restore sanity/balace to my life.
I wanted to thank you for this. I am definitely going to incorporate all of it. Yes, we need some spending money, but yup, knowing me, I would've put it all towards our bills. Thanks for showing me how to BALANCe things. I think that's what I needed the most. The ladies gave me a way to balance things out, you gave me the mental part of it.
To help me keep my sanity. Now, to figure out the %'s. I think this will work wonders for me.
HI K9:
I am so glad my stuff made sense! I am hopeful it will work as well for you as it did for me.
The real key to making it work (and ending the rollercoaster) is to make sure that you do it when you get a huge check. When you have been living below you means for a while, a huge check, believe it or not, is almost as scary as one that is too small. You still have a lot of things to pay and you know you should stick some of it away, but at the same time you are so relieved all you really want to do is buy a plane ticket to hawaii and hit the beach If you stick to the plan, it will help you get ahead on everything and leave you some extra to play.
For a long time, i went cold hard cash on everything. I kept envelopes/cash in my house. (note: i live in a very secure building. I don't know if i would have done this in one of my houses. Maybe a safe deposit box) i just pulled it all out of my account, then deposited it back in at the end of the month when my bills were due. I also had (until recently) an American Gift Cheque Card (it was a prepaid, re-loadable Amex) it was great. I used it for all my regular expenses (coffee, gas, groceries etc). unfortunately, Amex discontinued issuing those cards and cancelled the program. I'm looking for another one because it made it really easy to stick to my budget and i had a full accounting of exactly where all of the money went.
I also never really had accruing accounts. I just took whatever i had in each envelope at the end of the month and sent it. When i was in deep, i had several loans from friends and family that were seriously delinquent, but creditors on my tail, the F&F kept falling by the wayside. That was one of the main reason i started doing things this way. Each of my F&F had an envelope (some were like 2% of each check), but if there was $10 or $20 or whatever, i would just send them whatever was there at then end of the month. I know they all really appreciated knowing that i hadn't just blown them off and every once in a while they were happy to find a bigger amount in the mail. I don't think i would have ever gotten them all paid if i hadn't done it that way. The amounts on their own were just too large and i was so spread thin that if i had tried to accrue the money to a certain point, i would have definitely "borrowed from their envelopes" & grabbed that money to pay something else.
Keep us posted on how you are doing! It sounds like you are on your way!
I am so glad my stuff made sense! I am hopeful it will work as well for you as it did for me.
The real key to making it work (and ending the rollercoaster) is to make sure that you do it when you get a huge check. When you have been living below you means for a while, a huge check, believe it or not, is almost as scary as one that is too small. You still have a lot of things to pay and you know you should stick some of it away, but at the same time you are so relieved all you really want to do is buy a plane ticket to hawaii and hit the beach
If you stick to the plan, it will help you get ahead on everything and leave you some extra to play.QUOTE
Now, curious, how did you keep all you buckets separately? Did you just put all the money into one account, but keep a spreadsheet of what is where? Did you use envelopes and keep cash aroudn the house? How'd you do that part?
For a long time, i went cold hard cash on everything. I kept envelopes/cash in my house. (note: i live in a very secure building. I don't know if i would have done this in one of my houses. Maybe a safe deposit box) i just pulled it all out of my account, then deposited it back in at the end of the month when my bills were due. I also had (until recently) an American Gift Cheque Card (it was a prepaid, re-loadable Amex) it was great. I used it for all my regular expenses (coffee, gas, groceries etc). unfortunately, Amex discontinued issuing those cards and cancelled the program. I'm looking for another one because it made it really easy to stick to my budget and i had a full accounting of exactly where all of the money went.
I also never really had accruing accounts. I just took whatever i had in each envelope at the end of the month and sent it. When i was in deep, i had several loans from friends and family that were seriously delinquent, but creditors on my tail, the F&F kept falling by the wayside. That was one of the main reason i started doing things this way. Each of my F&F had an envelope (some were like 2% of each check), but if there was $10 or $20 or whatever, i would just send them whatever was there at then end of the month. I know they all really appreciated knowing that i hadn't just blown them off and every once in a while they were happy to find a bigger amount in the mail. I don't think i would have ever gotten them all paid if i hadn't done it that way. The amounts on their own were just too large and i was so spread thin that if i had tried to accrue the money to a certain point, i would have definitely "borrowed from their envelopes" & grabbed that money to pay something else.
Keep us posted on how you are doing! It sounds like you are on your way!
QUOTE(powers64 @ Apr 30 2008, 07:48 AM)
but at the same time you are so relieved all you really want to do is buy a plane ticket to hawaii and hit the beach
Just to laugh at something. My family is from there and we're having a family reunion there next year. So, I went to check airfare. Um, $800 from LAX to HNL. NUTS!!! The most I have ever spent on a ticket there was about $450. So, definitely will NOT be buying a ticket to Hawaii anytime soon. hehehe.
Thanks again. I never once thought to use percentages. I think it'll help me a lot. I'm creating our "budget" for May. So far, so good. Kinda scary, but at the same time, it feels good knowing I'll have money in each bucket. Even if it's $5.
check back in and let us know how it works for you! (now all i can think about is a beach in hawaii!)
Have you tried searching Kayak.com? They search all of the airline sites and cheap ticket sites. You can sign up for notifications when tickets hit a certain price.
Have you tried searching Kayak.com? They search all of the airline sites and cheap ticket sites. You can sign up for notifications when tickets hit a certain price.
QUOTE(powers64 @ Apr 30 2008, 09:48 AM)
For a long time, i went cold hard cash on everything. I kept envelopes/cash in my house.
the envelope system has saved my arse MANY times.
The first time I used it to get back onto track, and that was about 4 years ago.
Now, anytime my budget gets out of whack, I go back to it. After about 3 mos of the envelope system, things are usually in order.
You don't know how hard discipline can be until you start living that way!
QUOTE(Jen23514 @ Apr 30 2008, 10:06 AM)
QUOTE(powers64 @ Apr 30 2008, 09:48 AM)
For a long time, i went cold hard cash on everything. I kept envelopes/cash in my house.
the envelope system has saved my arse MANY times.
The first time I used it to get back onto track, and that was about 4 years ago.
Now, anytime my budget gets out of whack, I go back to it. After about 3 mos of the envelope system, things are usually in order.
You don't know how hard discipline can be until you start living that way!
Oh so true. And how hard it is NOT to take money from the envelopes.
Okay. I'm coming across yet another problem. I thought I'd post here since it's all the same issue. lol
I got my buckets/percentages. Here's my current issue......DH and I get paid 4 times a month combined. How do I figure out what goes in the buckets DURING the month? Or does the extra go in the buckets at the end of the month. Cuz otherwise, 1, we have no "extra" for this first month and 2. I'm still "estimating" his paychecks and guessing. I don't want to guess anymore. This last week has been BAD! We estimated, had some extra costs and spent $1,000 of our "buffer/savings" to COA.
I'm basically figuring out when to pay what for next month, with the new system and hit a brick wall. After Dh's first check, we'll have a big surplus, BUT, that money needs to carry over to pay bills later. I guess. I could figure out what I need minimum for that paycheck, and extra goes to the buckets?
I think the problem is, typically one of DH's checks is large, the other small. Ugh. So, sometimes, his first check, needs to carry over to his second check to make the bills...all the while, mine is in there too paying this and that.
Did I lose you yet?
Help.
I got my buckets/percentages. Here's my current issue......DH and I get paid 4 times a month combined. How do I figure out what goes in the buckets DURING the month? Or does the extra go in the buckets at the end of the month. Cuz otherwise, 1, we have no "extra" for this first month and 2. I'm still "estimating" his paychecks and guessing. I don't want to guess anymore. This last week has been BAD! We estimated, had some extra costs and spent $1,000 of our "buffer/savings" to COA.
I'm basically figuring out when to pay what for next month, with the new system and hit a brick wall. After Dh's first check, we'll have a big surplus, BUT, that money needs to carry over to pay bills later. I guess. I could figure out what I need minimum for that paycheck, and extra goes to the buckets?
I think the problem is, typically one of DH's checks is large, the other small. Ugh. So, sometimes, his first check, needs to carry over to his second check to make the bills...all the while, mine is in there too paying this and that.
Did I lose you yet?
Help.
I don't understand..... if the first paycheck is large, are you spending it all before you know what the next one will be?
QUOTE(Jen23514 @ Apr 30 2008, 12:58 PM)
I don't understand..... if the first paycheck is large, are you spending it all before you know what the next one will be?
When I first set up my payment schedule, that's almost what it turned out to be. I was about to bucket the leftovers, until I realized I needed money to cover for later in the month.
So, I'm not doing it right now, thankfully, but had I done it this coming month, ooo, that could've been bad. Hence my worry/question.
Does that help clear it up?
So, can you give us an idea of what your buckets/checks look like?
Especially bucket #1. Also, do you have a bucket number 2 for credit card minimums or did you just roll those into bucket 1?
If your monthly fixed/necessities (bucket 1) are $2500 and the first paycheck is $1000, then the whole thing goes into bucket 1. If the first paycheck is 2600, then you have 100 leftover.
So, it shouldn't matter if the items in #1 are due now or later, you don't have any extra to roll until you have filled that bucket 100%
Does that make sense? Is that the issue or did i miss it?
If you can give us your buckets and some ballpark $$ amounts of what those checks (good/bad/ugly) might look like, that would be helpful
Especially bucket #1. Also, do you have a bucket number 2 for credit card minimums or did you just roll those into bucket 1?
If your monthly fixed/necessities (bucket 1) are $2500 and the first paycheck is $1000, then the whole thing goes into bucket 1. If the first paycheck is 2600, then you have 100 leftover.
So, it shouldn't matter if the items in #1 are due now or later, you don't have any extra to roll until you have filled that bucket 100%
Does that make sense? Is that the issue or did i miss it?
If you can give us your buckets and some ballpark $$ amounts of what those checks (good/bad/ugly) might look like, that would be helpful
QUOTE(powers64 @ Apr 30 2008, 01:20 PM)
So, can you give us an idea of what your buckets/checks look like?
Especially bucket #1. Also, do you have a bucket number 2 for credit card minimums or did you just roll those into bucket 1?
If your monthly fixed/necessities (bucket 1) are $2500 and the first paycheck is $1000, then the whole thing goes into bucket 1. If the first paycheck is 2600, then you have 100 leftover.
So, it shouldn't matter if the items in #1 are due now or later, you don't have any extra to roll until you have filled that bucket 100%
Does that make sense? Is that the issue or did i miss it?
If you can give us your buckets and some ballpark $$ amounts of what those checks (good/bad/ugly) might look like, that would be helpful
Especially bucket #1. Also, do you have a bucket number 2 for credit card minimums or did you just roll those into bucket 1?
If your monthly fixed/necessities (bucket 1) are $2500 and the first paycheck is $1000, then the whole thing goes into bucket 1. If the first paycheck is 2600, then you have 100 leftover.
So, it shouldn't matter if the items in #1 are due now or later, you don't have any extra to roll until you have filled that bucket 100%
Does that make sense? Is that the issue or did i miss it?
If you can give us your buckets and some ballpark $$ amounts of what those checks (good/bad/ugly) might look like, that would be helpful
Makes sense. Here's some numbers. I didn't really want to post, but i figure, if you guys can help me, here goes.
Numbers are rounded for ease of use.
Bucket #1: 7000
Bucket #2: 1300
Bucket #3: 45% snowball
Bucket #4: 25% buffer/savings
Bucket #5: 15% Play money
Bucket #6: 15% House stuff (anything here, like repairs or what not)
DH's first check this month is going to be 3600. I make 1400.
Second check, unsure, but I'm assuming 2000. I again, will make 1400. (I'm waiting on DH to give me an estimate for the second check)
So, if I'm reading what you're saying right. We basically don't use/have any "extra" until we get buckets 1 and 2 completely paid off. Which means, for us, waiting until the end of the month. Is that right?
QUOTE
So, if I'm reading what you're saying right. We basically don't use/have any "extra" until we get buckets 1 and 2 completely paid off. Which means, for us, waiting until the end of the month. Is that right?
Exactly. I looks like you are just breaking even on your basic necessities. Is that 7K really just the bare minimum? Basic groceries? (no restaurants, movies, anything else)?
It really should just be what is absolutely necessary to keep the lights on. Nothing extra.
Part of what makes this hard in the beginning when you are tight on cash, is the cash flow. If most of that 7K is due in the beginning of the month, it is hard. The first or second month, you might need to hold back a little on the snowball, just to get enough into buffer/savings to keep things at least running smoothly.
QUOTE(powers64 @ Apr 30 2008, 02:13 PM)
Exactly. I looks like you are just breaking even on your basic necessities. Is that 7K really just the bare minimum? Basic groceries? (no restaurants, movies, anything else)?
It really should just be what is absolutely necessary to keep the lights on. Nothing extra.
Part of what makes this hard in the beginning when you are tight on cash, is the cash flow. If most of that 7K is due in the beginning of the month, it is hard. The first or second month, you might need to hold back a little on the snowball, just to get enough into buffer/savings to keep things at least running smoothly.
It really should just be what is absolutely necessary to keep the lights on. Nothing extra.
Part of what makes this hard in the beginning when you are tight on cash, is the cash flow. If most of that 7K is due in the beginning of the month, it is hard. The first or second month, you might need to hold back a little on the snowball, just to get enough into buffer/savings to keep things at least running smoothly.
Yup. That's the minimum. Scary, huh? Yeah, now you can see why we got so under when DH doesn't make money. Unfortunately, he has to make a minimum of, what, about $5500/mo and sadly, it's been a lot less these past few months. Granted, if he makes what he was making last year, we can do a lot more than "break even".
We have areas we can cut back on, but it's a balance. DH has a happy home life, he's more willing to work harder at work. DH has a miserable home life, he's miserable at work and doesn't work hard. See the catch 22? lol. So, I try to keep DH happy with things like The Golf Channel. Heck, we haven't went golfing in about 3 months, so for us, that's a HUGE sacrifice. But a good money saver.
Thanks. I think I will have to tell DH about this. It's not going to be easy not having any "extra" cash until May 21st. Yikes.
Hang in there! It wasn't going to be easy anyhow
At least now you have a good framework and you know what you are up against. A couple good checks, and things will really start to even out.
A lot of people on these boards seem very against any extras. I personally am all for keeping the 'cheap' extras, like the golf channel.
8.3K is a pretty high number for fixed costs. I can see why it has been stressful.
I do think that you need to set a time frame to discuss changes. It might be 3 months from now, or 6, but there is only so long you can live that 'thin' without cracking from the stress. At some point, if your husband loves his job and there is no way to get back to the paychecks of yore, then you need to find a way to scale back your living expenses. (sell the house, buy older cars etc) or a way one of you can bring in more income.
Commission living is tough, but if he was making that much more before, there are other commissioned jobs out there that will pay him just as well.
I think i may be preaching to the choir lol.
At least now you have a good framework and you know what you are up against. A couple good checks, and things will really start to even out.
A lot of people on these boards seem very against any extras. I personally am all for keeping the 'cheap' extras, like the golf channel.
8.3K is a pretty high number for fixed costs. I can see why it has been stressful.
I do think that you need to set a time frame to discuss changes. It might be 3 months from now, or 6, but there is only so long you can live that 'thin' without cracking from the stress. At some point, if your husband loves his job and there is no way to get back to the paychecks of yore, then you need to find a way to scale back your living expenses. (sell the house, buy older cars etc) or a way one of you can bring in more income.
Commission living is tough, but if he was making that much more before, there are other commissioned jobs out there that will pay him just as well.
I think i may be preaching to the choir lol.
QUOTE(powers64 @ Apr 30 2008, 02:46 PM)
Hang in there! It wasn't going to be easy anyhow
At least now you have a good framework and you know what you are up against. A couple good checks, and things will really start to even out.
A lot of people on these boards seem very against any extras. I personally am all for keeping the 'cheap' extras, like the golf channel.
8.3K is a pretty high number for fixed costs. I can see why it has been stressful.
I do think that you need to set a time frame to discuss changes. It might be 3 months from now, or 6, but there is only so long you can live that 'thin' without cracking from the stress. At some point, if your husband loves his job and there is no way to get back to the paychecks of yore, then you need to find a way to scale back your living expenses. (sell the house, buy older cars etc) or a way one of you can bring in more income.
Commission living is tough, but if he was making that much more before, there are other commissioned jobs out there that will pay him just as well.
I think i may be preaching to the choir lol.
At least now you have a good framework and you know what you are up against. A couple good checks, and things will really start to even out.
A lot of people on these boards seem very against any extras. I personally am all for keeping the 'cheap' extras, like the golf channel.
8.3K is a pretty high number for fixed costs. I can see why it has been stressful.
I do think that you need to set a time frame to discuss changes. It might be 3 months from now, or 6, but there is only so long you can live that 'thin' without cracking from the stress. At some point, if your husband loves his job and there is no way to get back to the paychecks of yore, then you need to find a way to scale back your living expenses. (sell the house, buy older cars etc) or a way one of you can bring in more income.
Commission living is tough, but if he was making that much more before, there are other commissioned jobs out there that will pay him just as well.
I think i may be preaching to the choir lol.
Thanks for understanding. As for the 8.3K. I'll sum it up with these four words, "I live in CA". Ugh.
I agree on the cracking. I also am going to try to pick up a summer job, and maybe through the fall. I figure, that'll help us out a lot, and then, we can party like it's 1999. LOL. Just kidding. It'll give us some money to pay things down, and hopefully, back on our feet faster.
On the upside, we do have our Alaskan cruise to look forward to. It's not on our dime, so that makes it less stressful. That'll help a lot of the stress. Minus when DH isn't working. lol. Gotta love commission.
QUOTE
I think i may be preaching to the choir lol.
Probably, but it's okay. You and the others have helped me so much. I've never ever had to budget like this before, so I have been freaking out for the past two years. lol. I'm glad you all have been there and know how to do it.
Again, thanks.
I love, love, love CB. First the annual budget spreadsheet, and now buckets. I finally feel like I'm getting my financial house in order!
QUOTE(VibrantEcho @ Apr 30 2008, 04:33 PM)
I love, love, love CB. First the annual budget spreadsheet, and now buckets. I finally feel like I'm getting my financial house in order!
Ditto!!!
CB has definitely helped me in so VERY many ways.
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