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How to Fix a Budget

It’s odd – when I woke up to head to work today, I felt as though a weight had lifted – as though there was some kind of change in the weather. We can do this – I know we can.

Last night, my wife and I decided to ask my sister to baby-sit the kids for us so we could get away and be alone for a little while. I took her to Panera bread, her favorite restaurant, as our final “splurge” before we begin tightening the belt. We brought along a month’s worth of bills, two notebooks, and my laptop.

We sat at a corner table, set up our laptop (Panera is great – they have FREE wireless internet at all locations), and arranged our notebooks and bills on the table in front of us.

The food was unbelievable – Panera sandwiches are unlike any other sandwich I’ve ever tasted.

While we worked through each one of our bills individually, we tried to decide which one could be reduced and how. Our goal was to reduce our expenses enough so, for starters, we can at least afford to pay the utility bills and make some kind of attempt to pay the mortgage.

Before we started coming up with ideas – our budget looked something like this:

Mortgage: $1540

Electric: $120

Cable TV: $85

Internet: $40

Land Phone: $62

Two cell phones: $110

2 Magazine subscriptions: $5

One school loan: $100

Three credit card payments: $600

One car payment: $350

—-

Total bills: $3012

Before my wife stopped working, together we were bringing in about $3800/month. Now with only my job, I’m bringing in $2100…no wonder we’re hurting!

As we went through the list, we tried to come up with a creative idea to reduce each utility, or eliminate it completely. The electric bill we can’t do much about, however we both agreed that our first priority during the coming month would be to replace all of the 60 watt bulbs in the house with the new energy-saver lower wattage 15 to 20 watt bulbs.

We’ve decided to make the difficult decision to cut cable television, at least for now. The kids are going to love that one. We need the internet though – to pay bills and do work. So that stays.

We did realize, however, that the phone bill could be eliminated completely! Over the last few months, the local cable company, Metrocast, has started a new program where they offer digital phone services for only about $40/month. If we switch over to this new plan, we can eliminate our phone bill completely from our budget.

We’re canceling one of our cell phones, since my wife is now at home during the day, and we are canceling the magazine subscriptions.

By the time we were through our meal, and I’d entered all of the new numbers onto the Excel spreadsheet…our new budget looks like this:

Mortgage: $1540

Electric: $120

Cable TV: $0

Internet: $40

Land Phone: $0

Two cell phones: $55

2 Magazine subscriptions: $0

One school loan: $100

Three credit card payments: $600

One car payment: $350

—-

Total bills: $2805

We’re still behind $705 before we can even break even…but we’ve cut over $200 out of our expenses so far!

Goals for the week:

Contact a good credit counseling service – hopefully reduce the minimum monthly payments.
Contact the mortgage company and see if they’ll help lower the payments somehow.
Look into deferring the student loan.
Look into refinancing the car loan and lowering the payment.

On the drive home – we both felt much better…at least we’ve gotten started in repairing whatever went wrong with our finances and our lives. We have hope again…and that’s something we haven’t had for a very long time.

The saga of The saga of Jack’s family ( to be continued)