Thought this would be interesting, if not helpful; here is my thought process and planning that went into making a sub-$1100 budget work for us. Keep in mind this might be drastic for you, and involves swallowing some pride. Maybe you can just think of this as a stepping stone, not a permanent solution.
We used to pay a mortgage, credit card bills, a car payment, and general living expenses here in Provo, UT. Our monthly budget was around $2,800. We filed Ch7 BK after my wife lost her job and things snowballed. I took that time to reevaluate our finances...
Housing.
Initially, our BK was to help us keep the house. However, it soon became obvious it was too much for us. The mortgage was $1024 monthly, plus $170 a year HAO fees. No loans after BK, so that meant renting. The cheapest 3bd around this area is about $800 plus utilities, and a big step down from our house. While technically better, that's not a huge savings. The problem is this area- large population, high unemployment rate, expensive housing.
Looking two hours and fifty minutes north, out of the cities and into my wife's small hometown of Burley, Idaho, I found the answer. As long as we fell below income guidelines, we could get an riverside apartment for $564 a month that put our house to shame; newer, bigger, walk-in closet, central air, dishwasher, disposal, etc. It also has optional cable and internet for $20 and $10, respectively! Sure beats the $50+ we forked over each month just for Comcast internet.
Location.
As a side effect of moving, there's a lot of other perks I never would have thought of. Gas & electric is cheaper there, plus the apartment is much more insulated / efficient than the house. Car insurance is slightly cheaper. Food costs a bit less. Being a small town, we won't go through nearly as much gas getting around. Car registration is almost half the price. And unlike Utah, there are simply no Safety & Emission tests! I don't know how many times I've had to cough up money for the tests, had them fail, paid a mechanic for a tuneup, or even ended up getting rid of an older reliable car because it would cost too much to make it pass. No more!
I've always been kind of a city boy, but maybe old age has mellowed me. I like the clean air. Living next to a big river is pretty nice. No rush hour traffic, fewer throngs of busy, irritated people, and the ability to actually walk places are novel concepts. Twin Falls, a larger city, is about half an hour away should I want to visit that. For that matter, I actually like driving, so visiting down here in Utah every few weeks is a planned weekend thing.
Vehicles.
Before the BK, my wife was paying $250 a month for a 2005 Pontiac Grand Am. Let me take this time to rant about something here. The quickest way to get buried under debt is car payments. Think about this:
If your payments are high, the first time you need repairs, or lose a job, or whatever, you're behind. Fees pile up, threats start... after a few months you could end up without any car and completely out all the money you spent. If your payments are low enough to manage, you're hardly paying down your balance. After a few years, you realize that you're now thousands of dollars upside down on your loan, and only getting worse with time. In either case, if you do manage to pay it off completely via your monthly payments, you've likely now paid almost double what the car originally cost.
We gave up her car in the BK. I sold my battered gas hog 1985 Buick LeSabre, and bought a 1998 Oldsmobile LSS for $1500. I knew it would need work, but it ran nice, was in good shape, and was worth a lot more. Over time, I fixed every problem and now have a reliable luxury car, if a little older.
I bought my wife a 1999 Saturn SL1 for $500. Yes, I got lucky on that. It needed an ECT sensor and a thermostat (both of which I replaced myself), plus a new AC hose (which I let the garage handle). Total cost for buying the car, repairs, title and registration, etc, ended up under $1000.
Now, our cars aren't the biggest or flashiest. Of course she'd rather be driving a 2009 Chevy Impala LT, and I'd like a big old restored classic GM. But we own them outright; her Saturn gets 38mpg highway; they both together cost less than one year of her previous car payments; they are reliable and will work for the next few years, at least. Overreaching is the number one way people end up in BK, getting in over their heads.
Food.
We used to eat out a LOT. Almost every night. Groceries would spoil in our fridge while we wasted a good portion of our income on take-out or delivery. Not only was it wasteful and unhealthy, it made us fat. I got up to about 250 and just felt lousy. Planned meals at home are always better for you than the local Greasy Burger.
With such a low income, we qualified for food stamp assistance. They've come a long way in the twenty years since I was last familiar with the program. Now you get a debit card, which really cuts down on the embarrassment factor. No one, sometimes not even the cashier, is aware we use food stamps. We don't plan on staying on it any longer than needed, but having our food budget paid for is beyond helpful. It also really helps us separate our cash from our food money.
There's still little ways to eat out, even now. Maybe not fine dining, but you learn to appreciate basic things more when you're without. Papa Murphy's, a take-and-bake pizza place, actually takes food stamps. Sonic drive-in has half-price drinks between 2pm - 4pm (love those Route 44 Cokes), and often will give you another free Route 44 if you complete a phone survey listed on the receipt. We've actually gotten our last half a dozen free this way. I also occasionally will use Craigslist to sell some extra household item, then count that as "play money." Again, it separates bill money from spending cash.
Utilities.
Yeah, yeah, it sounds silly... turn off the lights when not in use, keep the TV off, yadda yadda. But it does add up. "Only a couple bucks" becomes quite a bit week after week, month after month, year after year. There's also other things you can do.
Shop around for car insurance. Owning our own vehicles, we also could get liability only insurance, instead of full coverage. We both have cellphones with T-Mobile (cheapest family plan available) and I dropped our bill 15% by using my wife's Alumni email to get a discount. Really look at your monthly bills, removing or adjusting anything possible. A mere $13 savings may mean the difference between having gas or not during a difficult week.
Attitude and the future.
We do have long-term goals. Over the next few years, we plan on rebuilding our damaged credit. I want to get a stable job / career set up, and hopefully save some money. The end goal is to have a house again, albeit one in Idaho, not Utah. We paid $110k for a manufactured home on a tiny plot of land. You can have a two-story real house with a couple acres and outbuildings for under $80k in Burley. We also want to get a newer Chevy Impala, buy some furniture, etc etc.
The main thing is, we had to break out of America's carefully instilled want-it-now-damn-the-consequences mentality. We can have everything we want, if we take our time and use some wisdom. I realized I used to walk to work, live in a ratty apartment, and eat Ramen... and somehow felt justified complaining that we didn't have a house, new car, and could eat out everyday. Rethink things. It may be anti-American to be content with what you have, but it's not impossible. And in five years when we're living in our own home, bought a nice car outright, and have the stability and comfort not to stress about finances- it will all be worth it
We used to pay a mortgage, credit card bills, a car payment, and general living expenses here in Provo, UT. Our monthly budget was around $2,800. We filed Ch7 BK after my wife lost her job and things snowballed. I took that time to reevaluate our finances...
Housing.
Initially, our BK was to help us keep the house. However, it soon became obvious it was too much for us. The mortgage was $1024 monthly, plus $170 a year HAO fees. No loans after BK, so that meant renting. The cheapest 3bd around this area is about $800 plus utilities, and a big step down from our house. While technically better, that's not a huge savings. The problem is this area- large population, high unemployment rate, expensive housing.
Looking two hours and fifty minutes north, out of the cities and into my wife's small hometown of Burley, Idaho, I found the answer. As long as we fell below income guidelines, we could get an riverside apartment for $564 a month that put our house to shame; newer, bigger, walk-in closet, central air, dishwasher, disposal, etc. It also has optional cable and internet for $20 and $10, respectively! Sure beats the $50+ we forked over each month just for Comcast internet.
Location.
As a side effect of moving, there's a lot of other perks I never would have thought of. Gas & electric is cheaper there, plus the apartment is much more insulated / efficient than the house. Car insurance is slightly cheaper. Food costs a bit less. Being a small town, we won't go through nearly as much gas getting around. Car registration is almost half the price. And unlike Utah, there are simply no Safety & Emission tests! I don't know how many times I've had to cough up money for the tests, had them fail, paid a mechanic for a tuneup, or even ended up getting rid of an older reliable car because it would cost too much to make it pass. No more!
I've always been kind of a city boy, but maybe old age has mellowed me. I like the clean air. Living next to a big river is pretty nice. No rush hour traffic, fewer throngs of busy, irritated people, and the ability to actually walk places are novel concepts. Twin Falls, a larger city, is about half an hour away should I want to visit that. For that matter, I actually like driving, so visiting down here in Utah every few weeks is a planned weekend thing.
Vehicles.
Before the BK, my wife was paying $250 a month for a 2005 Pontiac Grand Am. Let me take this time to rant about something here. The quickest way to get buried under debt is car payments. Think about this:
If your payments are high, the first time you need repairs, or lose a job, or whatever, you're behind. Fees pile up, threats start... after a few months you could end up without any car and completely out all the money you spent. If your payments are low enough to manage, you're hardly paying down your balance. After a few years, you realize that you're now thousands of dollars upside down on your loan, and only getting worse with time. In either case, if you do manage to pay it off completely via your monthly payments, you've likely now paid almost double what the car originally cost.
We gave up her car in the BK. I sold my battered gas hog 1985 Buick LeSabre, and bought a 1998 Oldsmobile LSS for $1500. I knew it would need work, but it ran nice, was in good shape, and was worth a lot more. Over time, I fixed every problem and now have a reliable luxury car, if a little older.
I bought my wife a 1999 Saturn SL1 for $500. Yes, I got lucky on that. It needed an ECT sensor and a thermostat (both of which I replaced myself), plus a new AC hose (which I let the garage handle). Total cost for buying the car, repairs, title and registration, etc, ended up under $1000.
Now, our cars aren't the biggest or flashiest. Of course she'd rather be driving a 2009 Chevy Impala LT, and I'd like a big old restored classic GM. But we own them outright; her Saturn gets 38mpg highway; they both together cost less than one year of her previous car payments; they are reliable and will work for the next few years, at least. Overreaching is the number one way people end up in BK, getting in over their heads.
Food.
We used to eat out a LOT. Almost every night. Groceries would spoil in our fridge while we wasted a good portion of our income on take-out or delivery. Not only was it wasteful and unhealthy, it made us fat. I got up to about 250 and just felt lousy. Planned meals at home are always better for you than the local Greasy Burger.
With such a low income, we qualified for food stamp assistance. They've come a long way in the twenty years since I was last familiar with the program. Now you get a debit card, which really cuts down on the embarrassment factor. No one, sometimes not even the cashier, is aware we use food stamps. We don't plan on staying on it any longer than needed, but having our food budget paid for is beyond helpful. It also really helps us separate our cash from our food money.
There's still little ways to eat out, even now. Maybe not fine dining, but you learn to appreciate basic things more when you're without. Papa Murphy's, a take-and-bake pizza place, actually takes food stamps. Sonic drive-in has half-price drinks between 2pm - 4pm (love those Route 44 Cokes), and often will give you another free Route 44 if you complete a phone survey listed on the receipt. We've actually gotten our last half a dozen free this way. I also occasionally will use Craigslist to sell some extra household item, then count that as "play money." Again, it separates bill money from spending cash.
Utilities.
Yeah, yeah, it sounds silly... turn off the lights when not in use, keep the TV off, yadda yadda. But it does add up. "Only a couple bucks" becomes quite a bit week after week, month after month, year after year. There's also other things you can do.
Shop around for car insurance. Owning our own vehicles, we also could get liability only insurance, instead of full coverage. We both have cellphones with T-Mobile (cheapest family plan available) and I dropped our bill 15% by using my wife's Alumni email to get a discount. Really look at your monthly bills, removing or adjusting anything possible. A mere $13 savings may mean the difference between having gas or not during a difficult week.
Attitude and the future.
We do have long-term goals. Over the next few years, we plan on rebuilding our damaged credit. I want to get a stable job / career set up, and hopefully save some money. The end goal is to have a house again, albeit one in Idaho, not Utah. We paid $110k for a manufactured home on a tiny plot of land. You can have a two-story real house with a couple acres and outbuildings for under $80k in Burley. We also want to get a newer Chevy Impala, buy some furniture, etc etc.
The main thing is, we had to break out of America's carefully instilled want-it-now-damn-the-consequences mentality. We can have everything we want, if we take our time and use some wisdom. I realized I used to walk to work, live in a ratty apartment, and eat Ramen... and somehow felt justified complaining that we didn't have a house, new car, and could eat out everyday. Rethink things. It may be anti-American to be content with what you have, but it's not impossible. And in five years when we're living in our own home, bought a nice car outright, and have the stability and comfort not to stress about finances- it will all be worth it
I was discharged a couple of weeks ago and now I'm looking into ways to save a little extra $$...
Got to love family feuds
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