How do you plan 5 years?

[jhy12]

Something I'm trying to grapple with. How do you plan what gas prices or grocery prices will do in 5 years? Can you add in what will most likely be an increase to your expenses now to create a buffer? I know life-changing events (baby, job loss, medical issues) can constitute a modification but what about slight increases in gas prices? How is that handled? What did you do?

I submitted our expenses to our attorney and working through some of this but wanted to get your experiences. We live in MN and my husband has a very long commute (especially in winter) and I worry about gas especially. We've been advised for both of us to get new cars to get us through the next 5 years. Ugh, I hate car shopping.

Also, my daughter is 2. But by the time we are out she will be almost 8. She's not in really any sports or activities now but will be in the future. Will they allow us to expense those activities now (within reason, like maybe a dance class or t-ball)?

And if we have a baby, will they allow us to expense out daycare, diapers, formula, additional car seat? Or should we sterilize ourselves now? Seriously, so many questions, so much stress.

[bankruptbull]

I worked with my attorney a lot on these issues, she was good about telling me I needed to add more to this or that category. For gas I used an average amount of the last year of what it cost me to fill my car up. Grocery prices are going to go up and down, if you over spend in one category it will have to come from another one. For instance on my groceries we had been skimping by and not really eating or shopping that well, things were very tight. Now I have plenty of money for groceries and do quite well. My kids are 8 and 12, they are in sports but I did not put that down as an expense, so when those come up the money will have to come from somewhere else. Maybe someone can chime in on having a baby. Good luck with your case!

[LadyInTheRed]

Definitely talk to your attorney about these things.

The unfortunate reality is that extracuricular activities may not be allowed expenses. The day care should be and hopefully those expenses can be worked into your plan. Your expenses on schedule J are supposed to be your expenses over the 5 years divided by 60. So, maybe you can add in the anticipated child care expenses and average them over the 5 years. You will need to be very disciplined about putting money away each month for the future increased expenses. But, if increased child care expenses is going to allow you to go back to work and increase your income, it may be a wash.

Grocery and gas expenses definitely increased during my plan. Fortunately, my salary increases of about 2% per year covered those. If all else fails, a plan modficiation is always an option if things get tight due to increased expesnes without corresponding increases in income.

[spidge]

I cannot answer any of your expense questions but I do hope your employers increase your wages at a pace that will leave you in good shape at the end of the plan. My company did not and we have yet to enjoy the benefits of finishing a 5 year plan. My wife only works a few hours a day and her income has increased nicely on a union job.

If your income does not grow your expenses will catch up and surpass your raises resulting in no financial gain for you at the end of the plan.

[switch625]

My attorney claimed the Form 22-C max of $156.25 per child for educational expenses. My trustee had no issue that I was aware of and I did not have to submit proof of those expenses. Check with your attorney to see if that can be done, as it could vary from district to district, trustee to trustee.