Starting a budget with chapter 13

[Michellehope]

Hello! We are at the beginning stages of filing chapter 13. We are looking at a 100% and a pretty high payment. We are a family of 4 and i’m just wondering how everyone was able to get on a budget? Do you do cash envelops for everything? Whats everyone system?!

[shipo]

It has been a while since I started my Chapter 13, but my approach was to cut out all of my subscription services which weren't absolutely necessary. If I recall correctly, my only regular bills (over and above my payment to my Trustee) were rent, insurance, electric, and internet (via my local cable TV provider). Needless to say, my first year was the hardest; by the end my income had grown by 39% so I actually had some small savings when my discharge came through.

[Michellehope]

Thank you for commenting and sharing your experience. I just heard Hulu is raising its prices again, so I will probably be cutting that one out

[shipo]

Yup, no streaming services at all for a few years; smart.

[Carmella]

Congrats for thinking ahead. My mental state was not clear when we entered BK13. I agree the first year is the hardest.

One thing I did was find cheap meals that were still healthy to save money on groceries. I work full time so I would plan for my lunches to be dirt cheap as possible. I cut whatever I could from the budget to stretch money. We were still helping support my daughter who just graduated from college, but was not self sufficient even though the BK people thought she's graduated she's not dependent on mom and dad anymore.

I shopped at three different stores between Aldi's, Walmart and the local grocery stores to get the best cost on groceries, toiletries, etc.

An envelope system would be a good idea since you will be working a cash budget. My husband used cash and I took care of the online transactions to pay the usual bills and I used the debit card when I shopped. I kept tabs on the amount of money coming in and going out. I wrote down exactly what we needed for the bills and while I do not advise this I knew which bills I could pay a little late with little to no penalty. Like the utilities could be paid late and if there was a penalty it was a small percentage of the amount owed usually under $1. I knew I had grace days on the car payments, but tried not to use them since I didn't want anything the least bit negative on what I had to pay per BK plan. Sometimes we didn't have enough money to pay the utilities on the exact due date, but we would get a pay check a few days later and I knew I could "get away" with paying it "late." I don't advise playing those types of games, but if you are in a pinch know your options and try not to make it a habit.

If it's possible to set aside any cash now for future "emergencies" I would do that now before you file. You can even keep it cash in a safe place and then if something unexpected happens you can use it. That was the toughest part for us, we had no emergency cash and no family to fall back on so I went too long with bad tires on the car and when we had a plumbing leak which leaked way too long, etc. But then again we were helping to support our daughter which is where some of our money was going even though technically it wasn't our "legal" responsibility, but I wasn't going to toss her out of the house making a non-livable wage working required internships that would lead to much better employment.

[Kimbergrl]

I created an Excel spreadsheet with all my bills and budgeted out several months at a time. I tried cash but I'm too prone to spend it. I use my debit card now. All my stuff is set up to pay online anyway. On Black Friday Hulu does a deal that's good for a year. I pay $2.99/month which includes Disney+. I'm sure they will change it this year. Hopefully it will still be inexpensive. I bring my lunch to work and stopped eating out as much. I changed my phone plan. I was paying over $200/ month for a phone and iPad. I'm paying $45 now just for a phone. I did everything I could to lower all my bills. I switched from YouTube TV to Sling. I was also able to put a little in savings from selling some stuff. FYI I'm in Chapter 13 and paying 100% as well.