Sticking to your budget - how long did it take to find your groove?

[fileda13]

Even though I'm a "financial professional - CPA", this whole bankruptcy process has been an eye-opening experience.

Only a few months in, I am finding the budget process to be a difficult one. I have tracked my finances on Quicken and Excel for decades, so I know where almost every dollar has gone. Yet now that I have nothing to fall back on (CC's), which honestly is the best thing that ever happened, living day to day while planning for the unforeseen future is tough.

So how long did it take you to find a budget that seemed to work every month? And how long did it take you to smooth out your spedning habits (crossing that bridge from what took you to bankruptcy's doorstep to the reality of today) and find your groove that worked? Of course, no matter what you plan a major uncertainty could blow everything, but my question is based on the assumption that you incur no surprises that greatly alter your plan.

[forgotten]

I'm still trying, 2 years later. Somehow everything always seems to work out... even when it looks like it isn't going to.
So, I don't have much advise, just do the best you can!

[chicagoed195]

It's still about choices. Although in theory, a Chapter 13 plan doesn't have any "disposable income" left after paying the trustee each month. the reality is there is a lot more flexibility than we would like to admit. I'm not saying it's easy, but the choices are there. For instance, I am allowed approximately $100 per month for clothing in my plan. In 20 months, I have only spent about $400 on clothing. I am allowed $1,000 a year for charitable contributions. With all due respect to the functions that charities perform, they will just have to do it without my help for another 40 months. I could bore you with all of the other details of how I am saving, but you have to determine those items through your own experiences. If I don't absolutely need it, I don't buy. That way, when the hvac sytem fails in May and the hot water heater fails in December, I can manage the pain.

[andy158]

Yes the plan in your 13, if it is set up properly, should allow you to live comfortably with some flexibility. As the previous poster said monthly allowances for things like clothing, pets, car and home upkeep, etc. can be money savers when you spend the allowed monies wisely. We are fortunate that I do all our home and car manitenance so that saves us a big chunk. Thrift shops are a great source of new to us clothing. Most is like new and in style.

Your spending habits will change immediately. No more impulse buying. Each pricey purchase will be thought out and you will constantly ask yourself if you can do without this for a while longer.

Your emergency fund is a must have and it should be the first thing you try to establish. Any "disposable" money you save from your "allowances" should help fund it. It will be used for things such as a hot water heater, unforseen car problems, all the things you would have whipped out a cc to pay for. Ours has been built up and depleted several times already. The last one for an emergency vet bill and car repairs necessary to pass inspection. Even though I did the work myself, I still had to take it for front end alignment @ $60.00. The vet bill and car was $600 we had to spend in one month. Thank God for the E-fund.

It is good the plan has the flexibility to be altered for income loss. It is called a wage earners bankruptcy and is geared for people who have a reliable, steady job for at least the 5 years you are in. In the event your income can no longer sustain your plan, a conversion to a 7 is not that difficult.

[mountanddo]

Since I've stopped making CC payments as of a year ago and haven't had the option to use them as well as not working for a couple of months on an off I am lucky that I have HAD to spend as little as possible. The fact of the matter is that even when I file Chapter 13 it will be like I am going to have a little bit more money because I've really been frugal the last year. I pay only the 4 bills that I have to pay..rent, cable, cell phone and electric. Everything else like gas, groceries shampoos, etc. is bought with what is left over which wasn't much. Now that I am working fulltime and have the chance of getting hired permanantly I think I hopefully will be able to save a bit for a car *or repairs*. It funny how when you have such little money how much you actually save. Instead of buying Pantene I buy Suave. $3.99 compared to .99. Amazingly it works the same. I think we all spend much too much money on things that the cheaper version will work just as well. It just takes bankupcy to figure that lesson out!

[mdl]

We are still working on living within the budget. I think its going to take some time.
However, its been a LONG time since I have said "I have $67 in the bank until Friday. DONT buy anything!"

[moe]

This is why I'm scared of Ch. 13. I am often $57 in the bank don't buy anything.

But I don't want it to be Court Ordered that I have $57 and can't buy anything. That scares me!

[mountanddo]

This is why I'm scared of Ch. 13. I am often $57 in the bank don't buy anything.

But I don't want it to be Court Ordered that I have $57 and can't buy anything. That scares me!

You might find that you are less stressed in that situation. All your bills will be being paid except for your living expenses and you'd be surprized how you can manipulate that money to last. You can spend or save that money without feeling guilty that you are spending when you should be paying off the CC. It just depends on how you look at your situation.

[moe]

Really? They pay all your bills? Child care and life insurance and all that?

I really do remember how nice the days were when I just paid rent and electricity and that's it.

I would live in a dorm in a heartbeat and pay for my meal plan!!

But don't they just pay those to whom you are indebted? I have lots and lots of dribs and drabs--insurance, childcare, etc., etc. That's not paid by the court, is it?

[mountanddo]

After reading your other posts on this forum I think you know that Chapter 13 doesn't pay for things like that. I was trying to be helpful but I think I'll stop now.

[moe]

Wait, are you kidding?

I KNOW NOTHING. Every time I think I find out about something and understand it, I find out I didn't understand it!!! I was being totally serious.

Bankruptcy is this giant jigsaw puzzle to me and I think 'oh, yeah, this piece fits' and then I put in another piece and realize 'wait, this is totally wrong.'

I am completely confused. I just want to think there is some hope so I can sleep at night. One minute I think 'oh, it's OK, I'll figure it out.' Then I find out a new thing and realize 'oh I was wrong, I'm screwed.'

[mountanddo]

But don't they just pay those to whom you are indebted? I have lots and lots of dribs and drabs--insurance, childcare, etc., etc. That's not paid by the court, is it?

I guess you should consult with your attorney as I would not be able to answer your question as I really know nothing about your situation.

[moe]

Yeah well, I've been trying to explain. I went to an attorney and I felt confused. Then I talked to another attorney and I felt bullied. So I am asking questions here so that when I do go to an attorney, I know whether they are a good attorney.

My attempts to talk to an attorney would have been a huge bad thing because when I was barely BARELY over median they told me to go to Chapter 13 and this was with 1200 of childcare a month, which I just found out you can actually put into your means test. Back then, that alone would have put me way under the median. But did they tell me that? No!

I found that out here. So if I have to talk to an attorney to find out everything, this is going to be a major problem for me because clearly attorneys can be bad.

Everyone here says 'find a good attorney.' I just realized that a REALLY good attorney would look carefully at whether I qualify for Chapter 7 and push me through a Chapter 7 if I did qualify. Guess when I figured that out? TODAY.

I am not ready to go to another attorney yet. I need to arm myself. When dealing with these people I just shut down. I cannot talk with experts. This is a problem I have with doctors. I don't know how to stand up for myself.

So basically, yes, if someone says something here I am assuming my prior understanding is incorrect. So when you said that they pay your bills, I wanted to see if they pay all your bills because I don't know anything.

Now I have time because if I am doing six months of payments then I will wait for my part time job to get off there and so I want to spend that time here understanding bankruptcy so that I don't feel too terrified.