When people try to tackle and pay off their debts, they usually stop any form of investments and redirect any excess income toward their debts. We have used a similar approach before, to pay off our credit card debts, car loan, and tuition loan. This time we decided to decrease our monthly expenses to accommodate the credit card payment without stealing from our future goals. We decreased our monthly budget from $1,340 to $1,045.The new living expenses estimate includes $820 for expenses and a possible saving of $225. It is a challenge that would help us live on one income and pay our sudden credit card debts within the same income without changing our investment plans.
Food: $66.86
Walmart Purchases: $59.71
2-5Lbs Yellow Cornmeal ($2.84/ea.): $5.68
8-5lbs Unbleached Flour ($1.22/ea.): $9.76
Animal Cracker: $2.74
2-AIM Tooth Paste ($0.74/ ea.): $1.70
Floss: $0.87
101 Fl oz. Extra Virgin Olive Oil: $18.24
Multiple boxes of Cereals: $14.85
2Lbs-Mozzarella Cheese block: $6.24
Hy-Vee purchases: $7.15—discount $13.16
4-2% Milk 1/2 gal ($0.77/half gal was $2.29/half gal): $6.16, discount: $12.16
Sour Cream (was $1.99): $0.99, discount $1
Meat: $5.76
12-Dozen Eggs (Walmart @ $0.48/dozen): $5.76
Fruit: $9.97
14.45 lbs. Red Grapes (Hy-Vee @$0.69/lb.): $9.97
One of our income is decreasing a little and we have some debts due to a scam we need to pay off. As we are close to the start of a new month, I have some saving from food budget not knowing when we would be able to take money out for grocery, I requested my husband shop some staples we needed in the house.
I have been giving grape as snack to the kids for school. They bring 2 snacks to school along with their lunch. With the olive oil, I made popcorn one morning for them to take to school.
I purchased cereals for $15 for the kids and my husband’s breakfast. However, I plan not to serve the kids cereals every morning. Last weekend I soaked whole grain of wheat and oats in water overnight and pounded in my mortar and pestle. Then I boiled for 30 minutes and stored in the fridge. I served the porridge during the week for breakfast. Some of the kids liked it more than others. Whole grain porridge is more nutritious than cereals.
In order to include our new credit card debt payment into our “live on one income budget”, I requested my husband review our budget and discuss it with me. He made changes. We would stop saving $350 a month for irregular expenses. I decided any saving from gas and electricity would go into saving. I also decided to take $375 for grocery as usual but our new grocery budget would be $250 a month for our family of 5. That would include $100 for food, $50 for non -food items and kids clothing, $50 for fruit and $50 for meat. I would put $125 aside for saving for irregular expenses. I might stop purchasing my staple at the end of the year and purchase through out the year but I am not sure. It all depends how much I would be able to save from the $150 a month food and non-food budget.
Our new monthly budget would be:
YouTube, Hulu, and internet: $135 (was $180 for cable and internet)
Cell Phone: would be $30 (was $110)
Electricity: $160 as before
Gas: $160 as before
Car Gas: $55 as before
Bus Ticket: $10 (was $40)
Donation: $60 as before
Food $375 as before
Our Allowances: would be $60 (was $200 for both my husband and I)
Our estimated budget before was $1,340 a month. We used to save $350 a month for irregular expenses. The new budget would be $1,045 a month including at least $125 of saving from food and probably about $100 saving from electricity and gas. Our expenses estimate might be around $820 and we might save $225 a month.
On our spreadsheet, the food budget didn’t change. But in the food budget spreadsheet the new budget would be $250.
Bus ticket was estimated at $40 a month but was not used as I walk when the weather is nice.
Electricity and gas estimates remain the same. Any saving would be transferred to savings.
I am glad my husband was able to find ways to reduce some of our expenses.
Before I decided to cut our food budget, I looked at my food spreadsheet where I recorded all my grocery expenses by category and stores. I totaled all the expenses by category from January to September and divided the total by 9 months. Our food, fruit, non-food, and meat were in the range I set my new budget at. That is the beauty of budgeting. It helps make financial decisions. The income will live on is going down. Even worse we have a credit card debts to pay. Therefore, we reduce our expenses to fit our monthly expenses and the debts payment within that income. One of the changes is to cut cable and change our cell phone carrier from Verizon to a small carrier. I plan to cut our grocery budget so that I can save some money for expenses like home maintenance cost.
The salary we live on might decrease a little but we cut cost enough to have some money left to pay more than the minimum on credit card debts. The other income would continue to pay for our mortgage and finance our businesses.
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