Wednesday, October 2, 2013

Budgeting For Broke

Today's post is a guest post by my good buddy Joel.  He and his wife have spent nearly their entire relationship struggling with un-and-under employment.  They are now both employed full-time and trying to crawl out of the financial hole created by lack of work.  They just started a blog called Bacon & Ice Cream, which I highly recommend.

So Becky and I are now finally crawling out of the pit of unemployment and survival-mode finances. Over the past couple years, I’ve learned one thing – that making a budget does not work if you don’t make enough to cover your basic bills. No amount of money saving tips making your own household cleaners, canning your own food, or getting clothes at consignment stores will help if just the rent and student loans are more than one of you makes in a month.

When I was first unemployed, I called a place that wife had worked with once to get out of credit card debt. It worked well for her and I was hoping for some good advice.

What he said was “yeah, you don’t make enough for us to help you. Stop paying your credit card bills, quit paying the mortgage on the house you don’t live in, put your student loans on hold, and get used to lots of phone calls.”

I thank Jebus that we live in an age of caller ID, or at the very least area code ID, so I could determine which calls were creditors and which were potential employers during the job search. (BTW, this was with the cheapest cell phone available, no fancy smart phones.) By the end of my job search, I was ignoring about 18 calls a day.

But now we are both bringing in some steady and predictable paychecks.

And now that we can actually pay bills on time, and start paying off past debts, we need a system.

One reason I hate typical monthly budgets is they don’t work for paycheck to paycheck and week to week survivors like us. It’s fine and dandy to know that you have so much income and so much in expenses in a month, but not knowing how they actually flow in and out is a problem. We might have enough for the month, but not at the right time when it is needed before a bill is overdue. It’s so easy to forget to leave aside enough for the phone bill or internet or whatnot.

To combat this I printed out some calendars and started filling the Fridays with our income and putting bills on the days they are due then keeping a running tally of how much we will have in our checking on each day if we stick to the budget. The benefit is I know that we have 140 bucks between now and next Friday for anything that is not a bill or outside the $200 we budget for gas and food per week. That’s helpful.

The problem was if there was any change to a bill or something comes up that needs attention (like out of contact cleaner or something) I had to go in and erase and re-add everything on the calendar. Math. Ugh.

I couldn’t be the only one with a need like this. And under that assumption, I figured someone must have created a template. I did not find an answer from Microsoft templates. I did not find one at the credit fixing agency I work with. But I did some searching and found this site:

There’s a demo video on the site about how it works, and so far it’s working just as advertised. I can even update it from my phone, like last night when I got a blizzard at DQ – I updated the calendar while waiting for my order. Boom. Done.

I can put in one time bills, recurring expenses, and categorize them appropriately so I can say to Becky what we have extra for the week, and look ahead to see where we will be at in a few months on regular checks and all of the sudden we can breathe again.  And we can check it from any computer so I don’t have to say “We’ll see when we get home and look at the calendar.”

Quick anecdote to show the power of this handy tool.

My car’s brakes started dying, and it’s not worth fixing at this point. We are making due with one car between us. When we went to see about getting a used car for $5,000, we were told we couldn’t get a loan for that because of our horrible credit history during unemployment, but they would be happy to set us up with a $20,000 car loan to pay off over several years. This boggles the mind, but I took the problem back to the budget calendar, and it turns out we can sock away $5,000 by April for a car to own free and clear, and we’ll still have some left over for savings.

Anyway, I just wanted to write this as a possible tip for trying to navigate the craziness of bills and income while living on a tight week-by-week budget. It isn’t a panacea – I don’t see it working well if your income is unreliable or variable. But it is a helpful tool in many cases.

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