How do we fall short every single month??

Question

I got a $20k raise a few months back and my husband and I thought all our money problems were a thing of the past. How wrong could we have been?? It seems we have even more problems with our financing now. At the end of each month, it seems like we're pulling change from the couch cushions just to come out even (ok, that's an exaggeration but you know what I mean). We always talk about putting ourselves on a strict budget, but neither one of us has been any good about following through. Are there any good budget systems or maybe even some computer system that can help us? We just don't see where all of our money is getting drained. We should be more than comfortable saving over $1000 a month, but we barely have $100 in the bank at the end of the month. Where are we going wrong and how do we fix it? TIA!

Answer 1

Here is a legit site to start with:

http://www.daveramsey.com/

Answer 2

Open a joint account at another bank than you normally use. Have $1,000 - $1,200 direct deposited there before you get to see the money.

I worked with a guy who had $30,000 in credit card debt 3 car loans, a boat loan, and a mortgage. He went from a position in our company paying $40,000 to one paying approximately $85,000 a year. I told him to use the extra money to pay off your debt before you get used to spending it. He didn't listen. Within a year his credit card debt was up over $60,000.

Pay your self first, or at least pay your debt first, before you get the money in your hands to spend.

Answer 3

hello - congrats on the raise.  way to go in this economy.  whenever i get a riase i put the "extra" amoutn direclty into savings, so i am living on the wage i earned a few years ago now.  every so often i adjust to allow for increases in procies, but overall this has worked well for me.  

here are some more tips and ideas -

List out how much money you have coming in each month (paycheck, alimony, side jobs, etc.).

List out what your fixed costs are (rent/mortgage, car payment, car insurance, phone, cable, student loans, commute costs etc.) If you have credit card debt look at how much per card and which has the highest interest rates.

Track it by category -

retirement (401K, etc.)

home

car (payment, insurance, etc.)

gas

cable/electric/water

groceries

eating out

clothing

movies/plays (include the popcorn)

books

newspaper (if you already paid your news paper or magazine subscription, figure out the monthly cost and include that)

hanging out with friends (bar, pool etc)

non meal related drinks/snacks (Starbucks, diet coke, snacks)

other

other

(other could be alimony, whatever, things I did not list out but you have to pay)

and you will see quickly where your money is going to go. Then you can see if it is all the right places, or if you want to make a change and not buy so many clothes, see so many movies (or pass on the popcorn) etc.

Consider what is really important to you and what is not and spend accordingly.

Be sure to put all left over money into retirement savings somewhere and not just spend it on something else (or put it towards paying down credit card debt). And keep tracking what you spend for at least 6 months. that will help you get into habits and patterns that are good ones.

Retirement savings are very important, so if you have a 401K or the equivalent, dont stop contributing to that. I see so many questions here about stopping contributing or taking the money already saved out, dont do that. The value of the compound interest is huge.

feel free to email me for more info if you like

good luck

Answer 4

I know lots of people with the same problem and I tell them listen to Dave Ramsey

Answer 5

Here what you do. Starting from Friday, since it was the 1st write down every penny you spend. Whether it was coffee or smokes or gas, everything for this month. Both of you. If you cant discipline yourself enough to do that you will never have any money left over at the end of the month. When the month is up take a look at where your money is going. most people are surprised at what they are really spending.

Desperate times means desperate measures.  

Answer 6

A couple of things here. As far as keeping track of your finances Quicken is a good place to start. You can buy it any store that sells software or download it directly at www.quicken.com

It will not keep you from spending money in an frivolous way, but if you use it religiously it will show you where it all goes. It may be difficult for a couple to use (I'm single) but if you both commit, it will work.

It sounds as though you are living beyond your means. You need to cut back. Frivolous spending must stop. You'll need to eat out less. Stop buying things you don't need and buy the things you do need on sale only. Shop at Wal-Mart not Macy's or Nieman-Marcus. Drive less and use public transporation whenever possible. Trade in the SUV (if you have one for a more fuel efficient car). Set back the heat or A/C. Buy those fluorescent bulbs. Pay down you debt, don't carry a balance on your high interest credit cards.

That raise of $20,000 is a nice raise, unfortunately a lot of that is going to taxes. I'll be you and your husband are in a nice tax bracket. Keep that in mind when you go to the voters booth this November. One presidential candidate and most in his party has made an ABSOLUTE promise to raise them even more. Don't forget that. Good luck to you.  

Answer 7

You are letting the money slip through you hands with little

buys. You spend money on lattes,magazines,books,lottery tickets,

cigarettes,drinks,candy bars, dvds.cds, (I am guessing here)That is where a lotof people lose their money. I don't know which country

you are in but I would suggest you google "Til Debt Do Us Part"

tv show. This woman is a financial advisor and she has fantastic tips on how to budget your money etc. Her website is free and will show you how to set up a budget, save for emergencies, pensions,holidays

all that stuff. It is geared towards married people who are having problems setting up their budgets.I highly recommend it.

Answer 8

Insanity:

doing the same thing over and over again and expecting different results.

Albert Einstein

    I don't know where to begin.  The short answer is, You spend more every month than you earn.  That is not meant to be sarcastic or trite.  It is the truth.  You need to find out WHY.

    You have all of the answers in front of you but you are either consciously or subconsciously ignoring them.  This is not a technical question.  A budget system is as easy as pencil and paper, I will let someone else answer that.

  The first thing you and your husband need to do is sit down and have an honest talk about your priorities in life.  Your personal finances affect everything in your life.  If you can't save and plan right now, you will have a major problem when you need to have a ready source of savings in a time of emergency.  When you set your priorities be realistic.  

Mortgage/Rent:   Necessary.

Living in a House you can't afford:  Not Necessary.

Car: Necessary.

Rolls Royce:  Not Necessary.  (extreme example but you get the point)

Food to sustain Life:  Necessary.

Eating out for every meal of the day:  Not necessary.

Vacation:  If you can afford it, meaning you will not go into debt to finance it.  This is something you could save for in the future.

When you do this be honest withyourself.  Do you really need 10 magazine subscriptions?  Do you really need to eat out every day?  Do I need that vacation?

Do you have a boat?  If so why?  Jet Skis? Everytime they come out with a bigger or better TV do you get a new one?  New I phone just because you have to have it? Cable TV with 10 thousand channels?  Gym membership that you hardly use?  

This is a top down evaluation of your lifestyle. We don't know how much debt you are carrying or the reasons behind them.  Are you buying things on credit that are not necessary?  

List all of your debts and obligations.

Rent

Utilities

Insurance

Food

Clothing

CC Debt.

Car Payment

Savings Goal  ( This is an obligation to yourself)

All others.

Next write down what is not on this list and you are paying for.

After you have done this, list what is really important to you and what you can do without.  for every item on this list ask yourself.  Is this more important than saving $1,000 a month?  Is this more important than having savings in the bank for an emergency?  Is this more important than having a comfortable retirement?  Is this more important than me working until I am 90 just to survive?  Is this more important than my child's education?

    You will find out what is most important to you in life.   If you make a budget, stick to it within reason and barring one time expenses you could not control ( A sale at Nordstroms is not an uncontrollable event)  You will have no problems meeting your goal.  If you still have problems then you have not made the important decisions in your life.  You are not following through on the obligation to yourself and your family to create a secure future.  

  I don't care how much you make.  After a certain level of sustenance it is not important.  Always spend less than you make.  It is that simple. Don't complicate it.  If you had complete control of another persons finances, meaning you gave them the money for everything they needed, including savings for their future goals.  And they wanted something that would put them into debt or they could not afford or pay for, what would you do?  If you loved them you would say no I am sorry, that is not neccessary or you can't afford it right now.

   Guess what?  You are responsible for your own life along with your husband and family.  You know the right answer.  

This is a lifestyle and priorities issue.  Say yes to your future.

Good Luck.