Monday, July 27, 2015

Budget Assessment 5: Debt and revised budget

To rehash the previous assessment points, we were trying to come up with enough to cover the following:

$260 for pre-school
$140 additional for medical expenses/ savings
$150 for IRA plan

So far we’ve cut $45 from utilities budget by enrolling in balanced billing, getting water leaks fixed, and other energy saving techniques. We are working on cutting at least $30 in the diaper funding by starting potty training DS B (who proudly made his first pee pee in the potty this past weekend). We’ll be tracking our grocery and fun money expenditures closely over the next two months and seeing how we can reign in our spending or possibly even make cuts. And, for now, the $8 Netflix stays…. Got major pushback on proposing that cut!

The last budget area to assess is our minimum debt payments. Our minimum payments are as follows:
$205 consolidation loan
$183 to my parents
$225 my student loan
$210 S’ student loan
We’ve received all of the new medical bills from DS L’s seizures and owe $1,909 to many different organizations so there are many different minimum payments.

We’ve decided to put the two student loans in deferment and use my anticipated end of year bonus to cover the accumulated interest. This frees up $435 in our budget to cover the pre-school and medical savings. We’ve negotiated with two of the smaller medical bills organizations to get payment plans set up and will owe $114 for the next five months to pay those two off. There are four additional accounts that are all under the same parent company but since they are different departments, they cannot be combined and the minimum payments are unaffordable. We have been advised to let these four accounts go into default at which time they will be sent to the parent companies central billing department. Once the central billing department has all four, they can combine and offer more flexibility in repayment length. I’m anticipating this process will take several more months and hopefully our first payment will be due after we pay off the first two bills.

The adjusted budget we’re working towards is as follows:

$1,170  29%      Rent & Utilities: gas, electric, sewer, water
   $580  15%      Insurance: Health, life, disability
   $270    7%     Cars: insurance and fuel
   $135    3%     Tech: phones, internet, Netflix
   $620  15%      Household: Groceries, diapers, toiletries, pets, etc
   $180    5%     Extraneous/ Fun: haircuts, clothing, dining out, projects, gifts
   $200    5%     Medical/ Savings
   $260    7%     Pre-school
   $585  14%      Debt: minimum payments
$4,000              Total after tax income

The goal is to have fully implemented all of the cuts and re-organization from our assessment by the end of this quarter, September 30. We will need to re-assess at the end of the year when our loans are close to coming out of deferment. For now, retirement savings is still off the table but is a high priority once we get a handle on this medical debt.

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