Crush My Budget

[unlearner]

Alright, r/pfc crush my budget. I'm a serial spender but some improvement has been made. I've picked apart Mint to try and get a fairly accurate view of what is happening. We are a family of 6 but groceries is super high, $1700 was the high water mark but it tends to cycle around $1000-$1400 and definitely trending up. It also includes things like laundry detergent and those sorts of things you tend to pick up while grocery shopping. Gas also has gone nuts, a lot of driving to kids sports and tournaments scattered across the province.

Other notes. I'm actually paid bi-weekly, but prefer to budget based off twice monthly for simplicity and spending control. Child care costs were actually $1200/mo until very recently, they will likely return just at a reduced family discount. Rent is also a family discount. The credit cards/loc are all maxed out from living beyond our means but also single income up until 2 years ago. I am in the process of going through a CP so that will hopefully be reduced to a more manageable (~$500/mo x 60) amount. I've calculated what I should be saving monthly for the bigger items like travel/sports based on last years prices. But the actual saving monthly what I should do mostly isn't happening. We've from what I can tell, stopped the bleeding and treading water over the summer which is the toughest time since it's just my income.

+
A
B
C
D
E
F
G
H
I

1
Income
Periods
Pay per Period
Monthly
Yearly


Monthly
Yearly

2
#1
24
2250.00
4500.00
54000.00

Leftover
523.89
6286.71

3
#2
20
1200.00
2000.00
24000.00





4
#3
12
1400.00
1400.00
16800.00





5



7900.00
94800.00





6










7
Fixed

Monthly
Yearly

Entertainment

Monthly
Yearly

8
Rent

1100.00
13200.00

Amazon Prime

9.24
110.88

9
Child Care

0.00
0.00

Amazon Music

17.91
214.92

10
Car Ins. #1

101.92
1223.04

Netflix

23.51
282.12

11
Car Ins. #2

93.53
1122.36

Disney Plus

13.43
161.16

12
Cell #1

33.60
403.20

Crunchyroll

9.99
119.88

13
Cell #2

38.08
456.96

F1TV

6.67
79.99

14
Cell #3

28.00
336.00

PSN+

6.53
78.39

15

SubTotal
1395.13
16741.56

Nintendo

4.20
50.39

16






SubTotal
91.48
1097.73

17
Debts

Monthly
Yearly






18
LoC
35500.00
400.00
4800.00

Sports/Activities

Monthly
Yearly

19
Visa
14900.00
300.00
3600.00

Hockey - Reg

79.17
950.00

20
MC #1
15783.00
300.00
3600.00

Hockey - Rep

141.67
1700.00

21
MC #2
19653.50
175.00
2100.00

Hockey - Spring

83.33
1000.00

22
Bank Fee

4.00
48.00

Reg - Fastball

33.33
400.00

23

SubTotal
1179.00
14148.00

Misc - Fastball

25.00
300.00

24





Camps

87.50
1050.00

25
Variable

Monthly
Yearly

Lessons

20.83
250.00

26
Groceries

1400.00
16800.00

Hockey - Adult

15.83
190.00

27
Gas

700.00
8400.00


SubTotal
486.67
5840.00

28
Home Phone

8.33
100.00






29
Pets

90.00
1080.00

Miscellaneous

Monthly
Yearly

30
Medical

125.00
1500.00

Incidentals

200.00
2400.00

31
Vehicle Maint.

240.00
2880.00

Costco Membership

10.50
126.00

32
Clothing

200.00
2400.00


SubTotal
210.50
2526.00

33
Alcohol

100.00
1200.00






34
Travel (Sports)

500.00
6000.00






35
Restaurants

550.00
6600.00






36
School Fees

100.00
1200.00






37

SubTotal
4013.33
48160.00

[sup]Table[/sup] [sup]formatting[/sup] [sup]brought[/sup] [sup]to[/sup] [sup]you[/sup] [sup]by[/sup] [sup]ExcelToReddit[/sup]

Going forward, I do need to fund 4x RESP but 2 oldest being the priority. Adding in life insurance for my wife. Too late for me, medical issue already happened and I won't be able to get it for a while at least. I do have a small emergency fund ($1500) saved and I have a DB pension. Wife just started paying into a municipal pension but she's just returning to the work force after many years off. Really, the only big levers to pull I see are getting groceries/gas/restaurants down and pushing my kids into non-competitive side of the sports they play to cut down on those travel costs. Definitely tweaking I can do around the edges. I've also been trying to automate myself out of process since my impulse control is lacking.

But what do you see I'm too blind to see?

 

[asteroidtempo]

@unlearner $550/month on restaurants (on top of $1400/month in groceries!) with 80k in credit card and LOC debt....wild.

Spending that much on restaurants and food in general is for people with a lot of disposable income. You have zero disposable income, you're buried in debt. You're literally eating an extra $1000+/month that could be used to pay down that debt. Those credit card payments need to be greatly increased if you want to make serious headway.

I also think all this travel for sports is not helping your situation. Kids can be perfectly active, healthy and happy playing in local leagues without the crazy travel expenses (likely contributing to high restaurant spending). Can you really afford all the sports-related travel in your situation?

You have to be realistic here, that is a massive amount of debt, and you aren't huge earners. You may have cut back some, but to me this looks like you are still living well beyond your means. If I was in your situation, I'd be making major cuts, starting with: selling one vehicle, local sports/activities only, no eating out, slashing the food spending with better budgeting and meal planning. 80k of credit card and LOC debt is a major financial emergency, and your budget doesn't reflect that. Every non-essential dollar should be going towards your debt.....half measures are not going to cut it.

 

[unlearner]

@asteroidtempo Sports are definitely contributing to the eating out bill and with a family of 6. Eating out one time is easily a $100+. Will have to look at the grocery bill again. But that is with us brown bagging lunches, making dinners from scratch, cheap/no meats and not buying things like dorito's, cookies, other pre-packaged goods that inflate the cost.

But you speak the truth, I need to hear it.

 

[sophiahiddenlight]

@unlearner Try YouTube channel Adventures in Groceryland. She can feed her and her husband for $30 per person per week. Just food. Does this by a number of methods. You can ignore the meals, although most look yummy, and concentrate on technique. Restaurant meals happen when you are doing sports tournaments. I get that. Aren't all the parents tired of spending so freely? Maybe get together for dome cost cutting brainstorming.

 

[theo3]

@unlearner Your grocery bill is more than my mortgage. Boom, roasted.

 

[unlearner]

@theo3 ugh, when you put it like that. =)

 

[simplymidori]

@unlearner You have 50k in credit card debts and 35k on a line of credit and your going through a concemer proposal so that's good. Basically I see gas, sports and travel and restaurants as your largest expenditures. You could do a lot cheaper groceries if you price shopped and bought things in bulk when they go on sale.

 

[olcote]

@unlearner You're doing the right thing by spreadsheeting it out, and asking for help, and the consumer proposal is good. But you've reached grown-kids expenses without the associated savings to buoy those costs. The big two problems: your sports/travel expenses, and your CC debt.

Tough love, you can't afford those sports expenses. From an outsiders perspective, sports at this level are now too expensive for average Canadians to afford. You can cut Netflix, shop sales, and eat out half as often and you're still only saving $380 a month, less than you spend on sports travel every month. You need to drastically reduce your expenses to start saving instead of spending about 16% of your income on debt servicing. That's not an easy decision... do you want to retire one day? Or do you want to keep up the kids sports and travel?

A few other things:

- your cellphone bills are nice and low,

- That gas bill is painful

- Can you cut the home phone? Netflix (even for a while?)

- Groceries can come down, but you already know how to do that

- Your rent is very low and you have no line item for utilities. I understand this is a family discount, but be aware of any weaknesses there. Could rent go up? Are you on the hook for home maintenance or utilities, even into the future?

 

[unlearner]

@olcote Yes, good point on the weakness. It is a concern, shouldn't change but definitely a concern.

You're right on the sports, I've committed them this year though at least. But our intention is to send them with team mates as much as possible to cut down travel/hotel costs. It's on the table though.

At this rate, I might retire at 55 (30yr pension) and pick up a second job and be better off than staying till 60. =/

 

[olcote]

@unlearner Pension is nice, but do you have continuing health insurance once you retired? You mentioned medical expenses. Will you be able to work into your 60s?

Good luck friendo

 

[shapoorjipallonji]

@unlearner Oh yeah, I'm totally going to read all of that and analyze it for you.

 

[mangolover4life]

@unlearner Can the kids work and support their own hobbies/sports?

Can you guide them toward post-secondary with paid opportunities (e.g. co-ops)? E.g. Waterloo offers 6x 4mo coop. UofT offers 16mo internships. It's possible for students to sustain their own living expenses. You wouldn't need to put much in RESP going down this path.

 

[unlearner]

@mangolover4life Not really, the oldest is just getting into real job territory next year at 15.

We know we can't pay for their education, just want to help a bit and support. Interested in the paid opportunities, we're in BC though and I'm fine (and hopefully able to continue) to let them live here while going to school.

 

[mangolover4life]

@unlearner I think SFU and UBC also offer coop programs. It’s 3x 4mo so it won’t completely cover tuition, but it’ll definitely help.

Personally I didn’t get much in RESP (only grant + interest; parents took back the principal) but I was able to graduate with no debt thanks to grants and coops

 

[jeffreyanovero]

@unlearner Every cost cutting measure sucks a bit. But being broke sucks more.

1. 14 years old with a cell plan? Have you never heard of Wifi? Or kids Emergency plans?
   1. I gave my kid my old phone and she uses wi-fi to chat with friends
2. $550month eating out? You know you can pack sandwiches when travelling?
   1. I travel with work (week long trips) and pack sandwiches.
3. with all those sports, why are you watching so much streaming? $91/month!
   1. rotate the subscriptions. Cancel some each year and replace with others next year. That way you can still watch everything; at half the cost.
4. Family of 4 here and my food bill is half that. I do scratch cooking, that means peeling potatoes. You have 4 kids, they can prep vegetables, its normal too teach your kids to cook.
   1. if your kids aren't helping in the kitchen , you'll have enormous grocery bills. When you have 4 kids, its a tough task to cook for everyone, by yourself. So you do the quick foods that cost twice as much.
5. Alcohol needs to be cut. that's ridiculous when you have that much debt.
   1. I did the same, I ended up brewing beer/wine as a hobby
6. Cut the bank fee. It's only $48 but its irritating.
7. That's an insane amount of gasoline. Maybe track where you're driving? You'll knee jerk and say its all kids sports/work, but if you get defensive, it won't solve anything.
   1. Long term, this needs to be cut. Gasoline should be roughly 50% of the annual cost of a car; you're under reporting maintenance and have $0 for car replacement.
   2. That amount of gas is roughly 50,000 km/year. That's a new set of tires every 18-24 months. Likely 5 oil changes. You're likely spending $1000/year on tires, $200-400/yr on oil and $400 on required maintenance. Hopefully your cars never actually break....or need replacement

You have cheap rent. You don't pay Electric, gas, water, property tax, home maintenance, internet; that's $1000 for me. Essentially, you're living like a mortgage free person.

Car replacement is also a blinding hole. You drive a tonne and have no money for a replacement. Both your cars are getting into high mileage and you have no money for major repairs.

 

[unlearner]

@jeffreyanovero

1. Yes, she has my old phone on a public mobile plan. I refuse phone contracts as a matter of principal.
2. We should do that, we do pack snacks and things now.
3. Cost of the cheap rent somewhat. Feeds the other generation. But can be trimmed.
4. We're on track for closer to ~$1k this month which is an improvement. We've done our big shop for the month already. Our quick food is usually pasta + sauce.
5. This is how I drown my sorrows.
6. It goes when/if the CP is approved. Tied to the bank with the LoC.
7. Sports, work, and a number of 300-500km trips over the summer that shouldn't be happening over the winter. It should come back to ~$400.
   Your car point is valid. When I was putting together this budget I definitely noticed we are a car repair away from screwed. I do some of my own work and handy, but that can only get you so far. Buddy mechanic that helps but I'm running on borrowed time.

When I think about it. It seems like us as a family doing less would free up money/time/resources to do more.

 

[childofgodforever]

@unlearner Been in your situation before. Here are my first thoughts for having been through it.

You're focussing on the macro details, you need to go into micro details.

Step 1, make a budget. That's done.

Step 2, pay off debt. You need to get that done.

You're talking about putting money in a RESP but you have 85k worth of debt. In your current plan, you'll never pay off the debt, you'll be living with it until you die. While I understand school is super important, eliminate your debt and use whatever money that was put towards debt to help your kids with their tuition after.

Taking care of that should be your #1 priority.

Looking at your budget, you have 523$ leftover every month, you should use that to tackle your debt. My suggestion, use the snowball approach, meaning clear out your lowest debt first (regardless of interest) and once done, use the money that went towards the first debt to clear out the second. Repeat until done.

Assuming a 20% interest rate on your CCs and 14% interest on your LoC, putting that extra 523$ towards your debt using the snowball approach will clear out all your debts after an 89 months period (7.5 years). This sounds horrible, but it's much better than dieing with 85k worth of debt.

The above assumes you don't cut any other areas of your budget. I would also look at any "nice to haves" and cut those and put the savings towards debt. Here is what I would cut:

- Alcohol (saves 100$/month) - I don't see how I could afford alcohol while in debt

- Amazon Music (saves 18$/month) - You can get free music on youtube, spotify free, etc. Paying for this is ridiculous. No amount of convenience would be acceptable while in debt.

- Netflix premium downgrade to basic (saves 11$/month) - You already have DisneyPlus, Crunchyroll and Primevideo (through amazon prime). There is absolutely no reason to have Netflix prime. I understand kids will argue who gets to watch what, when, but it is what it is. You'll have to deal with 1080p instead of 4k while you are in debt.

Those are easy savings totaling 129$/month. You're not yet looking at your other "fun expenses". Assuming the same numbers as above, applying that 129$/month towards your debt clears it up in 80 month (6 years 8 months).

You haven't changed much of your lifestyle and saved 9 months on repaying your debt. Once done, you will not have 1827$/month to put towards savings/kids/fun/etc.

If I were you, I'd do more drastic changes to get this down to under 3 years (no restaurant, no travel) but I know how hard that is when you have a family to provide for. Telling your kids they will eat rice and beans for the next 3 years isn't something any parent wants to do.

TL;DR, pay off your debt. Once you're done, worry about the future. Any extra money should go towards debt.

 

[unlearner]

@childofgodforever Thank you. The excessive streaming is more that's a bit of a trade off for the super low rent price. Multigenerational family living. =) But it can still be trimmed back. And you're right, with the sports coming back online for the fall there is zero time to actually watch most of it.

My general plan is to offload travel and send the kids with teammates and pay their share that way. Being on an island it's almost always a $300/round trip just to get off the rock.

Alcohol can go, CR/Prime can go, more will go. I do expect fuel to come down to roughly $400. The last 3 months were excessive with plenty of 300-500km practically day trips happening.

CP should take care of a good chunk of the debt. But that does know good unless I have a handle on the rest.