Need advice on possibly cutting some expenses
I'm trying to cut expenses again to pay more on debt. There are two areas I am struggling with:
1. monthly donations - $10 dog rescue, $5 goat rescue; I currently have these payments taken out automatically, they are optional monthly donations, I know the rescues do a great job and need the funds, but I'm $8,875 in debt on a $17,808/year income. Should I be donating to these rescues while I'm trying to pay off my debt?
2. family wedding - $100/month, the wedding is in the Fall of 2020, it is out of state for me which means airfare, hotels for at least part of the week since I'd fly to MA to my sister's and then go to upstate NY for the wedding, meals, spending money, wedding gift. I'm looking at $1,500 to do all that. The age old debate about family event vs. paying debt. I am not a main person in the wedding. I am peripheral at best. I love my nephew and he's special to me but he and I are not close. I am incredibly close to my sister. I have no issue telling either of them that I can't afford the trip but I also don't want any hurt feelings. Do I save $100/month for the wedding and put off being debt free or go to the wedding?
If I cut out all the expenses I plan to cut, including the wedding, I'd be debt free by the winter of 2020. If I do the wedding I'd add half a year to my debt free date. I really want to get out of debt so I don't have to make these painful decisions all the time. I would have to be pretty brutal about my finances to do the $300 extra a month on debt but I do better when it's all or nothing instead of spending in moderation. What do you think? Thanks for any input!
Here's my full budget:
$1,484 - monthly income
$259 - monthly minimum debt payments
$435 - rent
$121 - Verizon
$61.50 - internet
$41.50 - auto insurance
$20 - renters insurance
$15 or $0 - donations (cut completely)
$6 or $0 - Amazon Prime (cut completely)
$1 - Apple iCloud
$120 - $160 - groceries (try to cut back)
$20 - laundry
$40 or $0 - spending money (cut completely)
$5 or $0 - pup treats/donations (cut completely)
$8 - transportation
$10 - RX & OTC meds
$44 - $0 - office supplies (cut completely)
$130 - $20 - hair cut/color (cut back to $20/month max)
$0 - household stuff (cut completely except absolute needs)
$0 - clothes & shoes (cut completely except absolute needs)
$0 - medical supplies (cut completely except absolute needs)
$6 - Microsoft Office
$10 or $0 - nail/foot care (cut completely)
$4 - life insurance
$6.50 - YNAB
$44 or $0 - Eye exam/glasses (cut completely)
$100 - wedding (cut completely, send wedding gift at time)
$1,175 - set expenses
$309 additional available to put toward debt if I cut out:
shelter donations, Amazon Prime, spending money, pup treats/donations, office supplies, salon hair cut/color, household stuff, clothes & shoes, medical supplies, nail/foot care, eye exam/glasses sinking fund, wedding sinking fund
There are a lot of items that you would fund if needed....how will you feel if something happened and you needed all the 300 in a particular month for medical or to replace something that broke? Also, I know from your journal that the animal charities are very important to you.
Would it work for you to put 250 toward debt, leave 5 for one of the animal charities, 5 monthly for a gift for the wedding, and put 50 into a fund you could draw on only for those emergencies you listed?
Cutting spending money completely is a sure way to make yourself so miserable that you just give up on debt payoff.
Do you have diabetes or other condition that may cause circulation issues? If so I would not cut foot care.
Can you shop around on your phone? $121/month seems expensive (or does that include paying for a phone as well as the monthly service? - I bought my phone outright and pay $60.XX/month for unlimited calls and texts, 2GB 4G data and unlimited slower data after that, plus free texts and data in 120+ countries (I travel internationally for work a lot). Cricket, Google Fi, etc have much cheaper plans.
I would cut back to the $20/month max on hair (I'm getting my hair cut on Saturday. According to YNAB, last time I got it cut (including full baylayage color) was April 21, 2018. I normally cut 3 times/year and color 1 or 2 times. But right now I'm protesting the fact that my sister won't set a date for her wedding and I need to make plans about when to color and get a defrizz treatment around that date and she's been engaged since June. I'm only giving in on the cut because the split ends are a mess).
Agree with @jenmas that cutting spending money is actually setting yourself up for failure. I just paid off $7,500 in 16 months, could have been a lot quicker had I restricted my spending money or even shopping for things or very small, inexpensive trips that I saved cash for. I was just telling my fiance, I have spent the last year paying off debt with what could have been an amazing vacation fund, and now the debt is gone so lots of vacation money to be saved! An emergency fund is important, too, if you don't already have that. While paying off the $7,500 in debt I acquired an additional $1,500 because I didn't have any emergency fund saved yet. yikes.
Also, as someone who is getting married in 2020, I will not be offended if my aunts & uncles that I'm not close with from out of state don't come. I am already expecting them not to travel. Just be honest with your situation with your sister as she probably has a stronger opinion than your nephew.
is this for TV: $121 - Verizon
If so, I'd cut this and pay for Netflix or Hulu only. I know it sucks, I had to do this after a divorce. But, it really only took a couple weeks to get over it and get accustomed to only having Netflix. Nowadays Hulu has almost every show you'd be missing on cable anyway.
And yes, I'd cut the wedding. You have too many expenses for that right now. Especially if you're not close to your nephew. There are things you have to do to care of you that should come first - your health, eyes,
Also, you're living so bare bones as it is. I feel like having no money to do ANYTHING FUN EVER will wear you down, and it would be better to have that $100/mo from the wedding budget to give you a buffer so that every now and then you can treat yourself.
First, as others have said... Do NOT cut your spending money to nothing. that will make you feel too restricted, and make you want to stop altogether. Maybe reduce it, but don't eliminate it.
Things that instantly stick out to me is phone, and internet. Those both look pretty high, and should be able to be reduced. somebody has already commented about a couple phone alternatives. I'm actually on Cricket, with 2 lines for $70.00/month, with unlimited text, minutes, and 5 GB of data (which I very rarely if ever go over 2GB). And I'm actually looking at shopping around and reducing that further. You can get very nice plans for $25-$30 per line on cell phone.
Is your internet just plain old broadband? or does it include cable? are you able to shop around for a better price there? or are you in an area where there's not much competition among cable companies?
One thing no one has commented on yet (or I missed it?) is the $15 in donations to dog/goat rescues. I think that stopping them for now is the best thing to do financially. It will be hard emotionally because I feel like I need to make amends for some things but I don't want to hurt myself by doing this for the wrong reasons. I did not commit to more than just a month to month decision to donate but I feel committed emotionally. This is a hard one for me. I really want to get out of debt though and I can nickle and dime myself into hundreds of dollars before I know it. That's why I have to be so strict and unforgiving. It really does make me feel relieved to have less available. As weird as that sounds. LOL
What are peoples thoughts on closing accounts but still paying off the debt on credit cards? Or asking for credit limits to be reduced so there is little to no credit line (it would have to be done periodically)? I know it would hit my credit score negatively but my credit score is low anyway and I have a place to live and I have my non-owner car insurance (no car, just insurance for rental s or borrowed cars, and so I don't get whacked with much higher rates for insurance lapse). I'd be okay with the credit hit because I know I can't be trusted with an available credit line! Hard to admit but true. I would keep my credit union credit card which has a low limit ($600) and 0% interest until next February. I'd close/reduce limit on Discover & Amazon Prime Visa.
After seeing everyone's responses here and on another part of the forum I have decided to stop the $10 monthly donation to the dog rescue but to continue the $5 monthly donation to the goat rescue. I feel that I did commit to my donation with them and will continue that donation. Compromise.
I have also decided to not go to the wedding next year. I love my sister and nephew but I will spend zero time with them. I'd rather pay off my debt, by the time the wedding would happen, and then start saving to visit them when I can actually spend time with them. I will also invite my nephew and his finace/wife out here to visit. My sister knows she has an open invitation to visit.
I'm also going to cut all the stuff in bold to zero or cut back as much as I can (as in the case of the groceries). I want to put at least $250 - $300 a month toward my debt in addition to the minimum payments of $259. I know I can do this. I won't be perfect and I'll stumble along the way, but I'm willing to get up and dust myself off and keep moving forward.