ALLCASTLE PRINCETON + work

Planning Changes: Expenses

In Something has to Change, I shared with you the financial frustrations we've had recently, and the realization that we need to make some changes. I do so appreciate your comments and encouragement. I was feeling rather hopeless about our finances when I wrote that post. Putting it out there, talking it through, and getting some feedback gave me a new energy to tackle the beast called debt.
Many of you suggested the resources of Dave Ramsey. We are familiar with his concepts. My husband listens to him on talk radio, and of course many blogs I read refer to him. We checked into a class being offered by a nearby church. The price of materials was more than we are willing to pay, but I will be looking for his book on my next trip to the library.
Shuffling some of the debt was also suggested. We have done that in the past, but almost all the credit card debt is at low rates. It is something that we are still watching though. This suggestion did give me another idea.
Regular readers have read about the duplex we still own about four hours from here. Long story short, we are upside down in that house. When it is fully rented we make a small profit. We've had a hard time keeping both units rented. When they are not both rented, it is a drain on our budget. Repairs throw the budget for a loop, and basically that whole situation has become a huge stress.
We've decided to treat the rental as a business. We are going to open another checking (free one) for that property. There will be three accounts for that house then, the mortgage, line of credit and checking. The line of credit can be used when needed to cover expenses for that house. It doesn't get rid of the problems or the debt from that house, but it will take the up and downs of it out of our monthly budget. That will save me a lot of stress.
Several others suggested cutting expenses. This would also be my first advice to anyone in a financial crunch. There usually is a lot of room to cut discretionary spending, food budgets, and services. But as some long time readers confirmed we have cut and cut and cut again. We really are pretty much are down to the basics here. But, even so, there still are a few more things to cut.
We cancelled our trash service. We have considered sharing a trash service with my parents for some time. All food scraps go to the animals. Paper is shredded and used as animal bedding. Metal is sold for scrap. Plastic is recycled. Cardboard is burned. That leaves very little trash left. Between the two house we only take out one trash can. My parents offered to pay for the trash, and we cancelled ours. Savings: $19 a month. $228 a year.
We will be switching my cell service to my parent's plan. They can add my line for $10 a month. Already on the lowest plan available, I am paying $45. I use too many minutes for prepaid. Tim's phone is paid for by work. We have no land line. Savings: $35 a month. $420 a year.
Other cuts we are considering included the XM radio. To many this may seem a no brainer for the chopping block, but for someone who is on the road the better part of the work week in remote areas, the XM becomes pretty important. Cutting it is still under consideration. The potential savings is about $250 a year.
I am also looking closely at our homeschooling activities. We are involved in two regular activities. Neither is very expensive, and we will continue these activities. In addition to those activities, there are field trips, get togethers, classes, and cultural activities that pop up on the radar every week. Most of these also are inexpensive, but they do add up. There is also the consideration of just being too busy. Busyness comes at a cost also. I need to put myself on a time and money budget for these activities.
Cutting expenses is the first place to start in a financial crunch. We've cut and stretched, and still the ends do not meet. Something has to change on the income side. More on those plans later this week.

Of interest to those of you in similar places or those trying to avoid getting in this predicament, the Carnival of Debt Reduction is up at No Debt Plan.

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Planning Changes: Expenses + work