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weekly or monthly budget after paying trustee and bills?

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  • Question: weekly or monthly budget after paying trustee and bills?

    Curious what is everyone's monthly budget after paying your trustee along with all your household bills? i have 1957 per month left over. that equals to 489/week. this sounds like a lot but doesn't include groceries for a family of 4, hubby's weekly commute, gas, clothes, school supplies, dog food, entertainment, birthdays, christmas, vacation, car repairs and maintenance (2 vehicles), inflated air conditioning bill in the summer...


  • #2
    You don't want to know as everyone is different. Mine was about $5,000 after paying the Trustee $7,000.

    Your amount seems low, but this is why I wrote that you don't want to know what others have remaining. It's a function of their income combined with the allowed expenses. For example, I had two cars so I received a vehicle ownership allowance of $988 plus an operating allowance of $804 for the two cars. That's $1,392 right there. The actual payments for the cars totaled around $300 after cramdown and the re-amortization forced by the 5-year plan. That means $1,000/month I had for my car "operating" expenses (which of course was used to balance other costs).

    My non-mortgage expense (for heat, cooling, water, electric) was $504/month which technically wasn't enough but I made it work. For the summer, when the A/C bill was $400/month, I just had to save in the cooler periods when the bill was $200/month. Dealing with these differences is extremely important and you must save the difference in the winter here in Florida!

    My food. clothing and miscellaneous for four was $1,370 for the month. My total allowed expenses were around $7,000/month (but did include car payments but not mortgage payment)

    Now, I know what you're thinking... you're paying too much.

    Yes, it appears that having only $1,957 a month after paying the Trustee is not enough for a family of 4 since a family of 4's allowance for food, clothing and miscellaneous is $1,650 a month. When you are that close ($307/month) then this means that you are either trying to save property that you cannot afford, or your income simply doesn't support the property that you have.

    If your mortgage payment is high then that will eat more into your allowed expenses and nothing will ever save you from that. If you have a significant number of arrears that you are paying in the plan, then unless you have significant income, nothing will ever save you from that. If your income doesn't support the number of cars (or other fixed installment debt) then nothing will ever save you from that.

    I first tried to keep two homes, but it just simply did not work as there was no room for error. Once I rid myself of the second home, I had the money to actually afford the home that I kept plus my UST allowances in full.

    Entertainment, birthdays and Christmas must be tempered.

    Despite the desire to go crazy, you're just never going to ahve the same money to splurge on those things. That is discretionary funding and the simple fact is that you can't rely on credit to overcome this type of discretionary spending. You may not be the type who would use credit to purchase things in these categories, but this is typical and precisely the type of spending on credit that gets people in trouble. You'll need to find creative ways as I did. We purchased annual passes to the Theme Parks and that saved a load on "entertainment" expense. Birthdays were tempered and not extravagant. Christmas was subdued with one major gift per person and more concentration on necessities (clothing not toys).

    Repair and Maintenance. You must save money.

    Life happens and you'll need to save monthly in order to overcome Life's little challenges. An inability to save, whether it's an income issue or inability to save and budget, will surely be a downfall. Suffice it to say that those who refuse or are unable to budget will not succeed in a Chapter 13.

    Epilogue.

    To afford two (2) cars means that you should have had the ability to save or spend $2,000/month on the care, maintenance, registration, insurance and payments for those two cars. It seems high, but this is about what the IRS Financial Collection Standards (FCS) show and is the amount the Trustee uses ($1,957/month) -- it's higher in some parts of the Country based on operating costs.

    To afford a family of four (4), you need at least $1,650/month to be able to feed, reasonable clothe, and provide personal services (laundry, personal products, etc) for that family of four. This doesn't vary across the Country.

    To afford a home for that family of four (4) you should spend no more than 31% of your take home pay for that home/shelter. Actually, try to make it 25% so that you have a cushion. If you're paying over 50%, then you are in trouble unless you earn over $150K a year, have an effective tax rate of about 25% (or less), and the house payment (PITI) is $5,000/month or less.

    There is just some basic expense math that can be performed to see if someone is living within their means while being able to save.

    (This should probably be in a sticky and titled "How To Survive Chapter 13: What Life Really Costs"
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      Thank you for the very great summary! I really enjoyed this- it was helpful/supportive. So what you're saying is I won't be too bad off once my chapter 13 is discharged!

      Comment


      • #4
        I think your numbers are pretty tight for a family of four (4). You'll have to keep to the budget and watch over-expenditures very closely.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


        • #5
          justbroke - I agree with what you wrote above being a sticky. It is great information!!!!!
          Filed Chapter 13 - 07/20/12
          Discharged 8/2/16

          Comment


          • #6
            Originally posted by justbroke View Post
            I think your numbers are pretty tight for a family of four (4). You'll have to keep to the budget and watch over-expenditures very closely.
            i have 2k after paying trustee and household expenses.

            Comment


            • #7
              Does anyone recommend a budgeting website?

              Comment


              • #8
                You could try Every Dollar by Dave Ramsey. The budgeting tool is free and actually might be very helpful?

                Comment


                • #9
                  I just signed up for "You Need a Budget" after seeing another user mention it here. They have a 34 day free trial. I have played around with it a little bit, but I think I am already confused by it / possibly doing things wrong. I also think that it would work better for people who have regular, predictable income. We don't have that ~ which is a large part of why we are here in the first place. Budgeting is going to be a real challenge.

                  Comment


                  • puppiesrock
                    puppiesrock commented
                    Editing a comment
                    Thanks! For whatever reason I do not like Dave Ramsey. Also - he is against filing for bankruptcy yet he did it.

                    Looking at YNAB and its soooo confusing!!

                • #10
                  What do you mainly find confusing about it? I am sure there are a lot of features I haven't used or figured out yet, but I've got the basics down, and I've found it to be a great tool.

                  Comment


                  • puppiesrock
                    puppiesrock commented
                    Editing a comment
                    i can't seem to reconcile things. it doesn't show my updated bank amount. i reconcile it by entering in things and then all of a sudden there are items that import? i am losing my mind. i had to do a fresh budget and start over again. i told hubby not to enter anything if he swiped, only if he used cash. see how that works.

                • #11
                  Hmmm, well... A couple of thoughts.

                  1) Yes, the bank account import is a little slow... but the transactions all DO show up I'd say within 12-24 hours of them occurring. So I am not entering any transactions. I wait for them to show up, and I assign them to a category in my budget.

                  2) We haven't taken out any cash since I started using this program. I always count my husband's cash as "food" because that's primarily where it goes (even before using this program, I've been tracking expenses for almost a year). So I guess when we do take cash out, I will assign it to a category -- and then if some of it ends up getting used for something else, I would go back and "split" that transaction. I'll find some way to straighten it out... this doesn't happen very often, so it won't be a big deal for me. We use debit for most things.

                  Did you see I started a thread here for YNAB? I don't know how much help it will be -- but I'll link it here, in case you want to check it out. bankruptbull posted there about a reddit forum you may find helpful. I'm tagging him here, too, in case he has any more tips for you. I'm a newbie to the program, for sure.

                  http://www.bkforum.com/forum/before-...-need-a-budget

                  Comment


                  • puppiesrock
                    puppiesrock commented
                    Editing a comment
                    Thank you. That is so reassuring. So that is definitely what my downfall was. my husband takes out cash quite often too. but it shows up in the account so i can assign it.

                    Ok, i will definitely be checking out that reddit forum.i am just started and we already went over our food budget for the week but i wonder if that will peeter out as the month goes on.. its a new way of budgeting and i'm all over the place bc i'm trying to figure out how to be successful on this. i feel like i owe it to myself!

                • #12
                  I should also mention, now that i see what i'm spending due to this zero budgeting right off the bat - we don't eat out anymore! LOL

                  Comment


                  • #13
                    Originally posted by puppiesrock View Post
                    I should also mention, now that i see what i'm spending due to this zero budgeting right off the bat - we don't eat out anymore! LOL
                    It seems like such a waste of money, doesn't it? It's a real change in mindset, for sure.

                    I have one transaction on my tracking spreadsheet for a restaurant in July -- right before we filed, when we had some cash to spend. We spent $17.76 letting the kids get Rally's. I knew then, and I know now ~ that was it for awhile. Probably a long while.

                    Comment


                    • puppiesrock
                      puppiesrock commented
                      Editing a comment
                      Yup. Now we grocery shop and really plan out the meals. I'm trying to get hubby to brung lunch in. Baby steps.
                      So question. I click on IMPORT and nothing. My balances is still the same as it was from two days ago. I have 10 transactions. Do i click on reconcile? I'm afraid to do that bc that's what got me into the mess of a budget before and now i'm starting over. Those classes they offer do not help with this learning curve...
                      do i still wait for them to import?

                  • #14
                    I'd still wait for them to import, because there's not much else you can do. If the lag time ends up bothering you too much, then your option would be to un-link your bank account and enter everything manually I guess.

                    Comment


                    • #15
                      ok i'll wait. i feel like i am spending my money more than i should bc of this. :*(

                      Comment

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