BBP REAL LIFE BUDGET | Budgeting When You Don't Make Enough

welcome to the budget mom youtube channel i'm kamiko love from thebudgetmom.com today we are doing a real life budget for jillian [Music] now this is the first real life budget i've done like this and i'm going to say it right now side note um there's going to be a little bit tough love with this one here and i really struggled on whether or not i wanted to share or show this budget this is all about budgeting when you don't make enough and so let me go into a little bit of jillian's history so she lives in grand rapids michigan with her husband she has a full-time job and a part-time job she currently is a billing and administrative lead at a trucking company and then she drives the airport shuttle on the side for shuttle service so they share and combine finances but recently jillian's husband lost his job and he lost his job a couple weeks ago from the time that she sent her this information she he hasn't had any income for weeks so he did apply for working at usps but he applied for that job on september 8th and they have yet to bring him on and actually give him income so it's almost been almost 2 months since he applied for that and he's still not making any income they still have not brought him on so he got a side job working with his wife doing the airport shuttle service that he makes one to two hundred dollars every week now when i first got jillian's information when i started working out the numbers it was very apparent right away we were in the red and we were in the red by a significant amount so what do you do any single time there has been a loss of income when it comes to your budget whether a spouse loses a job maybe you have lost a job so today it's going to be a little bit different for a real life budget i want to show the process of what it looks like to get down to a bare bones budget using the information jillian gave me so it's going to be different from showing just the budget calendar and the paycheck budget tracker we're going to be looking at the bare bones budget and the process that i went through and where we ended up after we cut her expenses so the first step in the budget by paycheck process is figuring out your why your motivation the reason behind you being on your financial journey and wanting to become better with your finances now jillian's is all about building her dream home becoming debt free and starting a family now a little on her back story so her and her husband bought their first home it's a mobile home inside of a mobile home park in 2018 she says it was a nightmare so they didn't have the five thousand dollar down payment so her parents gifted the five thousand dollars to them for their wedding now they couldn't get approved anywhere else because they both had really bad credit but they desperately wanted to get out of her parents basement so we took the first and only place that we were offered they didn't understand anything about mortgages or how they work so we just signed without really doing our homework now fast forward to today a couple months and we realize that we are pairing paying nearly 13 interest because our credit is so bad their house journey has been an emotionally and financially exhausting so we are so ready to put this life behind us and be able to build our dream home get out of debt and start a family so that's a little bit of their back story now when we look at their income this is jillian's income she has she gets paid weekly 500 a week from her full-time job and she makes anywhere between 80 to 200 with her side job driving the airport shuttle service so you can see here these are her paydays these are her pay amounts so what i did is after looking at her income now keep in mind remember her husband did pick up a part-time job with her he makes anywhere between one to two hundred dollars a week that is not on this but i want to mention it this is their bills now i'll explain the pink here in a minute their bills are a little bit weird some of them because some of them they're paying every friday so every week so they have and also their rent and housing situation is a little bit weird because they have a lot rent the lot that which their mobile home sits on is 550 and then they're paying mortgage on their actual mobile home which is 636. so they're paying over a thousand dollars for their housing they have spotify netflix hulu disney plus discovery plus they have their car insurance comcast amazon subscribe and save now her phone bill is paid by her mom which she then pays her mom back every friday for her phone bill and then a car repair bill that her mom paid for they have apple they have a puppy care plan now i wasn't quite sure this headstone for father-in-law i'm they're paying 100 a month for that i'm not quite sure what type of plan that is or if they have something set up with their family or what consumer energy is your utilities no you see two consumer energies one is paid weekly because they're past due on their utility bill they're currently paying 86 dollars a week for past due payments on top of the 226 every month for their current payment for their utilities their puppy has pills he has to take which is a hundred dollars a month and then they have xbox live this is their variable expenses they're doing groceries gas dog food clothes gas food nails scentsy oil changes and eyelash extensions for her now she did put a note these are not all necessary every single month for example we have not bought scentsy in about a month but i put it on here because it's something we like buying so she did put a note that this is the scentsy and some of the things aren't every month but she did put it in her budget because she hopefully one day wants to be able to spend on those things now let's look at their debt their debt is what worries me the most um so they're paying remember she talked about both of her and her husband's credit scores being very very low bad credit scores so they took out a car loan a 2012 chevy traverse about 9 300 is what they owe at about 23 interest now if it were me i would sell the car i'd get rid of it because their minimum payments only covering interest they're currently not making any headway on paying off the car itself they do have a toyota 4runner um it's 2500 00 interest i think this might have to do with the car repair i don't think this is for the car itself but i'm not 100 sure on that they have a credit card a loan and two more credit cards that they are working on the next debt that is a little bit uh worrying is the 4300 at 21 interest now if it were me i would see about selling the chevy if not and in the meantime i would work on priority number one would be the chevy traverse the mcu loan at 21 interest would be my second priority i would then work on this mcu credit card at 13 interest or excuse me the credit one credit card 15 interest than the mcu credit card and the visa credit card i like to pay off my debt and priority of the interest rate highest interest rate i pay off first because it's going to save you the most money in the long run on the life of your debt some people like to pay off using the snowball method which is paying off the smallest balance first which would then be the one thousand dollar credit cards one of the debts that is not in this is their mortgage they do remember they bought that mobile home and their mortgage isn't on here we're not quite sure what they own that i just know it's a high interest rate as well they do have some savings goals it looks like their dog needs acl surgery a house down payment and an emergency fund currently they have nothing saved for these goals now what i want to talk about very quickly the first thing that i do when i get a community member's information is i take their income minus their expenses so when i looked at their income which is right here so i took the two about the two thousand dollars a month so for instance i looked at november november is what i looked at so i took the one two three four she gets paid four times in the month of november that's two thousand dollars she gets paid one two three four another four hundred dollars in the month november for her side job so that's twenty four hundred dollars then i added in the hundred dollars a week that her husband gets for his side job so that's twenty eight hundred dollars of income now when i subtracted it from her fixed expenses and her variable spending we were immediately in the red so here's what i did i use what's called a bare bones budget worksheet to start cutting and minimizing my spending because one of the things you have to ask yourself is when you're in the red with your budget is it an income problem or is it a spending problem and one of the ways that you can tell is by simply going through your spending cutting out any unnecessary is spending are you still in the red if you're in the green and have what you need and want for your financial goals then it's a spending problem but if you literally get yourself to a bare bones budget like this and you are still drastically in the red it is an income issue at that point because that means no matter what you do with your expenses and your spending you're still coming up short when it comes to your income so like i said i use the bare bones budget worksheet we're talking about november so what i did is i wrote down all of her fixed expenses and that includes all of her minimum debt payments as well so these minimum debt payments here because don't forget you want to keep up on your debt payments each especially the minimum payments so when i did that all her bills equal three four six six and do you remember how i told you they only make twenty eight hundred dollars a month so i said okay let's cut out and get jillian down to a bare bones budget and see where we're at and how how close we are to matching our income to expenses so everything in orange is what we're going to keep because you have three decisions you can make with your spending and your expenses you can keep cut or lower okay so if it's an orange i kept the expense if it's in pink i cut it out completely and if it's in blue i know that they can probably lower that bill so the things i decided to cut from jillian's and you can see i was able to cut a lot we cut out netflix hulu disney plus apple spotify xbox live amazon subscribe and save i even cut out her monthly amount that she was paying for a puppy care plan discovery plus and then temporarily cutting out the hundred dollars a month or spending on her father-in-law's headstone now because i don't know exactly what that is for if there is a contract if they are working on some type of um plan with that or or if it's just among the family but it would be my suggestion if they can to only temporarily cut this expense so they can save themselves 100 a month even cutting out oh and then comcast is 165 a month for them going to comcast switching providers whatever need be to get that lowered even with cutting out all of that so i was able to cut out 256 dollars from their budget which gives me a new expense total of 30 to 10. now remember i said the least amount that they expect to make every month is 2800 so we're still in the red [Applause] so i investigated further here's jillian's income here's her husband's income for the month of november 2800 her expenses when i cut everything that i could was 30 to 10. so if we take her income minus expenses were negative 410 however though that does not include the variable expenses they need to live gas food so when i went through her variable expenses i cut out everything in pink because when you get to a bare bones budget and you're looking at your spending you don't want to just cut and get to a bare bones budget on your fixed expenses you also want to look at your variable spending so remember a bare bones budget is all about paying only what you need to survive your necessities it's a temporary budget it's what you use in the time of an emergency or a need when you have loss of income when you lose a job whatever it may be so we're cutting out clothes and shoes eating out nails scentsy now they're currently doing 50 to 60 a month for oil changes i don't know about you but i only get oil changes on my car once every three months so they should if they truly have been saving or spending whatever they're doing with the 50 to 60 every single month maybe that's a car maintenance type of thing but we need to cut it out temporarily and then her eyelash extension fills that she's paying 70 to 90 a month for we need to cut that out remember bare bones budget is only our necessities so we're left with groceries gas dog food and then gas for their stove bare bones even with cutting down their variable spending which equals 730 we're negative 1140 dollars so let's talk about how to move forward knowing this information okay so after looking at the bare bones and working through each one of the expenses and spending and deciding cut keep or lower and we got down to what our number is it's negative four uh negative 11 40. we know this is an income issue right now i know that her husband got hired with usps on september 8th but it's been two months and they still have not brought him in i'd be calling them every single day and after three weeks two weeks i would have went out and found another position that i could apply for we know this is an income problem now jillian has a full-time job and she also is working the side job so it'd be my recommendation that her husband looks for additional income what does that look like that could be applying at fast food restaurant for a full-time position that could be driving for uber or uber eats i know ryan's boyfriend did that for a short while and they were able to make some some decent money with that that means selling what you can around your home that you're no longer using that could be using other skill sets and maybe doing things on the side as your own employer there has to be some income brought in here and it goes beyond just sitting back and waiting for usps to bring him in right and like i mentioned side note this is tough love but you have to do what you have to do when you are in the red you cut down everything that you can and once you know it's an income problem you need to stop looking for options and opportunities in your life to bring in more income yes you are capable of making more you are capable of finding a side job or making more income you just have to be willing to put in that work to do so and first thing i would immediate apply for ubereats or some type of delivery service like that because who knows at this point if usps is even going to bring him in and if they bring him in guaranteed it's probably for seasonal work here's another opportunity right now i know that everyone is short on workers everyone is looking for workers right now it seems like every industry every place out there is short on workers i know amazon is currently offering a three thousand dollar sign on bonus for applying and getting higher to amazon so that could be an option that three thousand dollars could probably really help them get caught up on some of these bills especially maybe that past due utility bill that they owe so looking at opportunities like that instead of sitting back and waiting for usps to hand you that position in that income it's being intentional and it's about taking you personally taking that step to do what you have to do to cover your living expenses especially when we're talking about just a bare bones budget you have to take that incentive for yourself nothing's going to be handed or given so if it were me after two weeks of usps not bringing me on and me calling them every day i would have went out and got found some additional ways to make some extra income whether that's ubereats and driving for half the day or whatever that may be because even an additional 400 800 a month could help here we're at the point where any amount could help it means the difference between not paying a necessity bill and paying a necessity bill now currently their food budget i think is that is a we looked at is about 400 a month i mean yeah 400 to 500 a month you can cut that down even lower this is in the time where hey they're i'm not gonna lie there was times when i i had to do this myself there is no shame in this first let me say that right now there's no guilt and shame in being in this position okay it's temporary you work through it and you come out on top but you got to do the take the incentive and put in the work so i want to say that right now there's no shame in being in this position however with that being said i was in this position just six years ago i had to make the decision to either put food on the table for me and my kid or pay my utility bill and keep my lights on and sometimes i had to choose and i'm not gonna lie there are a lot of days where i was so thankful that his school offered free lunches that was a blessing for me so what does this look like going forward how do you budget something like this when you're so such in the negative with such a high negative amount you pay your priorities so it's taking looking at those priority necessity bills that i kept and paying the priorities out of those okay you focus on your major priorities your four walls keeping the lights on heat in your home having a place to live keeping a roof over your head now their transportation can be altered a little bit right they could choose to sell a car if they wanted to now i don't know how upside down they are on that car loan but that's over nine thousand dollars but it needs to be an option that we look at they discuss as a married as a married couple does it mean taking public transportation saving on gas that category could be altered a little bit you pay what you can when you get your paychecks you take care of your four walls the things that you absolutely need to live and you go from there and hopefully the husband is able to bring in a little bit more of sight income and the only reason i say husband is because jillian already has the full-time job and the part-time job i don't know how many more hours in her day that she could take to work another job or find another job so it's where you come together and you work as a team and you take the incentive to put in the work and to put your foot forward and finding an additional additional income because you know now that this is an income issue so anytime you are working with a job loss or a loss of income don't don't feel shame around your position you do the work you get yourself down to a bare bones budget is it a spending issue or is it an income issue and you go from there but once you know whether it's one of those two things you're able to take the appropriate action to benefit you the most when it comes to your money now mine was an income issue i got myself down to a bare bone budget what did i do i took my love of photography and i turned it into a side job i shot real estate photography on the side because at that time my son was only one and i had to carry him on my hip because i couldn't afford daycare during the week i sold things that i no longer needed around my home i did what i needed to do and i was very blessed i knew someone in the real estate industry who he was a realtor that took his his chances on me i had no no idea about real estate photography but it turned out my my house pictures turned out okay and it worked out and i did that for three months until the budget mom happened in my life so do you have a skill set that other people could utilize and pay you for so this is the real life budget i know this is something that we don't usually talk about but it's important it's important it's a hard conversation isn't it it's an uncomfortable conversation but one of the number one things that i wanted to mention is getting yourself down to a bare bones budget but also saying it's okay this is okay there's no shame around this so if you found this video helpful please like it and don't forget to subscribe figuring out your motivation your why so toby [Music] you

Channel: The Budget Mom

Views: 355,141

Keywords: budgeting tips, budgeting your money, debt free journey, budgeting 101, paycheck budgeting, paycheck budget 2021, paycheck budget breakdown, paycheck budget book, paycheck budget binder, budget with me budget by paycheck, budget with me low income, budget with me 2021, the budget mom, pay off debt on low income, how to budget, budget by paycheck method, budget planner, budget by paycheck workbook, real life budget, zero-based budget, budgeting tips for low income

Id: Kgi7T544_jg

Length: 24min 1sec (1441 seconds)

Published: Sat Nov 06 2021