Newbie question Budget posted

[kindthatjingles]

Newly divorced and trying to set goals fro my financial future.
When building an EF should I consider the amount of money I get in Child Support?

I do count on the money and things would be super tight without it.

Have enjoyed lurking all these years. I feel like I get better advice from you all then the Dave Ramsey's Suze Ormans combined.

Many days you all just crack me up!

[Gardening Grandma]

I think the answer to your question depends on how reliable the child support is.

If you know, without a doubt, that you can count on it, month in and month out, without any kind of disruption, then I'd say "probably not".

But, personally, I would not want to have to rely on it, so my EF would include the possibility of losing the child support. (Think of the ex losing his/her job)

[kindthatjingles]

Thanks for the reply GG. It is done by income withholding and he has been at that employer for 5+ years. I have gotten it every month without fail. I am coming to realize that makes me luckier than most.

Just trying to figure out my new "normal"

[kindthatjingles]

By the way I handed out to you my first Karma

[motherto2]

welcome Kind! This is one of the first places I turned to a few years ago when I went through a second divorce and inherited alot of debt, so I know exactly how you are feeling. First, how old is your child and how long do you expect to receive it? My kids are from my first marriage, and one thing I've just realized this last year is that after my youngest graduated from HS and the support stopped, things are tough. Mostly because even though the support has stopped for both kids, they are still a part of my household. My insurances, my food and house, help with school expenses, gas, everyday expenses like clothing, etc. My advice to you would be work up 2 budgets, one with the support included and one without. I don't know if you have alot of debt, but definitely figure out the fastest way to pay it down. Then, get as close as you can to a budget that doesn't include the support. Sock that away so that when your child is part out but still part in your house, you will have extra money to help carry you through those times. My kids were fairly young (12 and 9) when I remarried and we had a pretty good income while we were together. We split when DD was just about to graduate from HS and head off to college. My household income (without including my child support, DD's was just about over and DS was 3 years behind her) was cut in half in the space of one day. Plus I was left holding a lot of debt to keep my house. Now 4 years later, all the debt has been paid off (other than my mortgage which went way up after the split to combine the mortgage and HELOC). My kid's father and I each pay $600/mo. for their college loans. I have $ in the EF and a budget that stretches to pay my expenses, but things in this economy are very unstable. I will probably have to go from a 13 mile commute one way to work to one that is about 65 miles away one way in the next year, and with the price of gas, who knows what will happen. You have time, so make the most of it and position yourself to be able to handle things when the support goes away. Good luck, and know that you can do it!

[kindthatjingles]

Thanks for the support. I have two children ages 8 and 4. It has been a long rough road and after 15yrs of a credit score of 750 and never having a late payment, my world has turned upside down. My Ex after the trial was over immediately declared Chapter 11. Creditors don't care who the debt was assigned to just who's name is on it. In my case all was under me because at the beginning of our marriage his credit was poor and I put things in my name. Because all of our creditor then came after me, because of the amount I declared Chapter 7. It was the most humbling experience in my life. I was one of those people who thought it could never happen to me. These boards even as a lurker, was an outlet for me to get the info I needed.

So no debt except for 1300.00 that I reaffirmed on.
I also reaffirmed on my car lease.

I know what you mean about income dropping. Went from a sizable house to an apt. Went from a brand new VW to a Ford Focus and to be honest have never been happier.

I see all the boards about people fighting over money, but other than that, the marriage is great!

My ten year marriage went down the toilet for a lot of reasons but money was a big part of them.

People do not change.

[busymom]

I agree with gardeninggrandma. Do your budget without the child support. Then, when you get it, it's like a monthly bonus! Make sure too that you have a little bit of fun money, even if you have a tight budget. Even something little like hitting the dollar menu at a fast food place can keep you from doing a major splurge on a bad day.

Best of luck to you & your family. Hang in there! It will get better!

[kindthatjingles]

Thank you. I have a great family so I can and will start over and make a success of myself,

I will continue to be bashfull for awhile. Don't know about posting my budget yet. Still a little intimidated by these boards.
Surprised I admitted to the Chapter 7

[Gardening Grandma]

Don't be embarrassed about the Ch7.

I was 25 when I divorced a violent manic depressive. I had no skills, a low paying clerical job and two children ages 3 and 5.

For 18 months, I received a welfare subsidy and food stamps. Yes, it's humbling and embarrassing. I stood at the cashier's feeling eyes on every item in my cart, checking out my clothing (sewn by myself), and probably the car I drove (a used VW beetle).

An experience like that affects you the rest of your life. To this day, I refuse to particiate in bashing the poor.

[Plain Old Petunia]

I do not worry about covering child support in my EF. I do feel confident my ex will pay his cs no matter what. Frankly, it isnt all that much.

There is no reason to feel ashamed. You behaved in a financially responsible manner, and then your marriage ended and your circumstances changed suddenly and drastically. It can happen to anyone. So, we pick ourselves up, dust ourselves off, and move on.

I hope you and your kiddos are adjusting well to life after the divorce.

[busymom]

A lot of us have been through & survived hard times. I worked for 2 companies that 1) filed for bankruptcy & 2) down-sized. I thought I was going to die the 1st time I stepped into that unemployment office, but felt a little better when I saw quite a few people there who were better dressed than me (expensive suits & ties, etc.) So, hard times can happen to anyone. (Our little group seems to be the only ones who know that!) ;D

[Jake 48]

welcome and karma

[kindthatjingles]

Thank you all the kind words.

My divorce was something straight out of
Jerry Springer, but we continue to adjust to our life now and knowing that I am not alone means a lot.

I have my new budget now that the Chapter 7 is about complete. I have my creditors meeting next week and am nervous.

Take home pay :
1937.16 Per month // Child Support 878.21
Other Assets
Roth IRA ( had to take out and give most to Ex)
350.00
529 have 150.00 per child ( he went after those too)
Sep from employer 10,005.87

EF 2000.00


House was underwater, I voluntarily gave it to him because I could not afford the payments. He has refinanced it and my name is off the mortgage now.

Rent 765.00
Car lease 245.00
Nfm ( furniture store)
50.00 per month balance 1300.00 reaffirmed in the Chp 7
Electric 74.00
Sprint 38.00
Car Insurance 95.00 ( accident comes off 7-11)
Daycare for youngest 172.00 per month
After School care for oldest 56.00 per month
Health Insurance for me 130.00 per month( Kids are carried by Dad)
Roth contribution 50.00 per month
Gas 150.00 per month fuel ( apt pays water sewer and NG)
Dish 58.00 ( my apt doesn't offer local cable company)

just recently dropped INTERNET and got rid of my garage
Once my Roth and EF are better will contribute to the 529's again

Total 1883.00

and that's not food! I have basically no entertainment budget
we do eat out to the tune of 100.00 per month which I am trying to cut out.

So right now I NEED the child support but am trying not to.

I have them 5 days a week Ex two days. The two days are weekdays that I already work until 5. I have them every weekend to accommodate work schedules. Trying o find an extra job on two week nights has been difficult. Job I have now has a a lot of flexibility and would like to stay her until the youngest goes to Kindergarten Aug 2012. Have been here 7 years. Took a pay cut to not get laid off.

[Gardening Grandma]

I see 2815 coming in and 1883 going out. It appears that leaves you with $932 for discretionary spending. How much do you spend on food? Incidentals such as clothes, co-pays for medical visits, dental, entertainment? When is that car lease up? I'd try, if possible, to start saving so you can pay cash for a used car asap.

If you aren't sure about what you are spending on the above (and much more), this is a good time to start tracking. You can use software like Quicken, or simply a notebook.

ETA,
Honestly, I would not try to find another job. You can wear yourself out. Allow some time to recharge your batteries. I think your budget will be doable.

[Gardening Grandma]

This message has been deleted.

[kindthatjingles]

I guess I am just afraid to count on child support.
I have always gotten it on time, just don't quite think he is done taking me to court yet.
He was not happy I got the custody I got and the amount he has to pay.

Car lease is up March of 2013
I reaffirmed because I didn't have the cash for a used car
and knew my credit would be trashed for awhile.

Copays and medical bills are the things I have a hard time budgeting for. I am responsible for the first 480.00 per child of their med expenses per year. After that 30%

what is in EF was half of my tax return other half went to paying Attorney for Chapter 7.

The divorce cost me over 26k in legal fees. He fought me over everything. Even though I left with nothing, gave him the house etc.

[kindthatjingles]

GG

Karma for all the help

[Gardening Grandma]

Copays and medical bills are the things I have a hard time budgeting for. I am responsible for the first 480.00 per child of their med expenses per year. After that 30%

OK, Let's start with that. 480/child/year is 960/y for both or $80/mo. Can you set aside $80 each month out of the discretionary funds? That would start to build a "healthcare fund" for the kiddos. When a co-pay or healthcare bill comes up, you dip into it to pay the bill then go back to building it up.

I subtract those kinds of things from my checkbook balance so I don't see it. Some folks prefer to put them into a totally separate account. Or you can even keep it separate in an envelope - whatever works for you.

Personally, I have a "healthcare fund", a "emergency vet fund", a "Christmas fund" etc - about a dozen in all, but I'm a bit anal about it. Probably overkill....

[Deleted]

I would try to write down every purchase and expense you have. After a month or so you will find the leaks in your budget. I would also try to save a little bit for a used car for when the lease expires in Mar 2013, after you pay off your debt. Even at a 10% interest rate you could get a 10,000 used car for a little less than you are paying now for a lease and it would cost less in insurance too. But that is in the future. Right now just work on figuring out your budget, and hopefully you could have all your bills covered without the child support and the child support can go to your EF/savings.

[busymom]

I agree with gin. Write down every single penny you make for the next 2 months. This will give you a lot of clarity on where your money is going. (Yes, some of us have to watch ourselves even in the grocery store. The kid's wants aren't necessarily needs.) Put everything in a category: groceries, newspapers & magazines, kids parties, gas for car, etc. If you have money at the end of each month, you're on the right track! Then you can decide where any changes need to be made, and start including in your budget future needs, like saving for that next car.

[Plain Old Petunia]

I love mint.com, I use it to track my spending.

I think you should not fund 529 plans for your kids. You need to build your retirement savings. You can help your kids with their educations by housing them and helping them pay for community college. Or, they can get a part-time job and pay for some of their own expenses. After community college, they can go to public colleges and take small loans out if necessary. Really. A perfectly good education can be had that way. Does your daughter have college plans made already?

[kindthatjingles]

They are only 8 and 4... So they want to be a Fireman and The President... I am so proud!

I guess the only reason I worry about that is becasue there was about 1k in each one that had to be surrendered in the divorce to make up for my SEP. Which I couldn't break.

That was every Birthday, Christening gift etc.
So at some point I wanted to try and put something away.
Don't count on anything fromt he Ex. He won't do anythign that isn't court ordered.

GG- Just started a sub savings to put the 20.00 a week in for the healthcare. Thanks for the suggestion. Seperate pots may help more. When Married I handled everything but there was so much more to work with. I get bogged down in the needing a 6 month EF. Going to take awhile to build that

[Deleted]

Apr 1, 2011 15:58:59 GMT -5 kindthatjingles said:

They are only 8 and 4... So they want to be a Fireman and The President... I am so proud!

I guess the only reason I worry about that is becasue there was about 1k in each one that had to be surrendered in the divorce to make up for my SEP. Which I couldn't break.

That was every Birthday, Christening gift etc.
So at some point I wanted to try and put something away.
Don't count on anything fromt he Ex. He won't do anythign that isn't court ordered.

After you get set, you may be able to go back to court and get a court order to keep the child support until college is done.

[Gardening Grandma]

I'm with Petunia on the 529 - for the time being. When the time comes, that you can use the CS for extras, you could then start putting some there if you wanted to.

Also, I don't know how involved the grandparents are, but (speaking as a grandma myself) I'll bet that they'd be happy to contribute if they can.

But for now, I'd focus on getting your own EF established, start saving to buy your own car, and for those "oops" expenses that come up and blow holes in budgets.

(posted at the same time as gin - she's right. Also, depending on his own financial picture, you might even be able to get a court order for him to help).

But for now, the best thing you can do for your kids is to get your own finances established.

[resolution]

You were very smart to give up the house that you couldn't afford, that sinks a lot of women after a divorce. If the $4000 tax refund this year is consistent with what you expect for next year, I would recommend to change your withholding and try to get that extra $300 per month in your paycheck instead. That way you could build up your reserves a little faster.

[kindthatjingles]

They live in a different world when they are with me

Dad got one an Ipad for his Birthday and the other a room full of toys. ( Dad has a new baby I think he is compensating for) But quotes my Child support amount to me if I ask him to get them shoes etc.

I know I will sleep better the more I save.

GG
Correction started 2 sub accounts
Boys Med
Next car... notice I didn't say new..just new to me!

[kindthatjingles]

Grandparents help out with money for T ball Boy Scouts etc.

The things that Mom can't quite swing right now while trying to save. My Mom coupons and price matches so she always has Tide Cascade and other items she brings over to help out.

Both parents recently retired, I am sure they are fine paid off house, no bills etc but I want them to enjoy themselves and not help me to much. They gave me 1k towards the retainer in the beginning. Other than that I wanted to clean up my own mess.

She also invites me to dinner, sends me with leftovers and
helps with the kiddos when needed

[ses]

Welcome. You have come to a very good place for suggestions and support. Considering the hurdles you have recently overcome, I think you are doing exceptionally well.

What are you going to do for childcare for your 8yo during summer break?

Gin has made a very important point about documenting your spending--to the penny--to learn your spending patterns and leaks

Gardeninggrandma had a very good idea about $80/mo to a health care fund. Maybe a bit more for meds and such that might not be covered. Perhaps check out a HSA? I don't know much about them.

Petunia is absolutely right about not contributing to the 529 plans. Put the money in your Roth IRA. You can withdraw from your Roth, penalty free, for education. At this point you can do more for your children's educations by reading to/with them,
spend your time with them creating learning opportunities in everyday life--visiting the library, making cookies, nature study in a local park, take advantage of the city park's free activities and events. At their ages you, your time and attention and involvement is much more important than a 529 account.

As for food and groceries, planning carefully is more important than you can imagine. Include your children in your planning, ask for their input when planning your weekly menu, and then stick to it! I find it helpful to cook once and eat twice. Make a duplicate of your dinner and freeze one for another time. Plan some quick meals to have on hand for those crazy, hectic days when fast food calls your name. Go to the Women in Red Grocery Challenge thread and learn the details of effective couponing.

You are so close to being able to manage only on your income alone for monthly expenses, you can build up a health care account and an eventual car replacement find and an EF in no time.

Keep in touch for support and ideas. You don't have to be alone in this process unless you choose to be.

[Gardening Grandma]

GG
Correction started 2 sub accounts
Boys Med
Next car... notice I didn't say new..just new to me!


FWIW,
My son went through an awful divorce a couple of years ago. It was financially devastating, but he ended up with the kids . He's too proud to accept help from me, but he allows me to buy the kids things they need and I pay the private school tuition for one (what isn't covered by financial aid)..... Grandkids are truly the light of a grandparent's life....and we all want to spoil them within our means. So please do allow your parents to indulge...

[Plain Old Petunia]

Apr 1, 2011 15:58:59 GMT -5 kindthatjingles said:

They are only 8 and 4... So they want to be a Fireman and The President... I am so proud!

I guess the only reason I worry about that is becasue there was about 1k in each one that had to be surrendered in the divorce to make up for my SEP. Which I couldn't break.

That was every Birthday, Christening gift etc.
So at some point I wanted to try and put something away.
Don't count on anything fromt he Ex. He won't do anythign that isn't court ordered.

GG- Just started a sub savings to put the 20.00 a week in for the healthcare. Thanks for the suggestion. Seperate pots may help more. When Married I handled everything but there was so much more to work with. I get bogged down in the needing a 6 month EF. Going to take awhile to build that

Oh, I have you confused with someone else! Lol, I'm sorry, I was thinking your daughter was 17.

IMO, you have to concentrate first on being financially stable. Teach your kiddos good money management skills. Encourage them to do well in school, participate in their education as much as you can. That will help them immensely.

I understand about wanting to pay them back. In your shoes, I don't doubt I would want to do the same. But it really is OK to put that off until you can afford it. It isn't as if you just blew their money, when you are court ordered to divide assets, you can't just say no.

First things first, the way to eat an elephant is one bite at a time, stuff like that.