Building A budget

[WanderingWoockie]

As I've recently decided that I'd like to give van living a try money is the first thing that comes to mind. Not only getting myself acclimated to living on less and living more but also about getting a van set up. I have no time frame as to when the rubber will meet the road and have a job waiting tables at the local (cr)applebee's so i have regular income. As of now I'm bringing in about 1K or a little over in every month. I also drive a 86 Chevy C10 that can be sold or traded for a van when that opportunity arises. Other then that I plan on taking everything I own and packing it up as if I were to move. If it stays in the box at the end of the month it will be SOLD.

As far as current expenses I pay about 265$ for rent and utilities, 25$ for insurance on my truck, 40$ for a phone, and about 200$ on food. Now I know most of you are saying that I'm rather close to living the frugal life and loving it but the kicker is that I have NO savings. Basically I'm acknowledging that I have unseen holes in my budget (probably cigarettes and booze) and need to patch those up. Do any of you have any advice as far as how to budget when you take home cash in hand EVERY night? I mean budgeting a paycheck tends to be a little easier because you get it in a lump sum and can divide from there. Should I just figure out percentages and divide my nightly take home cash by those percentages? Or maybe just put all my cash away for a week and "Pay myself" myself once a week? Any advice on a strategy would be greatly appreciated as I prepare for this journey.

My second money concern comes in the form of the actual van itself. I know there are a large number of variables that come into play when deciding how much money it actually takes to build yourself a setup. So just excluding the actual van variable simply because I'm more than willing to spend a proper amount on a solid van. How much do you think actually outfitting a van ballparks at from insulation to building a bed to a solar system? Also what about emergency funds?

The first question is really the one I really need help with and the second one is there simply to set a goal so please aim high as I know its better to overshoot and undershoot.
Any advice comes greatly appreciated!

 

[anewbiewannabe]

I'm not on the road myself yet so I can't chime in about that stuff. I do know there are some great threads here discussing the different types of vehicles and they might be a good place to search for what would seem like the best fit vehicle-wise for you. However, I've been a penny pincher all my adult life---either to save for things I really wanted or just because that was where my life was at the time. So I might have some ideas that you could switch up to fit your own choices.

You've listed about $530 in expenses and $1000 in take home so you've got a decent sum trickling through your fingers somehow. I'm guessing your money is split between paycheck and tips? Can you pay your basic expenses with just your paycheck? If you can do that then you could put the tip money away and don't think about it until you deposit it once a week or a couple times a month in a "getaway" bank account. You mentioned ciggies and booze so you need to figure out a realistic amount that you spend or would be willing to lower your spending to. Does your food budget include eating out as well? You can eat well on less than $200 a month with just a little effort if your food budget is just home. You have to decide which is more important to you---saving money quickly and maybe doing without some "luxuries" or saving a little slower so as to not deprive yourself too much. A little bit of penny pinching in order to have a little nest egg or something you want is not a bad thing.

Another way to save some money is everything that you don't use and end up selling---put all that money into your "getaway" account too. If you aren't in a position to have an account then you need to figure where you can put it so you won't get into it unless absolutely necessary. Also, before you sell some of that stuff that you don't use in your daily life now you might look at things like containers or furnishings that you could repurpose in a van, thus saving you some of the outfitting costs. You might pack that stuff up separate so you have time to think about it.

Anyhow, that's what I've got for now. If you've got any questions, ask. Somebody around here probably has an answer from what I've seen.

 

[surfer]

A K.I.S.S. System

Break everything down into 3 categories: put just enough in checking for bills for the month, just enough in cash for allowance (gas, food, cigarettes, entertainment, medical), all else into savings. At the end of the month put the unspent allowance & checking into savings. Challenge yourself to have allowance money to put in savings at the end of the month. Seeing it grow will be encouraging. Resist immediate gratification. Check out budgeting, frugal, cheapskate sites.

Sounds like an out of site out of mind plan would help you. Kind of hard with tips. Maybe they are enough to be used as your allowance? If too much put excess in savings

 

[SoulRaven]

When I sell Christmas trees each year I'm taking $500-$1,000+ in cash home per day, for roughly a month. (Usually $10-$20 per tree) , I put it ALL in the bank, except for my $200 per week expenses, which literally covers all of my bills, gas, food, etc.

My rule of thumb is to try and talk myself out of any purchases, if I can't, then I buy it.

For a van, if you start out with a window or conversion van with nice finished floor, walls, and ceiling, you can eliminate the whole insulation process and the expense that goes along with it. Just take out the seats and move your stuff in.

I'm not a huge fan of solar panels, I charge my house battery while driving now, and have never run out of power in the last year I've been using this system. I do have individual solar powered items which I like, like lanterns, radios, etc. My hot water is also usually solar heated.

I can build the insides of a camper van for $200-$300 using a combination of new and used mainly household items. I don't build anything in permanently. I use a futon sofa/bed for instance, just simply move it in. Plastic drawer sets work well, and you can add a wood shelf on top for a durable counter for both work space and your kitchen counter. Dollar store dishpans and spray bottles work well for sinks and water delivery, and there are similar dollar store answers for showers too. Your camp stove can also be used for a heater. Being comfortable and self sufficient does not necessarily need to be expensive.

I keep an emergency fund large enough to replace everything, including my van. If I don't use my full $200 per week, any excess gets added to the emergency fund.

 

[HarmonicaBruce]

I'm with off-grid on not building things in, being able to change it back.  I got a new van, and I just moved the stuff in.

Your budget didn't account for medical, dental, clothing.  It sounds like you're living pretty cheap, $2 65 / mo for rent and utilities is very low.  Are you working full time?  Can you make more money?  Can you get food stamps?  Can you get another part-time job?

Can you use a credit card for all your expenses?  Just don't spend cash.  I think you need to stop smoking cigarettes.  You can't afford them, and it will be good for your health.  Do you go to the bar?  That has to stop, you can't afford to go to the bar and save money.  You can buy beer and drink at home, but it's really easy to blow money at the bar.  If you work out a budget where you go to the bar once a week and spend $10 each time, then fine, but only bring $10 with you and don't borrow any from your friends.

You need to stop spending money you don't need to spend.  Can you get free food at a food bank?  One good thing about a second job, you're so busy you don't have time to go to the bar.

Sorry if I sound preachy, and good luck!  

 

[WanderingWoockie]

Thanks for the replies as they've given me a great base to go from.
I live in a house with two other room mates who luckily view life in a similar way that keeps my utilities low. We don't pay for cable and keep it pretty cold in the house to save on heating.
The budget I have now needs some revising. Maybe a closer look would be a good start as I forgot to mention the 25$ minimum payment on my college loan that's sitting about 5,000$ right now. I could also work more as I'm only working about 25 to 30 hours. Bless the great people of Iowa are always very generous folks and seem to adore my outgoing personality and strong community connections. With that being said I could realistically get an extra 500$ a month at 40 hours.

The other option for increasing my income would have to be MTURK or maybe some freelance writing as I am decently coherent as far as writing is concerned (I hope). I saw something in this forum that allowed you to write some short articles for a few bucks but I can't find it. Is freelance writing really an option if I'm willing to sit down and put in the work and build a reputation?

Also I bank at my local credit union that I've been literally born into if you will because its has close ties with the plant my fathers worked at. I actually used to cut the grass for the place . Should I make the change from this bank to a different one now so that I familiarize myself with fees associated with the account to avoid the stress on the road? Also is paying for everything with a credit card viable? I recently got myself a Capital One credit card with 0% interest until 08/15 in order to build some credit because I felt it was necessary. I spent 500$ on it to get 100$ bonus and already have it paid off. I researched it pretty well at a 12.5%-21% varying interest. My only concern is the interest and getting 'swipe and never look back' kind of debt.

Moving into a van as you guys put it seems a little foreign as everything I've seen has been built in but I suppose I am in a land where normal is in the eye of the beholder . Do you have any issues boondocking after just moving into your van v.s. building a more permanent set up?

I really do appreciate you folks taking the time to point a younging in the right directions!

 

[Almost There]

There are several tricks to being able to actually save that excess money you already know is being spent loosely.

Coming from an accounting background, I've had the opportunity to mentor a couple of youngun's on working within a budget and saving money. So here goes:


Credit Unions are great places to bank and I'd keep it for using as your every day bank. However, opening a savings account at another bank and physically separating your savings from your day to day banking can be helpful, especially if you have a problem with temptation. Look for a savings account with no fees or one that charges only for withdrawals (you'll be less tempted to withdraw if it costs). If you can live on your paycheck then put all your tip money in the savings account and pretend it doesn't exist except when you look at how fast it's growing. If you can live on less than your paycheck, then add more to the savings account. Same thing if you have money left over in the budget at the end of the month, instead of rolling it over like minutes on your cell phone, move it to the savings account or use it to become debt free.

That student loan is going to take you forever and ever to pay off if you owe 5 G and are only paying $25.00 a month. Even if it were interest free which I assume it's not, you've got another 16 2/3 years to go on it, more like 30 years with interest. It is like an albatross around your neck that will hold you back mentally if nothing else. Figure out how soon you want to be debt free and add that payment into your budget. If you feel you want to, take on some extra hours or another source of income and use it strictly to get debt free.
 

There is no greater freedom on earth than the one of knowing that you don't owe anyone a penny.

Set yourself up with a reasonable budget that does include some money for entertainment because it's unrealistic to think that you can do without some enjoyment in life. Oh and booze and meals out (and pizza ordered in) come out of the entertainment budget, not the food allowance. Too many people put those in the food budget, all they're doing is fooling themselves into thinking that they are being diligent.

And then stick to it as closely as you can or figure out where it's going that doesn't conform to the written budget.

For the next 3 months keep track of every penny you spend and I mean every penny. Write it down in a small notebook. You'll soon find that hundreds of dollars a month are slipping through your fingers with coffee takeouts and other penny wasters. Once a week or once a month, put them on a spreadsheet by category and add it up (excel is great for this).

Be very careful with that credit card, it's a great way to build a credit rating but only if you don't abuse it. One of the younguns' I've helped by mentoring finally qualified for her first credit card. She uses it but goes home immediately and does an online payment for whatever she purchased that day. At the end of the month she has no credit card debt. If there isn't the money in the bank to pay for the purchase then she doesn't spend. It's taken her 2 1/2 years (she's a single mom of 2 pre-teens) but one more $100.00 payment will have her debt free for the first time in her adult life. And yes, we're going to celebrate big time!

Don't forget to take a minute or two every once in a while to gloat over your successes! Pat yourself on the back.

As to how much it will take to get you into a living in a van down by the river (which is a wonderful place to stay btw.. ), estimates are all over the place. Me, my budget is about 10G but that's because I can. Some do it on far less, others' spend way more. The choice is entirely up to you.

 

[Patrick46]

WOW....lots of GREAT advice on here folks!!

Well Done!

 

[anewbiewannabe]

I agree!!! Especially with Almost There.

I don't know how I learned about money/finance---may have been the accounting teacher from H.E. Double Toothpick! She was hated by most, but her way of teaching challenged me to prove her wrong and I actually enjoyed the class. Because of that I must have done a lot of research way back when. It sounds like you have some money sense already, which is fabulous because it will help you follow your dreams quicker.

I'll add a bit more. Until the past 2 years I never paid interest ever, but sometimes life necessitates it if it's for things you need and you have a plan to get back on track or if you are out of options for food and shelter and not quite ready to do without. Credit cards can be a great way to track your spending as long as you never spend more than you have to pay it off at the end of the month---that's the way I did it for most of my life---before I got credit cards money just disappeared from my fingers somehow. LOL

Anyhow, treat your credit card like a credit building tool for the time being because so much is tied to credit ratings---which really bites sometimes. Make sure to use your credit card for some little thing every six months or so if you aren't using it with any kind of regularity---they will close accounts that have been inactive for a period of time and that might vary by company. If you use it right you don't need to concern yourself with what the interest rate is so no annual fee cards are good to have. The longer you have a card the better it is for your credit history too.

If you ever want to finance a vehicle or something a high credit rating gets you better interest rates. Even apartment communities judge you by your credit rating. And it sounds like at least some employers may hold a bad rating against you when applying for a job though I don't know that that's legal. If it's not they can get around it by not specifying that as the reason. Some of us folks that have been around a while may not bother with credit scores anymore, but you are young enough they will probably be important at some point.

Using extra work income to pay more on your student loan will help improve your debt to income ratio which will further improve your credit rating. It will also make the loan cheaper in the long run and lift that burden from you sooner. Find some money every month for your "getaway" fund too.

Oh yeah, I'm in the camp that thinks you can just keep your credit union account for now, maybe even always. I still have my first checking account though I've had different accounts as well along the way. Once you get closer to the road then you can examine whether it will work with the other parts of your finances. Online banking makes most financial institutions available from wherever you may be.

The van stuff, or whatever mobile lifestyle you choose is really such a personal choice that spending time reading about other's choices would probably be the best way to get an idea of what you want to deal with or what you feel you can afford.

You are lucky that you are young so you don't have 3 or 4 generations of stuff that you've been stuck with to figure out the best way to re-home. I miss the days when I could load all my stuff in the back of a pickup in order to move. LOL

The main thing with all the information you'll get is that you have to choose what will work for you. Some people can use a cash system and put so much cash in an envelope for each expense and it works for them---I get to easily confused with that type system. (I tried it.) I used spreadsheets for a long time and they worked great for me---that was before excel even.

Welcome to the Adventure!

 

[HarmonicaBruce]

I'm going to repeat myself, you need to quit smoking.

You should NEVER pay any credit card fees.  Not unless the alternative is someone losing a body part.  Your credit card should pay you cash back.  My Amazon card gives me 3% on Amazon purchases, 1% on everything, 2% on some stuff.  

I hate banks, and have only used credit unions for years.  One thing I've noticed.  Credit unions are non-profit, so at the end of the year they need to give away their "profit" for the year.  One credit union account I have gives scholarships to kids in Ithaca New York.  The other credit union gives a cash bonus to the members, based on how much business the member did with them.  It's about 1/2 percent of your loan or account balance average. That's the Dearborn Federal Credit Union.  I recommend them.

Do you pay interest on your student loan?  How much?  If you pay no interest, you should keep making the minimum payments.  Otherwise, you should get out of debt.

You need to get a little savings going.  I wouldn't open a bank account, a savings account at your credit union should be fine, and simpler.  

Where are you located?  If you're up north, living in a van is different than if you live in the south.  Could you park a van in the driveway of the house you're living at, use the shower and kitchen, but sleep in the van, with electricity running to it?  Then you could move out of the house, into the driveway.  With 4 people sharing the expenses, your share would be $200 / month.  You'd only be saving $65 / month by moving into a van.  I think you'll find that $200 / month for a shower, place to park the van, and electricity is quite reasonable.  Of course with a van you can travel around, be mobile, etc, but I don't see you saving a lot of money doing it.

Again, good luck!

 

[AuricTech]

Dave Ramsey's Web site has some good forms and advice for setting up a budget.

 

[akrvbob]

Some people do better with cash and some do worse. It sounds like having cash from work every day may be part of your problem. If having cash is a problem one way to handle it is to get a pre-paid debit card from Walmart and stopping by every night and depositing it into the card after work every night, that way it doesn't stay around. You can do it right at the check-stand. Let that card be a savings account and never spend it.

Your credit union probably will let you deposit cash at the ATM and there is probably one nearby. You could stop by there every night after work and deposit it right into a savings account and never touch it.

For most of us the harder it is to get to your money to spend it the less we spend it. Having it in a savings account instead of cash in your wallet may slow you down.

Bob

 

[flying kurbmaster]

 my .02 cents worth and that is all it is worth. When dealing with cash from tips, if you are not declaring it as income, don't leave a trail by putting it in the bank. live off your cash, save most of your pay cheques in your bank. Trade the C10 in for a van, even better look for a box for the back of the C10, possibly build one, people have built beautiful campers on small pickups, start practising, weekend camping trips, park ups with the girlfriend, in no time you will sort it out, slowly keep looking for used equipment that you can scrounge, or pay little for, mattress stove, cooler.it doesn't have to happen tomorrow, The rich corn farmers of Iowa have garages full of great junk, go to garage sales, pay your relatives a visit let them know what you need for equipment, there is literally tons of camping equipment sitting around Iowa collecting dust. Up your hours, quit smoking, quit drinking, stop eating, wear out all your clothes, then borrow your friends that they are not wearing anymore, cut your own hair, stop buying shampoo and other hair products, you can still hang with your friends, become the designated driver, pay off that student loan in the next 1 1/2 years, make it your goal stick to it that is the extra 5 hours a week or less. If you have anything of value sell it. Put that towards the student loan. Watch your savings grow every week thinking of more ways to cut corners, have a little cash stash of savings as well that you can pull out of hiding and count every week, to get the feel for it, good luck.

 

[Howiet]

A trick I use to keep from buying things I don't need or really "want" is to use the two week rule.  If I see something on line or in a store that catches my attention but isn't what I was online or in the store looking for I set it aside. If I am still "needing" or "wanting" it two weeks later then I reevaluate it.  Nine times out of ten I will have forgotten all about it or have determined that I don't need or want it.  

 

[anewbiewannabe]

A trick I use to keep from buying things I don't need or really "want" is to use the two week rule.  If I see something on line or in a store that catches my attention but isn't what I was online or in the store looking for I set it aside. If I am still "needing" or "wanting" it two weeks later then I reevaluate it.  Nine times out of ten I will have forgotten all about it or have determined that I don't need or want it.  

I do that too and if it was a sale item and I happen to go back and it's not there I figure it wasn't something I really needed. I also keep a list in my head of prices on things that I want but don't need immediately so that I can recognize a good bargain, I've started putting the lists down somewhere too in case it's something I don't want to risk forgetting. I do it with groceries too because my grocery store previews it's new ads on the last day of the old ads and sometimes the sale item one week goes on sale for a better price the next week. If they'd just charge a fair price to begin with then we wouldn't have to play all those "customer card" games.

 

[SoulRaven]

For me, being a penny pincher is a state of mind. I know that if I stay debt free, and save all that I can, then when something comes along that I really want or need, the money will be there to purchase it.

I just know that in the back of my mind, if somewhere along the line something comes up that will improve my life or my happiness, I will be able to purchase it. This peace of mind allows me to be happy and go to sleep at night with no worries to keep me awake.

I play this little game with myself, challenging myself to see how much money I can save. For me, it's a fun game, and quite rewarding.

 

[WanderingWoockie]

I am almost overwhelmed with the amount of responses to this thread and can not express how much I love this forum already. I watch the Without Bound documentary on the home page of this site which inspired me to pick up the novel Walden and this has already taken up quiet a bit of my time that I usually spend drinking and chain smoking with friends. Although I will admit that I went out and bought myself a top shelf whiskey as I saved 250$ this week alone. Maybe I'm being a little short sighted as far as 'entertainment' costs are concerned.
Either way I am taking paying off my college loans rather serious as the minimum was 25$ and set up an auto pay for 60$. I figured I will demolish my debt before I even think about trading off my trusty C10 for anything as the pickings are rather slim around these central Iowa parts at this point in this season. With that being said I will pack up everything as if I were to move into the van within the next week and start selling it. Of course all the money will be put towards student loans so I have that weight lifted off my shoulders! I just have a question as to how I should go about selling these items. I mean there's a rather strong Craigslist presence for things as such as furniture and such but not much for clothes and misc. items that I own. Should I box them up and forget about them until spring cleaning season coming up in a few months so I can just throw a big garage sale and hopefully sell most of it at a decent price at once or throw it on Craigslist and get the most for my items over a long time. I'm leaning towards the garage sale option since I consider myself a rather good negotiator. I might not get top dollar for every item but I hope to get a majority of the 'junk' I have gone at once would be a real stress reliever.
I'll be honest as I'm a little confused about the credit union talk though, I mean my CU has a relatively proper online banking system it just seems a little shotty to me but I guess you can only judge a book by its ONLINE cover as I know everyone in the bank and I would trust them with my life let alone my money. I'm just not sure how depositing cash and such would be possible. I'll be forth front as I haven't asked them much about this because I haven't even really expressed to my parents how serious I am about this life style and the close ties of a small town make it impossible to keep anything secrete.
The credit card talk makes sense as far as paying the entire balance off at the end of the month to avoid the interest and that is a concept that I understand well simply because I know a few other people younger than my self that have four credit cards that are maxed out and I would NEVER want to be in that position because 25% of your bill ROLLED over isn't a joke by any means. With that being said I'm not going to switch credit cards for a couple of months due to the contract I have now. I do have a question as to when I switch to a different card what should I look for? Cash back on gas or just cash back in general? Is there any benefits to a card with a 6-- to 75- range that I should look at particularly when hitting the road?

 

[anewbiewannabe]

Well, my suggestion would be don't worry about the credit union account right now and make your deposits as you are able. Once you are closer to the road then you can figure out the best way to get deposits in when you aren't physically nearby---one of the ways mentioned on the Online Banking thread would be a way that would work for you. I asked the question about online banking and got lots of answers and ideas over there. If you have any regular bills to pay you could test out your credit union's online banking now by paying those online to see how it works, then you'll know how you feel about it for down the line.

Same with your credit card---you are just starting to establish credit so you don't need to be changing cards if you pay it off every month. How long you've had your credit card/s is a part of the calculations for credit scores so you don't want to be switching out. When the time comes where you can add a credit card that might give you some perks then you can figure out which perks would serve you best. Sometimes when you've established a credit rating then you can get a card that charges an annual fee to waive it, especially if you are using it since they make money off the merchants. You mentioned a contract---I've not heard of credit cards with contracts, but then I've had mine for a long time---or do you just have an annual fee?

As for the clothes and possibly other items, you could look on facebook to see if there's a community yard sale page in your area. People advertise what they have for sale, post photos and prices on those pages and they might be an option if you have decent clothes in good condition. You can look at the yard sale page to see what kind of items sell in your area. They negotiate on those pages as well.

Also, Walden has been one of my all-time favorites since I was in High School.

 

[ozzie roamer]

Well, my suggestion would be don't worry about the credit union account right now and make your deposits as you are able.  Once you are closer to the road then you can figure out the best way to get deposits in when you aren't physically nearby---one of the ways mentioned on the Online Banking thread would be a way that would work for you.  I asked the question about online banking and got lots of answers and ideas over there.  If you have any regular bills to pay you could test out your credit union's online banking now by paying those online to see how it works, then you'll know how you feel about it for down the line.

Same with your credit card---you are just starting to establish credit so you don't need to be changing cards if you pay it off every month.  How long you've had your credit card/s is a part of the calculations for credit scores so you don't want to be switching out.  When the time comes where you can add a credit card that might give you some perks then you can figure out which perks would serve you best.  Sometimes when you've established a credit rating then you can get a card that charges an annual fee to waive it, especially if you are using it since they make money off the merchants.  You mentioned a contract---I've not heard of credit cards with contracts, but then I've had mine for a long time---or do you just have an annual fee?

As for the clothes and possibly other items, you could look on facebook to see if there's a community yard sale page in your area.  People advertise what they have for sale, post photos and prices on those pages and they might be an option if you have decent clothes in good condition.  You can look at the yard sale page to see what kind of items sell in your area.  They negotiate on those pages as well.

Also, Walden has been one of my all-time favorites since I was in High School.

 

[ozzie roamer]

My tip for savings to help you get closer to you goal is to put every $5 note you get into an envelope/old wallet /sox
at the end of the month take it to your bank,and before you knoe it you will have enough saved up to go towards your dream.
The challenge is to keep putting in each time you get a fiver.
Cheers
ozzie roamer