<prompt> Human: Im looking for some VERY constructive criticism on my finances. Im ending every month breaking even without being able to save a penny other than our automatic 401k contribution. Ive been trying for 5 years to really get our finances in check but at the end of the day all I have is a pretty sheet that shows where our money goes but no plan to make it different besides spend less. I want to know what you guys do to make sure youre not spending more than youre making. My husband and I make good money but we only get paid once a month. We both work for the same company. Hes worked for the company for a while and Ive started working for them more recently so Im still getting used to the both of us only getting paid once a month. We have two kids, 5 and 1, who are both still in childcare Mon-Fri. And we have lots of debt that we brought on ourselves when our 5 year old was born because we werent making much money at all. Im going to detail where all of our money goes every month and I would like some feed back as far as what it looks like Im spending more than necessary on or where Im doing a decent job. You can be as harsh as youd like :. I need someone to be strict with me because clearly as the financial person in my marriage, I need some discipline. Income:My monthly bring home: 4017My husbands monthly bring home: 3375Husbands truck gas reimbursement check: 600Dependent Care Savings Acct distribution: 416 Total8408 my husband also gets quarterly bonuses that are around 1500 and Ive been trying to do some interior design consulting on the side to earn some extra money as well which has brought in around 300 per month the last couple of monthsHousing Utilities:Mortgage: 1126HOA Trash: 160Electric: 135Water Sewer: 80Cable, Phone, Internet: 160Cell Phone: 220Car Insurance: 200Total2081Credit Cards: We have a total of 10 credit cards with a total of 590 in minimum monthly payments and overall credit card debt of 22,000 give or take a couple 100Loans:Personal consolidation loan: 345 - 6,800 left to pay Student Loan 1: 304 - 36,000 SL 2: 300 - 15,000 SL 3: 50 - 6,000 SL 4: 50 - 1,800SL 5: 50 - 3,200Truck: 775 - 32,000Car: 150 - 10,000Total2024Other:Childcare: 355week 1420month Medical Bills: 150 - 800 left to payDues Subscriptions: 150Gas: On avg. 800-850Food: 1200 includes eating out and groceries on avg.Total3720Grand Total: 8415 and obviously this doesnt account for things like hair cuts, clothing necessities, and random necessary spending on top of the small spending we do here and there. Help!  <response>: I wont do the math for you, but please take the time to read my entire comment --- twice. It is long and it is complicated, but I have been told by more than a few people that it has helped them make sense of their situation and to get out of debt.If you want financial stability and peace of mind, this is advice not just for now, but for the rest of your life.--- You must track your spending. All of it. Unless you have been tracking expenses in at least as much detail as indicated below, you spend much more than you think you do.What do you spend each month for these categories and any others that you can think of? You can guess at the beginning, but eventually you should track expenses for several months, especially for the variable categories like food or gasolinepetrol. rent or mortgage utilities food -- in two parts: groceries for home, food out restaurants, coffee shops tips at restaurants child care -- maybe separately for babysitting household items Scotch tape, thumbtacks, etc laundry expenses whether at home, or at laundromat eyeglasses if you wear them check zennioptical.com for inexpensive glasses; I am not affiliated with Zenni Internet Netflix and similar entertainment subscriptions cable phone landline, cell vehicle fuel for the month vehicle repair vehicle maintenance parking car insurance driver license vehicle registration renter insurance life insurance health insurance medical expenses gym membership pet expenses personal care hair, etc clothing replacement laundry andor dry cleaning incidental purchases the coffee at the convenience store etc emergency fund -- to which you must contribute each pay period until you reach the goal you set.Some of these are annual expenses car maintenance, driver license. Break them down to monthly. Every month put the money aside -- and track it.People tell you to go to various subscription websites for this, YNAB for example. If youre already deep in debt, why would you want to spend more money? Start with a spreadsheet or even paper and pencil and a calculator. But TRACK THE EXPENSES, every . one . of . them. nbsp;nbsp; nbsp;Every day. nbsp;nbsp; nbsp; This takes ten minutes at most. You can afford that time.Now that you know how much you spend, and on what, decide what you can reduce or eliminate. This is dificult. This is also necessary. This is your budget. Over time, as you get accustomed to living on a budget, you might adjust these numbers; for now, your decisions should give you a budgeted amount per category and a total amount of expenses. Both of these numbers are important.Base your budget on what you need to spend, not on the idea of spending all your income --- or more. After all, thats what got you in this mess, isnt it?At the same time think about income and debt.For income, you want to know your average monthly take-home pay. If youre paid once a month, thats easy to know. But suppose youre paid weekly. Then multiply your weekly take-home pay by 52 and divide by 12.For example, take-home income of 400 a week x 52 weeks 20,800 divided by 12 1,733 a month.The other way is to multiply weekly pay by 4.33, the average number of weeks in a month. In this example, 400 x 4.33 1,732 a month. Close enough.I am going to use this amount for the rest of my comment. The amounts are just numbers; substitute your own numbers.If you earn salary plus commission, make a budget that based on the salary alone. Use the commission to reduce the debt. Also, if your company pays bonuses, dont count on them in your budget. When you get them, use them to lower your debt rather than splurging on a vacation you cant afford.Next, look at debt.List all debts separately, with the amount owing, the monthly payment, and the interest rate. You need the APR to better decide which debt to eliminate first. For exampleDebt Amount APR Payment:---:---:---:---:CC 1 15,000 14.7 336Car 9,245 15.6 157CC 2 4,050 21.6 150You can sort these in whatever order you think best; lowest balance to highest makes more sense to me. If you do this in a spreadsheet, you can sort in various ways, play with various calculations, etc.Now you know your expenses, you know your monthly debt payments, you know your income. You now do the math to see how much is available for other things, the spread between expenses and income.Lets assume that your necessary living expenses add up to 1,000, and the debt to 325. 1733.00 -1325.00 ___ 408.00Call it 400 for convenience.Because your objective is to reduce the debt to zero -- why would you have any other objective? -- lets add 200 a month to the debt that has either the lowest balance snowball method or the highest interest avalanche method -- whichever seems better suited to your situation and your psychology. However, I am going to suggests a slight twist on either method.While you do this, you should do two more things about the debt.First -- heres the twist -- dont reduce the payments on the other debts from where they are this month. If you can afford to pay xxx this month, and youve measured your expenses accurately, and youre sticking to your budget, then you can afford xxx next month and the month after that, etc. If these are diminishing-minimum-payment debts, like credit cards, paying more than the current amount will reduce the interest you pay each month, because the extra payment will reduce the balance. Saying that differently, keeping a level payment will reduce the debt faster because the interest is calculated on the outstanding balance.If you cant afford to continue to pay the current minimum, try to pay a little more than the minimum next month, and then continue to pay that amount thereafter. This provides a psychological advantage, because when the first debt is paid off, the second is already lower than it would have been if you had been paying only the minimum each month.For car loans, that may not be possible, but paying extra can shorten the loan period and cost you less interest. Call the lender to find out how to have the extra amount applied to the principal, not toward next months payment. You might not be able to do this with automatic payments. If thats the case, continue the auto-pay you did set up auto-pay, didnt you?, but send in the extra money by check, with instructions. Ask the lender how to do this.If you want to pay your mortgage at a faster rate there is usually a clearly-shown way to pay additional toward the principal. If theres not, ask the lender how to do this.Second, stop adding to your debt Put the credit cards away. Dont take out more loans. Go on a strictly cash basis. Dont buy what you cant pay for from the spread. Yes, there are emergencies and things that cost more than one months spread. Yes, they must be dealt with. But this is general advice.The other 200 from the spread could be partly play money, partly long-term saving, partly building up an emergency fund. If your debt is large, you should keep the play amount low until you have an emergency fund.Here is a non-emergency example of unexpected expense. By non-emergency, I mean a situation where you dont have to give someone money this minute.You have set your budget as described, with 200 for savings and fun. But your washing machine breaks. You REALLY dont want to buy a used machine, and a new one will cost 500. But buying a new one tomorrow will require using the credit card. Dont use the credit card. Use a laundromat until you can pay for the washing machine in cash. Stop any fun spending, maybe reduce the long-term saving contribution. Squeeze the budget a bit. Remember that you could dry most of the laundry at home on a clothesline. You can also take your own detergent to the laundromat so you dont have to buy their expensive stuff.Here is a semi-emergency example. You get a flat tire, and the tire is not repairable. A new tire of the brand you prefer costs 100, and you have only 50 in your emergency fund. This ONE TIME I would allow you to add to the credit card debt -- but only if you promise to add another 50 to your payment next month. But first, try to find a used tire, or a cheaper new tire. This isnt the time to worry about whether your car is totally pimped out.If there isnt a surplus, you have several options: sell off unneeded stuff -- short term. This also has the advantage of de-cluttering your living space, which also the work to keep it clean, and reduces your stress Increase your income --- second job -- longish term. May also hep you learn new skills explore new job choices. Decrease expenses -- long term reduce Internet cost, eliminate restaurant meals, limit vacations or vacation spending, reduce grocery cost by changing eating habits -- this doesnt mean starve. this is not as difficult as you might imagine, as youll find out after you critically and honestly analyze your spending.The general term for this is living below ones means. As you get out of debt, build your emergency fund, and operate on a firm financial basis, monitor your expenses, keep control of your spending, and enjoy a life with less worry and stress --- you will be able to increase your discretionary spending, add a little more luxury or fun items to the budget, and enjoy a life with less worry and stress.Depending on your exact situation, some of this might not apply, but much will. Good luck with this. 