Lecture Notes: Real Life Budgeting

Introduction to Real Life Budgeting

• Speaker: Kamiko Love, from TheBudgetMom.com
• Platform: The Budget Mom YouTube Channel
• Focus: Real life budgeting particularly when income is insufficient

Case Study: Jillian

• Location: Grand Rapids, Michigan
• Employment: Full-time billing and administrative lead, part-time shuttle driver
• Husband’s Situation: Recently lost job, applied at USPS but not yet employed; earning $100-$200 weekly from a side job
• Financial Challenge: Significant deficit in budget due to loss of husband's primary income

Budget Analysis Process

Step 1: Understanding Motivation

• Jillian’s motivation includes building a dream home, becoming debt-free, and starting a family.
• Current housing is a mobile home purchased with a gifted down payment.

Step 2: Income Assessment

• Jillian’s Income:
  • $500/week full-time
  • $80-$200/week side job
• Husband’s Income: $100-$200/week from side job

Step 3: Expense Analysis

• Fixed Expenses:
  • Rent and mortgage on mobile home: $1186 total
  • Subscriptions: Spotify, Netflix, Hulu, Disney+, Discovery+
  • Utilities, phone bills, car insurance, and a puppy care plan
• Variable Expenses: Groceries, gas, dog food, and discretionary spending
• Debt: High-interest car loans and credit cards

Step 4: Bare Bones Budget

• Purpose: Minimize expenses to necessary survival needs
• Process:
  • Keep, cut, or lower expenses
  • Total expenses targeted: $3,466
  • Adjusted income considered: $2,800
  • Cut non-essential subscriptions and services

Step 5: Dealing with Deficits

• Current Deficit: $1,140 shortfall after adjustments
• Recommendations:
  • Cut Netflix, Hulu, Disney+, and other non-essentials
  • Investigate selling high-interest assets like the Chevy Traverse
  • Identify income opportunities for husband: UberEats, Amazon with potential $3,000 sign-on bonus

Actionable Steps and Recommendations

• Income Solutions:
  • Husband to actively seek employment opportunities
  • Consider immediate opportunities in fast food or delivery services
• Expense Management: Prioritize necessity bills; maintain utility, housing, and essential living costs

Conclusion

• Key Insight: Budgeting during income loss requires identifying if it is an income issue or spending issue
• Encouragement: No shame in financial difficulties; focus on actionable steps to manage and improve the situation.
• Engage community for support and resources.

Final Thoughts

• Budgeting is a personal journey; requires hard decisions but is manageable with a strategic approach.