March 24, 2015
Mr. and Mrs. Thibodeau,
Thank you for taking the time to share your financial situation with me. Based on the information you provided,
you appear to be operating with a monthly deficit of $1039.52 while maintaining your monthly expenses. This
is based on the following information:
Summary
Income
Expenses
Debt Payments
Deficit
$2,491.48
$3,531.00
$0.00
($1,039.52)
Below are recommended spending percentages compared to your own:
Housing
Food/Cleaning/Paper
Transportation
Miscellaneous
Medical/Dental Vision
Savings
Charitable
Debt
Total
Recommended
30%
$747.44
15%
$373.72
15%
$373.72
10%
$249.15
5%
$124.57
10%
$249.15
10%
$249.15
5%
$124.57
100%
Actual
38%
$950
22%
$550
40%
$991
40%
$990
2%
$50
0%
$0
0%
$0
0%
$0
142%
$3,531
Financial Condition:
Currently, you are overspending in the following area(s): Housing (38%), Food (22%), Transportation (40%),
andMiscellaneous (40%). In your questionnaire, you indicated that you are filing Ch. 7/13 bankruptcy. I
understand you have credit card debt, medical debt, and installment loan debt. There are 4 people in your
household.
I appreciate you taking the time to explain your overall situation with regard to your bankruptcy filing and living
situation. It appears you have had to make some difficult decisions in order to make your finances as
manageable as possible. You have listed that you have credit card and installment loa debts. These debts are
considered to be non-secured debt, and will likely be discharged under your bankruptcy. So in trying to provide
you with a monthly budget to cover your actual living expenses, that consumer debt has not been included in
this analysis. Please consult with your attorney. Any additional debt repayment obligations will require you to
adjust your monthly budget. I encourage you to explore programs and resources you may be eligible for to
help balance your budget each month. I am happy to provide some resources for you.
Housing
The Mesquite Group www.themesquitegroup.org
(877) 769-4069 -- Email: Support@TheMesquiteGroup.org
Page 1
If you own a home, your mortgage(s) payment, homeowner’s insurance, property taxes, home owner’s association (HOA)
fees, utilities, and maintenance expenses (house alarm, yard maintenance, repairs) are included in this category. If you
are a renter, your rent, renters insurance, and utilities are included in this category.
Because mortgage/rent, insurances, HOA fees, and property taxes may be inflexible expenses, the easiest way to cut
expenses in this category is to control more flexible costs like water, electric, gas, yard maintenance, and trash removal.
Here are suggestions to continue to keep your housing expenses within recommended spending guidelines:
Saving on utilities:
·
Install low flow shower heads
·
Unplug “vampire electronics” (appliances that include a clock or operate by remote)
·
Replace your light bulbs with compact fluorescent bulbs
·
Run full loads of clothes and dishes, particularly between the hours of 7:00 pm and 7:00 am when usage rates are
usually lower
·
Insulate your water heater
·
Use cold water to wash your clothing
·
Call you energy/power company for an energy audit. Many provide them free
·
Keep your thermostat warmer in the summer and cooler in the winter
o
Programmable thermostats can help save money and many utility companies provide discount programs
to help cover the cost
Food, Cleaning, & Paper Supplies
This category includes spending on groceries, restaurants, school and work lunches, snacks, and cleaning and paper
supplies. Here are some ideas on keeping your expenses within recommended guidelines:
Groceries
Food is a basic need and it is a very necessary part of our personal budget. The average cost for groceries is anywhere
between $150-$250 per person per month (per USDA Food Plans). Individuals with special dietary needs may find
themselves on the higher end of the scale. Here are some simple money saving techniques to keep this cost in line with
your budget.
·
Make a menu of the meals you plan to eat and make your grocery list directly from the menu
·
Shop weekly to cut down on wasting produce
·
Make a grocery list and stick to it. If it isn’t on the list, don’t buy it!
·
Never underestimate the power of a coupon
·
Eat before you shop. Don’t let your growling stomach tell you what to buy!
·
Compare cost per unit (cpu). Some times more is less!
The Mesquite Group www.themesquitegroup.org
(877) 769-4069 -- Email: Support@TheMesquiteGroup.org
Page 2
Restaurants, School lunches, work lunches, and snacks
Never underestimate the value of brown bagging your lunch. A peanut butter and jelly sandwich on whole wheat bread
can run about 54 cents a sandwich whereas the average cost of school lunches for 2010 was $2.58 ($56 a month). As
any parent knows, mornings can be a hectic time to get the kids out of the door on their way to school. Try making
lunches the night before to save on prep time in the morning.
Grabbing lunch out while at work can be costly to both your wallet and your health. The average cost a combo meal at a
fast food restaurant comes in at $4-$7 range. That translates to $27.50 a week, or almost $120 a month, or $1440 a year
(not to mention the not-so-good health effects of foods high in fat and sodium)! Consider packing your lunch or taking in
leftovers!
We often overlook the real cost of grabbing a quick snack or coffee. The average cost of a medium latte is $3. Get your
java fix at home rather than at your local coffee shop. Not a barista? There are several single cup coffee brewers that
take the guesswork out of brewing at home and can cut your cost in half (or even more). You can also pack your own
water bottle instead of buying bottled water and keep snacks handy for work, school, and running errands.
If you enjoy the experience of eating out a restaurant, you are not alone. The best plan for any budget is planning. Make
dining out a part of your budget and your grocery/menu planning. Here are some good tips for keeping this expense in
check:
·
If you have children, check to see which restaurants have “kids eat free” nights
·
Try eating out at lunch rather than dinner. The lunch menu tends to be less expensive.
·
Many restaurants have large portion sizes. Share an entrée with your partner.
·
Check to see if restaurants are running specials. Many have specials for 2 running.
·
Try to catch the early bird special (dining before 6pm)
·
Order water instead of soda (you can save anywhere from $2-$3 per person)
Cleaning & Paper Supplies
Household cleaning products can get expensive quickly. Coupons are relatively easy to find in your local newspaper and
online. You can also purchase store brands to save money as well. Using all-purpose or multipurpose cleaners can help
you cut costs on specialty cleaners. Even better, make some of your own cleaning supplies!
Transportation
Transportation expenses include car payment(s), fuel, insurance, tags and licensing, tolls, parking, maintenance, and
public transportation.
Once you have a car payment, you are obligated and bound by contract to make your payments as scheduled. Leasing a
car may seem like a money saving option, but often, leasing is much more expensive and much more complicated than
buying, even more, many require you to keep the vehicle dealer maintained which results in higher maintenance costs for
you. The Federal Reserve Board has a great guide to help you understand the difference between leasing and buying a
car. Check it out online: Keys to Vehicle Leasing.
Fuel costs continue to rise and many of us drive SUVs, Vans, and large sedans. Controlling your fuel and auto costs may
seem impossible, but we’ve got some helpful tips to get the most from your tank:
·
Car-pool:
The Mesquite Group www.themesquitegroup.org
(877) 769-4069 -- Email: Support@TheMesquiteGroup.org
Page 3
·
·
·
o
You’re not the only one looking to save money. Ask around at work and see if anybody is interested in
car-pooling. You can swap weeks with drivers and cut down on wear and tear on your vehicle.
o
Do you and your spouse work in the same traveling direction? Share a ride and save some cash.
Teen drivers
o
For most teens, driving is a privilege and not a right. Along with privilege comes responsibility.
Encourage your teen to pay for gas and pitch in on general maintenance. They’ll learn a valuable lesson
on maintaining a vehicle and the value of a dollar, both of which are very important skills to take into
adulthood.
o
If it isn’t necessary for your child to have a car let them share the family car. Insurance is very expensive
and can take a significant cut out the family budget.
Running Errands
o
Reduce the amount of time spent on the road by creating an “errands day.” Try to run your errands in as
few days as possible to reduce the amount of gas spent traveling roundtrip.
o
Plan your errands trip by traveling in a loop so that you’re not backtracking between destinations.
Insurance
o
Lower your premium by increasing your deductible. Make sure you can afford a higher deductible before
making any changes.
o
Is your car an older vehicle? Consider dropping collision and/or comprehensive coverage. If your car is
worth less than 10 times the premium, purchasing the coverage may not be cost effective.
Medical, dental, and insurance expenses…
The Mesquite Group attached a copy of our reference guide entitled “Health and Well-being Resources” to help you
continue to keep these costs in check.
Miscellaneous Expenses
Here is a breakdown of each of the types of spending included in your miscellaneous expenses:
Communication/Entertainment: home telephone line, cell phone(s), pager, internet access, cable/satellite television,
video rental, movie tickets, magazine and newspaper subscriptions
Ways to save:
· Consider dropping your land based telephone line
· Drop premium channels or give your cable/satellite the boot altogether. There are many services that allow you
to watch your favorite television shows and movies via internet streaming for a nominal cost or even for free!
· Catch a matinee instead of an evening show at the theater
· Do you have a magazine you love to read? Don’t buy it at the store! Shop for magazine subscriptions carefully.
Check online to get the best pricing. You can get them for $1 per magazine and cheaper!
· Internet savvy? See if your local paper provides “online” only subscriptions. Save paper and money!
Recreation: Recreational vehicles and insurances, time shares, dating expenses
Ways to save:
· If it floats or flies, it is typically cheaper to rent than to own!
· If you have seldom used equipment, give it a new lease on life by selling it.
· Plan a budget for “date night”. Don’t forget to include baby-sitting in your expenses.
The Mesquite Group www.themesquitegroup.org
(877) 769-4069 -- Email: Support@TheMesquiteGroup.org
Page 4
Education/School /Child-care: tuition and fees, room and board (if not for self), books, fieldtrips, extracurricular
activities, childcare expenses
Ways to save:
· K-12 Public school vs. Private school: when push comes to shove on your budget, strongly consider public
school. Less than stellar public school options? Consider hiring a private tutor to enhance your child’s learning
experience. It’ll come out more cost effective in the long run and provide the individualized experience you might
be seeking. Keep the big bucks set aside for higher education.
· Books: save on books by shopping used. Check online for competitive pricing.
· Paying for a child’s college expenses? Consider financial aid and student loans.
o Free Application for Federal Student Aid (FAFSA)
o Encourage your child to seek out a job on campus, visit their school’s local financial aid office, and check
work study programs
· Set aside savings year round to cover sports and music lessons. Make it a part of your planned spending.
Personal Care: haircuts nail salon, massages, specialty hair care products, vitamins, health club dues, dry cleaning
Ways to save:
· Join social coupon sites like Groupon or LivingSocial to save on local services.
· Find a low maintenance hair style; hair color is costly to maintain, keep it simple.
· Acrylic nails require constant upkeep; do your manicures and pedicures at home.
· Utilize local Beauty or Massage schools to reduce expenses.
· Are you really using your health club? Most Americans are losing money on gyms they never frequent. Opt for
free activities like running, biking, walking, swimming, and aerobic exercise at home.
· Consult with your doctor about money saving options for vitamins and supplements.
Important Note
Household, food and cleaning products, transportation, and medical and dental expenses
should not exceed 65% of your take home pay (net income).
During and after the bankruptcy, it will be critical that you are able to maintain a balanced budget. If your
expenses exceed your income, you will need to either reduce your expenses or supplement your income. I
would recommend tracking your current spending to help identify funds that can be freed up to further balance
your budget and eventually allow you to re-build an emergency and long-term savings. This information can
be used to create a written budget, if you have not already done so. There are great tools available online if
you are comfortable using them as well as other resources. These will be included in the attachments with
your certificate email but some to look into would include Mint.com for budgeting, Billshrink.com to compare
communication expenses, etc. I encourage you to look into using Benefits.gov particularly to help identify
resources that you could utilize moving forward, I will also be sending health and wellness information as well.
Thank you for choosing The Mesquite Group! I wish you the best in the future!
Heather Walrath, AFC
Financial Counselor
The Mesquite Group
The Mesquite Group www.themesquitegroup.org
(877) 769-4069 -- Email: Support@TheMesquiteGroup.org
Page 5