The Forum's Financial Fix-Up: Juggling bills on a tight budgetJohn and Annette Graves have been robbing Peter to pay Paul. The Moorhead couple, one of three families participating in The Forum’s Financial Fix-Up, knew their monthly budget was short.
By: Sherri Richards, INFORUM
Today: The Graveses
Jan. 12: The Dockters
Jan. 19: The Richmans
John and Annette Graves have been robbing Peter to pay Paul.
The Moorhead couple, one of three families participating in The Forum’s Financial Fix-Up, knew their monthly budget was short. Each month, Annette would shuffle bills to make sure they didn’t fall too far behind on any payment.
But it was still emotional to see the numbers during their financial counseling session with The Village Family Service Center in Fargo.
“Cutting the expenses when the budget is that tight is, at least for me, very humbling. You find yourself where you don’t necessarily want to be,” she said, tearing up.
After putting together an estimate of monthly income and expenses, the Graveses’ financial counselor, Joshua Huffman, found they were short about $300 a month.
The couple bring home an average of $3,300 a month. It’s a figure that varies wildly because John is self-employed, doing siding, windows and other outdoor projects.
They calculated their monthly expenses at $3,600, a figure Huffman said was frugal for a family of five.
One thing working in their favor was a relatively low debt level, composed of a mortgage, personal and student loans, a vehicle loan and about $2,800 on a few credit cards.
But in some ways, this makes their situation more difficult. In cases where the couple have a lot of unsecured credit card debt, that’s often the first bill Huffman will suggest forgoing when ends don’t meet. The consequences are less severe than missing a house or car payment, and the collection process is lengthier, he said.
Huffman’s first task for the Graves was to track their spending. This will show how accurate their budget was. “It’s really hard to make changes in your situation if you don’t know where the money is going,” he said.
Next, he told them to prioritize their expenses. Things like housing, transportation, food and utilities should come first, Huffman said. At their December counseling session, the Graveses owed a pickup payment with another one due soon, and still needed to pay the mortgage.
“You need to take care of yourself first,” he said.
He told the Graveses to talk about what different spending cuts they could make, acknowledging there’s not a lot of fluff in their budget.
Annette had already gotten a student loan deferred. They’d cut the cable package, reduced their car insurance and cut back on eating out. She shops thrift stores and garage sales, and trades kids’ clothing among a circle of friends. She was applying for heating assistance.
Their best bet will be to increase their income, Huffman said. “Your budget rises and falls based on when that income comes in,” he said.
The Graveses agreed. The day of their session at The Village, John had an interview for a full-time position, which would provide a steady paycheck.
Huffman said if they can get to a point where the budget would balance going forward, they could be eligible for a hardship grant from the Otto Bremer Foundation, administered by The Village.
The money would go toward getting them caught up on their past-due bills, which was their primary goal when applying for the Financial Fix-Up project.
Huffman said even with a $300 deficit, Huffman said their budget was “fairly balanced.”
“It’s not uncorrectable,” he said.
Readers can reach Forum reporter Sherri Richards at (701) 241-5556