Budgeting FAQs


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Enter the amount of income you receive from each source on an annual basis, then divide the total by 12. This will give you an average monthly amount. The alternative is to create a written budget each month based upon the amount of income you will recieve for that month.

Goal-based budgeting is creating a budget without any consideration of what has been spent in the past.Each item is evaluated individually based upon the goals you have set for yourself and/or family.

Unsecured and Priority debts are debts that have been incurred in the past but have yet to be paid in full

The purpose of goal-based budgeting is to plan what one is going to spend within the limits of one’s net income. Most people who “just put everything on credit cards” do not pay them in full each month, thus creating additional debt. Current charges on cards must be paid in full each month as part of the budget/spending tracking.

Yes. They go in the “Miscellaneous – Other” category.You may want to find a bank that does not charge fees for regular accounts. Fees for insufficient funds can be avoided by not spending more than you have in your bank account.

Fees charged for the use of a credit card or debit card are put in the “Credit Card” sub-category of “Unsecured & Priority Debts”. You might want to find a bank that does not charge annual fees for their credit or debit cards.

1 $ Wiser is a tool for you to use to improve your personal financial position. If you choose to budget more than your net income, you are either budgeting debt or a reduction of savings/investment. You are the only one that can determine what is best for you and your family. It is recommended that you not budget debt. It is also recommended that if you budget a reduction of savings/investments, that you include those amounts in your income summary.

Pay the one with the lowest outstanding balance…regardless of the interest rate. This will give you a huge psychological boost when you realize that it is possible to pay off all of your debts.

The object is to get rid of creditors as quickly as possible. The best way of doing this is to pay off the creditor with the fewest remaining payments first.Being able to delete a creditor from your list of debts gives you an immediate since of accomplishment. It is much easier to stick with the program if you can see quick results.

You will add the amount of money you were paying to the first creditor to the amount you are paying to the second creditor. For example, let’s say you were paying $25.00 a month to the dentist and $25.00 a month on your Home Depot credit card. You will take the $25.00 you were paying to the dentist and add that to the $25.00 you had been paying to Home Depot. That makes your new payment to Home Depot $50.00.

Let’s say you were paying $25.00 a month to the dentist, $25.00 a month on your Home Depot credit card, $50.00 a month on your Visa, and $320.00 a month for your car. There are 2 payments remaining to the dentist, 6 payments remaining to Home Depot, 14 remaining car payments and 58 payments remaining to Visa. Once you have paid the dentist in full you still have 4 payments remaining to Home Depot.


You will take the $25.00 you were paying to the dentist and add that to the $25.00 you had been paying to Home Depot. That makes your new payment to Home Depot $50.00 and reduces the 4 payments to 2. You now have $50.00 to add to your car payment.


Your car payment is the next debt to be paid off because there are fewer payments remaining than there are for paying off your Visa account. You have already made four more payments on your car at $320.00 each. Now you are going to pay $370.00 each month ($320.00 + $50.00). Instead of another 8 payments, you will now make 6 payments of $370.00 and a final payment of $340.00. The leftover $30.00 will be paid towards your Visa bill that month.Thereafter you will add the entire $370.00 to the $50.00 you had been paying Visa. The new $420.00 payment to Visa will quickly pay off the balance.


In this example, you have paid off all of your debts in approximately 1 ½ years instead of almost 5 years had you not used Debt Roll-up.

A creditor is a person or business to whom you owe money.


You will enter your debt payments in several places within your budget.

All mortgages (inc. Home Equity Loans and Property Tax) are entered in the “Home” category.

The monthly payments for primary vehicle loans are entered in the “Transportation” category.

If you have loans for recreational vehicles or water crafts (i.e. ATV, jet ski, etc.), the monthly payments are entered in the “Entertainment” category.

All other debts that exist at the time you start 1 $ Wiser are entered into the “Priority and Unsecured Debts” category.

Initially, you should budget the monthly minimum payment. After you have completed your budget and the total matches your net income, you should re-examine it to see whether or not you can reduce the budgeted amount in one or more sub categories in order to pay more than the minimum payment on your current debts.

“Unsecured” debt is debt that is not secured by real property. Examples of “Unsecured” debts are

Credit Cards

Credit Cards in Collection

Medical Bills (i.e. Dental, Doctor, Hospital)

Non-card Accounts in Collections

Signature Loan

Student Loan

Utility Loan

“Priority” debts are government or court induced.Examples of “Priority” debts are


Child Support


State Income Tax

Federal Income Tax

“Secured” debt is debt that is secured by real property. Failure to pay “Secured” debts could result in the loss of real property. Examples of “Secured” debts are


Home Equity Loans

Vehicle Loans (i.e. Auto, Truck, Motorcycle, Boat, etc.)

Furniture & Appliance Loans

Margin Accounts (Stocks & Bonds)

Property Tax

Mechanics Lien

Select “Investment” from the drop down menu on the Income screen. Enter the net amount of money you receive each month from your investment. Select “Retirement” from the drop down menu on the Income screen. Enter the net amount of money you receive each month from your Retirement Fund.

Most people fail to adequately budget for gifts given at birthdays, weddings, religious holidays, etc. Your gift budget should also include year end “gifts” or tips you give to people (i.e. the doorman). Most people donate something to charitable organizations, i.e. church, disaster relief, research, and educational organizations. Many religious people give at least 10% of their income to their church or synagogue.This needs to be included in a complete budget. In preparing your personal budget, carefully examine the amount you plan to donate. If an amount is deducted from your paycheck, (United Way is an example of a charitable donation often deducted from one’s paycheck), that amount needs to be remembered when preparing your personal budget.

Putting money aside for the future is a fundamental principle of sound financial planning. A minimum of 10% is what most financial professionals recommend people put into savings and investments.

Debt Payments are for Priority and Unsecured Debts that are owed when you start the 1 $ Wiser program.We recommend that a person’s total amount of debt (excluding mortgages on one’s primary residence) not exceed 20% of their annual net income. This includes all vehicles. 1 $ Wiser includes vehicle debt in the Transportation category. Debts for one’s primary residence, (mortgages, property tax, etc.) are included in the Home category.

You can either budget it under “Miscellaneous – Other” or budget it in the category which you usually spend it on.

All new charges on your credit card should be budgeted as though you were paying cash. You should also account for them as though you were paying cash. All new charges need to be paid in full each month so that new debt is not incurred.

If you do not enter all of your actual expenditures, you will not know whether or not you are going over budget. As you enter your actual expenditures you may find that you need to adjust your budget so that you do not spend more than your net income.

Always get a receipt, even for the coke you purchase when you buy gas. If the receipt does not describe your purchase, make a note on the receipt as soon as you get it so that you will be able to enter the amount in the correct sub-category.

Security Deposit is included in the budget because it is money that must be available when a deposit is required for rentals, utilities, etc. A person must often put a security deposit on a new residence before they receive their deposit back from their current residence.

You can either budget for it under “Home” category or the Vacation sub-category of “Entertainment”.


There are two ways of improving your debt-to-income ratio. The first is to increase your income.The second is to reduce your debts.

Most institutions are changing the manner in which they calculate your minimum payment. To make it easy for you, use 4% of your outstanding balance or $15, which ever is greater. For example, if yourcurrent outstanding balance (including interest) is $2,500.00, your minimum payment would be $100.00. If your outstanding balance is $287.51, your minimum payment would be $15.

You may choose to budget for gifts and holidays in the months in which they occur or you may wish to put a set amount into a separate savings account each month to cover gifts and holidays. Regardless of the method you choose, you should be realistic in the amount you budget. Don’t forget gift wrapping, cards, and postage when you create your budget.

1 $ Wiser’s program contains categories and sub-categories that cover most people’s expenses. If you budget even a few dollars in each category and accrue those funds, as well as put money into savings each month, you should be able to cover most unexpected expenses. For example, if you were to budget $10.00 a month for “Appliances”, and that $10.00 a month is not used for anything else for a couple of years, then when you need to repair or replace your clothes dryer, you will have the funds with which to do it. As with everything in 1 $ Wiser, it does require discipline not to spend more than is budgeted within each category.


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