What am I doing wrong- why is money tight for me?

AimHigh · #1 (**permalink**) 09-24-2008, 10:28 AM

Alright, I'm a new member here obviously and found this site through a google search and I usually would rather find a message board to get real-time and personal advice than from a columnist who talks in generalities. I looked at the other forums and didn't think what I had to say fit into a specific sub-forum.

Anyhow, here goes: I can't figure out why I am broke and struggling month-to-month. I also just can't see getting out of it especially because my current situation seems like it should FAVOR me being able to save lots of money.

Here is my basic situation:

1. 24 years old
2. Job: Process Manager
3. I make $36k per year
4. No kids.
5. No mortgage, I share rent with roommates- my part is about $375/mo for rent and bills.
6. No credit cards open, had one awhile back but closed it- don't like them.
7. Education: Bachelors Degree in 2006 from major college
8. My net income is about $2,100 after taxes are removed, health & dental insurance, and my 401k is taken out.
9. I get paid once a month on the 15th.

So, why am I struggling? Most people would probably read that and say "this guy has no major bills or kids- what is he worrying about?" That is just it, I can't figure it out. I feel like at this point in my life I should and NEED to be saving around $300-400 each month into a savings account...I can't even do that, most months I have trouble making it to the next 15th for a paycheck.

My parents were really bad with money when I was young and never really got my involved or taught me much about it...so I am kind of clueless except for the own education I received while in school- which obviously wasn't too "hands on" for me. My thing is, how will I ever be able to buy a newer car (which I really need at this moment- car is breaking down) or a house or afford to have kids or anything else that really costs a lot of money?

I just don't see how people do it...maybe I am young and just don't know all the ins and outs yet, but it is pretty scary. I was thinking people needed at least around $10,000 to put down on a mortgage loan...at this rate, that would take me 10-15 years just to save up for that it seems.

I don't have a drug problem or gambling problem...the only thing I can say that I do that is considered excessive is go out for drinks ONE time a week. I also have a girlfriend which I usually pay for when it comes to things like that or going out to eat or what not.

As far as savings, about 5 months ago I opened an online account with HSBC (the 3.5% savings account) and had it where $150 was deducted each month. Well...I did good with that for about 2 months until I had to take it all out to pay my car taxes that came up. Ever since then, as soon as the money goes into the savings account...I find myself needing it.

I'm sorry this is so long, but I will just end with an actual breakdown of my main spending and then hopefully you guys will have some input or questions that lead me somewhere...any advice is good advice. Maybe I just simply need a raise at work...who knows...everyone says I'm underemployed as it is.

Rent: $265/mo (my share of 3br apt)
Utilities: ~$100/mo ($80 on power, $20 on water, cable is free)
Cell Phone: ~$130/mo
Student Loan Pmt: $150/mo
Gas: ~$250/mo
Car Insurance: $50/mo

So not including groceries, eating out, drinks, and other little expenses that I can't think of, that equals $945...which means I should have about $1100 to spend on anything else.

Any starting points for me to figure all this out? Thanks for any and all help.

Sharp211 · #2 (**permalink**) 09-24-2008, 03:58 PM

How much do you typically spend when you go out for drinks? How much of your money goes to your girlfriend?
I can side with you on this somewhat. Here are my numbers. I make about 40k a year. Monthly gross about $3300.

Monthly Expenses:
Car loan - $400
Car insurance - $120
Rent - $520
Credit Cards - $60
Utilities - $550

BUT... My biggest expenses are entertainment. I get paid bi-weekly and by the time I get my next check, I'm scraping by with about $100-200. Sometimes keepin the girlfriend happy can get expensive

User Name · #3 (**permalink**) 09-26-2008, 04:17 PM

Sounds like you have a budget issue. This is a serious problem that needs to be corrected ASAP. If not, when you do start taking out loans, i.e auto or house loan, start a family ect. you are going to be hard up on the bills and risk losing things. I would suggest you start taking a hard look at your spending habits and cut out things you DON'T NEED. There is a difference between WANTS and NEEDS. You need to eat, but do you NEED to eat out or WANT to eat out. You don't NEED to have a big bar tab. Use a computer program like Quicken. Or, you could start saving every receipt and writing down what you bought and the cost if there is no receipt. After 8 weeks go through all your receipts and I bet dollars for donuts you are bleeding out money on things you don't need. Best advice I have ever received is, Set a budget, live below your means, and pay yourself first! This means set a budget of your needs (clothes, food, home, ect). When you get paid take out your money you want to save and save it, pay yourself first. Then pay your bills. If you have anything left over, this is your money to use for recreational things. If you find yourself not being able to save as much as you like, this will make you work harder to save more! Good Luck

Julia · #4 (**permalink**) 10-01-2008, 04:57 PM

Start looking for ways to cut down your expenses. I noticed your cell is $130 per month...lower your plan and stick to it. My advice is to see where you can lower your expenses overall, even if it sucks. Save it and invest it right away. Pay yourself right before paying the car company, cell phone company, etc. Once you see it all adding up, you'll be motivated to save even more. If you don't know what to invest in or how to go about doing it, my company offers a great service. It's with Wealth Diagnostics - you invest a minimum of $100 and then invest $100 monthly. You can choose up to 7 investments and you can trade 7 times for free each month. Not too shabby. Email me if you're interested. Good luck!

skins_fan · #5 (**permalink**) 10-04-2008, 10:03 PM

Quote:

Originally Posted by AimHigh

Alright, I'm a new member here obviously and found this site through a google search and I usually would rather find a message board to get real-time and personal advice than from a columnist who talks in generalities. I looked at the other forums and didn't think what I had to say fit into a specific sub-forum.

Anyhow, here goes: I can't figure out why I am broke and struggling month-to-month. I also just can't see getting out of it especially because my current situation seems like it should FAVOR me being able to save lots of money.

Here is my basic situation:

1. 24 years old
2. Job: Process Manager
3. I make $36k per year
4. No kids.
5. No mortgage, I share rent with roommates- my part is about $375/mo for rent and bills.
6. No credit cards open, had one awhile back but closed it- don't like them.
7. Education: Bachelors Degree in 2006 from major college
8. My net income is about $2,100 after taxes are removed, health & dental insurance, and my 401k is taken out.
9. I get paid once a month on the 15th.

So, why am I struggling? Most people would probably read that and say "this guy has no major bills or kids- what is he worrying about?" That is just it, I can't figure it out. I feel like at this point in my life I should and NEED to be saving around $300-400 each month into a savings account...I can't even do that, most months I have trouble making it to the next 15th for a paycheck.

My parents were really bad with money when I was young and never really got my involved or taught me much about it...so I am kind of clueless except for the own education I received while in school- which obviously wasn't too "hands on" for me. My thing is, how will I ever be able to buy a newer car (which I really need at this moment- car is breaking down) or a house or afford to have kids or anything else that really costs a lot of money?

I just don't see how people do it...maybe I am young and just don't know all the ins and outs yet, but it is pretty scary. I was thinking people needed at least around $10,000 to put down on a mortgage loan...at this rate, that would take me 10-15 years just to save up for that it seems.

I don't have a drug problem or gambling problem...the only thing I can say that I do that is considered excessive is go out for drinks ONE time a week. I also have a girlfriend which I usually pay for when it comes to things like that or going out to eat or what not.

As far as savings, about 5 months ago I opened an online account with HSBC (the 3.5% savings account) and had it where $150 was deducted each month. Well...I did good with that for about 2 months until I had to take it all out to pay my car taxes that came up. Ever since then, as soon as the money goes into the savings account...I find myself needing it.

I'm sorry this is so long, but I will just end with an actual breakdown of my main spending and then hopefully you guys will have some input or questions that lead me somewhere...any advice is good advice. Maybe I just simply need a raise at work...who knows...everyone says I'm underemployed as it is.

Rent: $265/mo (my share of 3br apt)
Utilities: ~$100/mo ($80 on power, $20 on water, cable is free)
Cell Phone: ~$130/mo
Student Loan Pmt: $150/mo
Gas: ~$250/mo
Car Insurance: $50/mo

So not including groceries, eating out, drinks, and other little expenses that I can't think of, that equals $945...which means I should have about $1100 to spend on anything else.

Any starting points for me to figure all this out? Thanks for any and all help.

You had the right idea with putting money away directly from your check before you saw it. However it does take some discipline to leave the money alone and learn to live with the money that's left over.

Try putting the money in an account somewhere where it would be a lot more inconvenient to get to it. A differnt bank on the other side of town perhaps and only have the savings account with them. Also don't get an ATM card, make it so you have to go in to get money. By putting your savings account at the same bank with your checking account it does make it too easy to transfer the money back and forth or to access it.

mwbowyer · #6 (**permalink**) 10-30-2008, 01:34 PM

My advice would be to start putting money away in a savings acct until you get about $1,000. This is your emergency fund - to be used ONLY for EMERGENCIES.

Then get on a budget. Use a form to do this (search internet for one). While you are on a budget, you need to squeeze every dollar out of it. Cut WAY back on eating/drinking out. Cut back on your cell phone bill. Do not get or start using a credit card.

Start paying every extra penny to your Student Loan.

When loan is paid off, fully fund your emergency fund to 3-6 months of expenses.

When emergency fund is fully funded, start investing 15% of your income in good mutual funds. At the same time, you can start saving for a down payment on your house.

For more on this plan, read Dave Ramsey's, Total Money Makeover.

peterpoecanezal · #7 (**permalink**) 11-13-2008, 01:36 AM

You just have to find a way to cut the expenses a little. I think food expenses can always be cut down if one is industrious enough about it.

MrJpp · #8 (**permalink**) 11-13-2008, 01:38 PM

You mentioned that you think you may be underemployed. Perhaps it would be a wise decision to start actively seeking other jobs that would have a potential to pay more. Furthermore, as the other poster said you can always cut down on your food budget, and maybe you could implement a hard budgeting system where you only go out to eat or buy drinks with hard cash that you take out at a pre-specified limit.

Sponsors