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Help me be less stupid with my money
El Whito
Registered User regular
Registered User regular
I'm 22 years old and currently living with my girlfriend in my parents' old house. They moved out a couple years ago and let me live there on my own so I could stay in my hometown and go to school and work and all that.
But now we've been looking at a place of our own, just because my mother is very intrusive, and because when they left they left everything of theirs, and there's no room for anything of ours. It feels like living in someone else's house while they're on vacation, and we want something that is just for us.
My problem is this: I have a long history of being just awful with my money. I make around $750 a week as a meter reader, and my only bills are utilities, usually around $200 a month; my truck payment, which is $300 a month; a credit card payment, at $100 a month; and obviously gas for my truck, which I consider a bill since, being a meter reader, it comes to around $850 a month.
With only these few bills it really feels like I should easily be able to afford rent on a small house for us, but every time I try to come up with a plan to pay for rent and utilities on a place of our own I always either come up short or just squeaking by, with no wiggle room for surprise costs or anything. Another problem is my girlfriend has been unemployed for a while and I've been more or less supporting her, but she found a job recently so it won't be as much of an issue.
Now like I said, my money saving skills are really just the worst. I would really like to learn how to be tighter with my money while still having some left over for personal pleasure. So I guess what I'm asking for is help on creating a budget where I can afford rent, gas, my truck, and the occasional date night. I would appreciate any help at all, because I really feel that, with the amount I make a week, I should be able to, but up until now I simply haven't been able to.
Can I?
But now we've been looking at a place of our own, just because my mother is very intrusive, and because when they left they left everything of theirs, and there's no room for anything of ours. It feels like living in someone else's house while they're on vacation, and we want something that is just for us.
My problem is this: I have a long history of being just awful with my money. I make around $750 a week as a meter reader, and my only bills are utilities, usually around $200 a month; my truck payment, which is $300 a month; a credit card payment, at $100 a month; and obviously gas for my truck, which I consider a bill since, being a meter reader, it comes to around $850 a month.
With only these few bills it really feels like I should easily be able to afford rent on a small house for us, but every time I try to come up with a plan to pay for rent and utilities on a place of our own I always either come up short or just squeaking by, with no wiggle room for surprise costs or anything. Another problem is my girlfriend has been unemployed for a while and I've been more or less supporting her, but she found a job recently so it won't be as much of an issue.
Now like I said, my money saving skills are really just the worst. I would really like to learn how to be tighter with my money while still having some left over for personal pleasure. So I guess what I'm asking for is help on creating a budget where I can afford rent, gas, my truck, and the occasional date night. I would appreciate any help at all, because I really feel that, with the amount I make a week, I should be able to, but up until now I simply haven't been able to.
Can I?
Mass Genocide is the most demanding activity one can take part in. Next to soccer. - Loki, Dogma
El Whito on
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Give us some more numbers and we can help.
Personally I'm a big fan of Gail Vaz-Oxlade's site. Specifically, I've linked you to her 'Resources' section which contains instructions on creating a budget, as well as things like an interactive net worth sheet, interactive budget, etc.
Getting a budget together is good, but the reality may very well be that your combined income isn't large enough to support moving out into a house and affording utilities and suchwhat. In that situation, you'll either need to look at how to reduce some of your current bills, or make more money. Things like downsizing a vehicle, carpooling with someone, etc.
Also I'm a bit worried about the way you stated your credit card payment at 100$ flat. To me that sounds like you may be carrying credit card debt, and only making a minimal payment. If that's the case, then you need to look at upping your payments or else that debt will be hanging around for years and years.
I'm not entirely sure about getting out early without a penalty. I got the loan through a credit union if that matters. I've definitely put some thought into it though, since it's racked up nearly $2500 in repairs since I bought it.
Pay that off. Finance charges are for chumps.
I agree with Entriech that if you have significant credit card debt that you're just making minimum or near minimum payments on, you should focus on getting rid of that before you move out. That interest will cost you a lot in the long term.
Another thing that can really add to your budget that you don't touch on at all is food. How much do you spend a month of food? Is that something you've actually figured out or do you just have some vague notion that you don't spend that much? You need to understand how much you're actually spending on food and how you might be able to reduce that. For instance, do you eat out a lot (including fast food) or do one or both of you cook at home most of the time? If you eat at home, are you mainly eating prepared meals like frozen meals and canned food? I'm not assuming anything here, but if you're not actually preparing most of your own meals (and I don't mean opening and heating a can of chili) then those costs can really add up compared to buying staples and actually cooking for yourself.
I know for my wife and I our by far biggest problem in our budget is our food costs. We just eat out way too much.
Also 14% interest on a car loan?! holy crap man that is horrible. you might try selling that truck or getting a new loan at least. Also, I don't know much about meter readers, but do you get reimbursed for gas? If not that may be something you want to start keeping track of, if you aren't getting reimbursed at all for that then it's something you could probably take a deduct for on your taxes, but you need to keep records (receipts) and/or a log for work mileage would be great too.
Honestly if you drive a lot for work you should have a fuel efficient vehicle.
Seriously, you have it easy right now. I might suggest differently if you're gf had a job, but right now, you should be focusing on taking care of your loans while saving as much as possible. I know you probably rearing to start your life on your own or gf, but trust me, rent free living is something you should throw away without seriously giving it a thought.
Maybe a cheaper alternative would be getting a storage space, moving some of your parent's stuff there, and moving in some of your own stuff?
Look into re-financing your auto note at a local credit union. Also look into getting a tax deduction for the gas you're spending if you're not being reimbursed by your employer, though you'll probably have to make detailed logs if you also use the truck for non-work related things.
As to how to save, different things work for different people. What works for me is as soon as the paycheck hits my bank account I transfer a significant chunk to a savings account at my credit union. If it's not in the account I use for day to day spending then I don't spend it.
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Do that, then reevaluate.
You should have absolute shit tons of money to get yourself out of debt on that income alone, considering you have no shelter costs.
How do you have $850 a month in gas costs? That's about 200 gallons of gas. A month. You're filling up 5 times a week?
Or was that $850 total monthly expenditures? Which puts gas usage at ~$200 a month.
You're looking at $2000 a month to literally melt away every debt you have. You could pay off your car loan in a year and your student loan in perhaps 2. Credit card would be a month's income.
(edited for wtf gas)
I mean at that point you're down to $1,000 a month, that's giving you $200 a month for food.
Budget - Simple is fine, but it needs to be thorough. Every dime you make has a name and a purpose. Have an entry for Savings.
Truck - Get rid of it asap. Save up $1k-$1.5k and get a crappy little car that you can drive while you sell the truck and get a loan for the difference from a local credit union/small bank. Almost has to be at a better interest rate, Jesus Christ.
Credit Card - Get rid of this immediately.
Emergency fund - Look at your monthly budget, add up the mandatory stuff, multiply by 3-6. Save up that much in just a savings account. Now when shit happens, vehicle trouble, medical problem, out of whisky, laid off, your life can continue for a bit without immediately being screwed.
I think once you really get your head around how big a deal it is to not have to pay rent, you'll be a LOT more forgiving of your mother's intrusiveness. If you don't have the truck payment, credit card payment, and get your gas bill down to something sane, you will be able to stack up cash in a hurry and knock out the student loans and start saving to buy a house outright a few years down the road. I would like to recommend talking to a real CPA about claiming that gas bill on your taxes. At over $10k a year, it might be worth itemizing.
When you're an adult, there's a bit higher baseline of :effort: that is necessary to function at a reasonable level. You don't have to live inside a spreadsheet and constantly be applying ratios and running numbers for every decision, but you do need a spreadsheet and know how to run the numbers.
Steam
Only the strong can help the weak.
Extreme gas use aside, I would still sell the truck just to get out from under the payments. Nothings on fire, he's not in some emergency situation, but that payment dinging his income every month hurts. He could be stacking that up and getting a really nice used vehicle for $4-5k pretty quick. Then he would have a pretty nice vehicle, and not have any payments dinging his income every month. That would allow him to save up faster to maybe own a house, invest in mutual funds, do some long term stuff that beats the hell out of enriching FMC.
Steam
Only the strong can help the weak.
None of us are here to pass judgment on you -- so you bought a truck because you wanted one and it turns out it's more expensive than you realized. You probably spend money on things you may not recognize as being too expensive or that you'd save money on by waiting. You probably treat your girlfriend to some things too since she's out of work and you arguably like her a great deal. I'm assuming here and tossing out some common things that catch people who are trying to save because I have a feeling you're falling into a cycle that's common for people in tight money situations.
Basically, the cycle is that because your money is tight, and you're unhappy with your housing situation, you spend more on other things to make it seem less dreary. The financially smart thing to do is to exploit the fact that you live for free in a house that comes pre-furnished and live a very austere life cooking cheap foods at home. Not doing that doesn't make you stupid -- it makes you human.
However, you are in a good housing situation and you should look to adjust your finances so that you can save money regularly each month. Once you see how much you can save in a situation where you pay NO rent, you can then see what you could save if you moved to a place with rent. For example, if you start regularly saving $1000/mo, then you can move anywhere where rent is under $1000/mo. The downside is that it's not immediate, and you'll have to work towards that for probably 6 months before you can see how it's working.
$10,000 a year for gas is insane, I don't care who you are. They should be providing you the vehicle or reimbursing the cost of gas with a monthly check. So the $800 of gas becomes a $800+ check. Assuming he gets a modest 12 MPG, and he's using 200 gallons of gas a month. That's 28,800 in mileage a year, which at $0.55 a gallon reimbursement that's $15,840 a year (mileage reimbursement covers wear and tear too). If his car is more fuel efficient he gets a greater return on that investment. So like, a 1988 honda accord would be a better investment, plus losing the car payment, hell keep the car and get a second one just for the job.
If you're not getting reimbursed for your mileage you're a sucker and your net pay is 1/3 lower than it actually is.
Sell the truck he relies on to do his job so he can get out from under the loan payments?
I think he meant per mile, not per gallon, which is the standard expense for where I work as well.
So if your expenses is in the ballpark of :
* $200 utilities
* $300 car
* $100 credit card
* $200 food/misc
* $200 personal gas use
Then we have $2000~ for unaccounted for expenses (if any). Once I know where your money is going I can help you be better with it. Lord knows if there's anything I learned being in debt it's how to survive not using credit cards for 2 years.
You don't have "$2000 in unaccounted expenses". It sounds like you have about a thousand, maybe less, in food/gas/etc that you throw down (which is not that unreasonable for two people and a car that you have to keep running for work), and you're left with exactly enough to pay a rent check which is too close for comfort.
In my opinion you're doing the RIGHT thing, as long as that last 850 or so is going in a bank or handling emergencies.
You're 22 and essentially supporting another human being with food, etc... you're not *supposed* to have extra money. And if you're walking home with 3k every month after taxes that's good enough.
It sounds to me like you COULD rent if you really wanted to, but you don't make enough to be quite as 'cush as you are now, so why bother.
Wait. Put money somewhere. And most importantly, get your girlfriend to work... even if she was part time that would be awesome for both of you.
we also talk about other random shit and clown upon each other
From my earlier post:
He can afford the truck just fine right now with no rent, so it's not a deal-breaker. But once you can see what keeping that extra payment every month does for long-term wealth building, it's impossible to justify it.
Especially in this case, his job is putting tons of miles and wear and tear into the vehicle, which is just trashing it's value in a hurry. It's so much more financially sane to get a good used vehicle for $4-5k that's paid for, already depreciated, and can be driven into the ground like he has to do for his job.
Also, deeply curious what meters you're reading that require 4wd? Out in the country? 300 a day?
Steam
Only the strong can help the weak.
300 truck payment
100 CC payment
850 - 1000 gas depending on price (reimbursement weekly is included in paycheck, so part of the 750. sorry I didn't cover that before)
200 utilities
and I usually budget around 200 a week for fun stuff. keep in mind no matter what I'm doing I'm paying for two, that's why its so high. so 800 fun stuff a month and I include food in that.
So I end up with about 800 a month I should be saving that I'm apparently spending frivolously
At a 12 MPG truck he's getting reimbursed $1,320 a month ($0.55 MPG reimbursement (federal)), I'll round that down to $1200 for idle costs, and subtract another $200 to account for the $200 personal gas use I already gave him to peg it at an even $1000 to cover his $850 a gallon, I can do further math when he corrects me on what his personal gas use is vs work gas use.
So, we've got $2250 (+ possible an extra $400 a month on wear + tear left over from the mileage reimbursement.)
Unless he stated a bill I'm not accounting for there. Granted that reimbursement check is a month behind, but, still, yes he absolutely has $2250 somewhere.
Yeah, but he also needs to figure out how he's spending $1600/month on "other."