Where to Trim if There’s Not Much Fat (with some situation-specific challenges)

[BuddingStoic]

[NOTE: In light of some of the (what I perceive as) harsh character judgments of both me and the person I'm living with, I'm redacting some of the personally identifying information in my original post. I'm not so sure anymore that I want even that tiny bit of personal information publicly visible in light of some of the reactions I've received here. I'm leaving up most of the information, however, for the purpose of ongoing conversation.]

First of all, THANK YOU!!!!!!! A huge “pre-thanks” for anyone who takes the time to digest and reply to this. I know it’s very long. But I’ve also seen how incredibly generous this community is with its time and attention. So my gratitude goes out in advance. :)

I already know many of you will take exception to the phrase “not much fat” in my post title once you take a look at my expenses. All I ask is that before you flame me, keep in mind that this is my very first post here EVER, and that on the items that may look “fatty” to you, I do offer some explanations below.

Me in Brief:

[REDACTED]

Current Income (Net):

Day Job:  $1,850/mo [NOTE: Net pay is $925 per bi-weekly pay period, which technically annualizes to $2,004/mo, but I like to think of my pay as “twice a month” rather than “every two weeks”—gives me a teensy bit of extra wiggle room when budgeting.]

Freelance Income:  Sporadic and can’t really count on this. I’ve made $2,655 this year so far, [REDACTED] with another expected $400 or so coming in for work already in progress, but nothing in the hopper after that.

401(k):  See “Assets” section for details; I’m contributing 10% of my gross “day job” income (with 3% employer match), re-investing all dividends, auto-rebalancing annually, and letting my portfolio grow. Personal rate of return has been 12.96% so far this year; 33.12% over past 3 years.

Current Expenses (Monthly):

Fixed:
-rent - 966
-gas & electric (avg. over year) - 70
-water & garbage - 57
-cell phone - 75
-*housecleaner - 45
-*charitable giving - 60
TOTAL: $1,273

*Please don’t freak out at these non-Mustachian-appearing expenses! See explanations in the “Circumstances” section.

Variable (monthly guesstimates budgeted):
-credit card payment – 150 [NOTE: listed under “variable” because I could choose to increase or decrease this amount]
-groceries - 200
-restaurants & take-out - 50
-car (gas) - 90
-car (insurance) - 112
-car (parking) – 15
-car (maintenance) – 50
-renter’s insurance - 8
-medical (Drs./providers) – 100 [NOTE: short-term 200/mo thru Nov. due to physical therapy]
-medical (Rx’s) - 30
-medical (OTC/misc) - 30
-household goods & supplies - 50
-cats - 50
-laundry – 10
-entertainment - 40[/li][/list]
TOTAL: $985

MONTHLY EXPENSES - GRAND TOTAL: $2,258 ($2,308 thru November re: medical)

MONTHLY SHORTFALL:  $408 ($508 thru November)

Assets:

401(k) through employer:  $95,496 (fully vested); medium-ish risk (75% stocks, 21% bonds, 4% cash); periodic automatic rebalancing (NOTE: includes outstanding loan of $11,750 - see “Circumstances” section)

Personal IRA:  $5,300 (old; not currently contributing)

1999 Honda Civic:  $1,363-$1,763  (about 140K miles; Kelley Blue Book range for a private-party sale)

Liabilities:

$11,750 - loan from 401(k) (see “Assets” above); payments currently being deducted from paycheck

$1,700 – major credit card

Expected ER Expenses:

Sadly, not even on the radar at the moment...I’d roughly guesstimate around $50K/year if I remain in the Bay Area, but so many things are in flux right now I’m not sure how I’d even predict anything more accurate at this point.

Circumstances:

I already know I have some expenses that are going to be viewed as excessive and non-Mustachian, so I want to explain them here. My intent is NOT to be a close-minded complainypants, but to demonstrate that I’ve already given these expenses thought and made certain decisions about them. If you can challenge me on them, please do so! Just keep in mind my special circumstances.

Big Picture:  My housemate/best friend and I live in one of the bedroom communities of San Francisco. I’m working 4 days a week while trying to build two businesses on the side[REDACTED].

My friend [REDACTED] was laid off a year and a half ago and has been unable to find work since [REDACTED].

My Business Ventures:  [REDACTED]

Outstanding 401(k) Loan:  [REDACTED]

401(k):  I’d really like to be contributing more than the 10% I am now, but don’t see how in my current circumstances. Whatever else, I want to avoid *decreasing* this percentage like the plague if I can (even though that would help to make up my monthly shortfall).

Living in the San Francisco Bay Area:  Yes, it’s insanely expensive. But my housemate loves it here...and frankly, so do I.  We‘ve discussed moving elsewhere, and I would do it in a heartbeat if she was willing, but she’s not, and I just don’t have it in me to fight that battle right now.

[PERSONAL INFO REDACTED]

What this means from a financial perspective is that I MUST commute to/from work by car. A bicycle and even public transportation are out of the question—this is a MEDICAL ISSUE and not a matter of choice.

When I am ultimately able to work from home, the commute will become a non-issue. But I’ll still need a car for general getting-around purposes, even if I won’t be using it much. (I have a ’99 Honda Civic that is long since paid off and which I plan to drive into the ground.)

Charitable Giving:  Technically I realize this is a voluntary expense. But it’s also linked to my religious beliefs and practice, and I would very much like to treat it as a non-negotiable if at all possible.

Expenses Where I See Room to Trim:

Cell Phone:  My housemate and I share a plan. We’re under contract for over a year more, and she’ll be reluctant to change, but I can foresee this conversation coming, especially after checking out MMM’s post about much lower-cost cell phone service.

Groceries: Should be able to trim this gradually. (I’m working on eating healthier, but it’s a long, slow process for a carb-and-junk-food addict.)

Restaurants & Take-Out:  Obviously this is an expense to trim. But I don’t think I can reasonably expect to get this to zero because sometimes circumstances do dictate speed and convenience.

Entertainment: I can probably get this down from $40 to $20 per month, but trying to eliminate ALL “fun” expenses would cause a psychological backlash, I think.

FINALLY!! :)  My Specific Questions:

#1 - Is it worth cashing out my IRA that’s just sitting there with $5,300 in it (and taking the financial hit for early withdrawal) to pay off my credit card debt of $1,700? And then possibly using the balance (which probably wouldn’t be much) to pay down as much of my 401(k) loan as possible?

#2 - In general, given the fact that I’m: (a) unable to ditch my car due to my sensory sensitivity issues; and (2) unwilling to ditch my unemployed friend and housemate (and all the expenses that I know go along with that), do you see anywhere I can realistically trim down my expenses without losing my sanity in the process?

I’m open to any suggestions, and happy to answer any questions you might want to pose. :)

Thank you again if you managed to get this far!

[SunshineGirl]

Gosh, you're on a downward slope, and all the ideas I have are in areas you have said are untouchable, so all I will do is say welcome and good luck.

And your roommate needs to get a job yesterday.

[Argyle]

You've pretty much boxed yourself in with a number of changes you're not willing to make.  So basically you've made all the changes you're willing to make. It's conceivable that you could get a better-paying job, though I suspect you're going to have reason why that's not the case.   And you're supporting your roommate to a significant extent -- in staying in the high-priced San Francisco area, in paying $250 a month for her health insurance, and in paying for a cleaner because she won't do any cleaning.  So you're in a situation where you have to make a choice between greater financial security and other things in life, and you've chosen the other things.  You know your situation and priorities best and you have chosen accordingly, I assume.  It's best to recognize, though, that if you're interested in changing your financial situation, one of your non-negotiables will have to be open to negotiation.  It is what it is.

[ny.er]

I think the benefit of reading this blog, is loosening our beliefs about what we consider "fixed." For example, prior to MMM, I considered my hair cut/color an absolute - since I go to work, and looking youngish (not gray) is important. Well, really, I just was unsure how to color it myself, and lo and behold, I figured it out, ditto cutting my own bangs. So I saved myself $60 a month without too much effort, I just needed the will to change. Along those lines, and under your circumstances, I would at least temporarily cut back the $60 contribution to charity, to $10, and put the extra $50 toward your credit card debt. Think of this like the oxygen tank on the airplane, you have to save yourself before you can save anyone else. Once your business is up and running, you can add it back. Lots of luck with your new business venture!

[TS]

If I were you I would ditch the house-mate, move to a cheaper rental, get rid of the house cleaner, charitable giving and the house-mate's health insurance costs, and decrease a number of your other bills in the process (gas etc).  I know that doesn't fit with your list of non-negotiables though. 

The situation you are in is pretty critical, and absent you and your house-mate agreeing to another way forward, this is pretty much your only option.  So perhaps sit down with her and explain that unless $X per month is cut from your budget, you are going to have to move out to a cheaper rental and leave her behind - that might help her focus on what needs to be done, so you can both work towards a solution.

[mushroom]

I agree with everyone else. For example, you need to get rid of the housecleaner. It sounds like you're tired of fighting about it but there are other compromises that don't involve spending money on a housecleaner:

1) you clean and ask her to contribute to the household in some other way that feels equivalent
2) you clean and accept that yes, it's crazy since you're supporting her in all sorts of other ways and she can't even clean while unemployed, but why not make it even more obvious to yourself what you're doing by having to be the one to clean, too
3) she starts cleaning after she realizes that it's the least she can do when you're supporting her in so many other ways

I'm guessing 3 is probably not happening...either way, you're falling behind by hundreds of dollars every month and something has to change at some point. It might help to step back and look at what your big picture goals are.

[mushroom]

By the way, I would argue that there is plenty of "fat" for you to trim - my husband and I combined spend less than you do alone while we also live in a big city and each earn a six figure salary.

[pachnik]

Not sure if your friend has tried this already so here goes. 

While she is looking for a permanent job, could she maybe do some temporary office work?  I am also an unemployed legal administrative assistant and I am doing temp work in law firms  while I look for a job.  One assignment lasted 2 1/2 months and the one I am on now is 3 weeks long.  For me, it sure beats sitting around and you get your foot in the door.  Usually temps are treated pretty well if your friend is worried about that.

Also, the last 2 permanent jobs I had came via temp assignments.  I did a good job at the companies and when they had openings they hired me.  One of the jobs lasted 5 years and I stayed at the second one for 11 1/2 years.

[Debbie M]

Your rent looks huge!  Is that your half or the whole amount?  Since you are renting and have a car, can you move further out (to someplace cheaper) until your friend gets a job and then move back?

I think there may be some fat in your grocery bill.  (Unless that $200 is for both of you.)  Can y'all try doing more of the processing (cooking from scratch, grating your own cheese, etc.)?  And reduce some empty calories?  And focus on lower-cost ingredients?

The big thing is for your friend to get a job.  Anything will help at this point.  Sometimes people get creative when the unemployment runs out.  You just can't help getting more and more open-minded about what to try for.

And also remember than any horrible changes in your expenditures you make now can be considered temporary (except the some of the health ones--so you won't be changing those).  For example, you can keep track of the amount you want to be contributing to charity each month and then repay that "debt" when you have better cash flow (that's what I do when I'm between jobs).

Or as Argyle said, realize that you have chosen to put off financial security for the time being.

[bugbaby]

Your roomie couldn't even do some baby-sitting or dog-walking?

Can she at least get food stamps??

Good luck.

I was in a similar situation with a good 'friend'*. When I evicted her she magically was able to get a new job in a new city.

*she also unfriended me on FB - but i didn't notice till someone else noted coz i rarely used FB anyway. good riddance.

[Watchmaker]

Sounds to me like you need to be talking to your friend about this.  The two of you can't afford the lifestyle you are living.  Since you want to stay together, you need to be talking about where you could move with a lower cost of living/where she could find employment.

[Argyle]

Here's a suggestion for the charitable giving.  That's $720 per year.  Currently you have no emergency fund, which is very risky.  I don't know a year in which I didn't have $700+ in unexpected expenses, from car repair to root canal to what have you.  But maybe you won't.  Why don't you stash that $60 per month in a savings account rather than giving it to the designated charity.  When your roommate is back on her feet, she can start paying you back the $250 per month.  Or your blogging business takes off.  Or some other opportunity presents itself.  Then you have the funds to establish a real emergency fund.  So you establish a real emergency fund, and you take the $60 per month, accumulated, which you have saved in a special account, and contribute it to your religion or charity.  If an emergency happens before the improvement in your financial system happens, then you'll have the money, and that's a good thing.  You can always keep track of how much you "owe" your charitable giving for when you really are flush in funds.

If, after a certain amount of time, say 2-3 years, you find that your roommate is still not contributing, and your blogging business is not taking off, and there are no other sources of extra funds, then you have some harder choices to make.

[apennysaved]

Regarding question #1, isn't your IRA working just as hard for you as your 401(k)?  If you are considering cashing it out, I would not and instead drop your 401(k) contribution.  If you cash in the IRA then you will most likely pay a 10% penalty plus income taxes on the amount withdrawn. If you reduce your 401(k) contribution, then at least you avoid the penalty.  Do you have to contribute 10% to get the 3% match?

[Frankies Girl]

I'm going to echo what everyone else has been saying:

You have plenty of fat to trim, you're just not willing to do so. Your mindset and stubbornness are keeping you poor and in danger of going into a total debt spiral that you may never recover from.

Your roommate needs to pull her own weight. If she can't find a job - any job - then she needs to be doing the housework, cooking the meals, doing the shopping and everything possible to reduce expenses and otherwise making herself useful. Saying that she doesn't want to do something, or throwing a fit about not liking to clean up or do without the extras? That's ridiculous under these circumstances, and I wouldn't put up with that from someone that is supposed to be a good friend, and that's not the kind of attitude that I'd expect from a good friend, either. She's taking advantage of you and you're making excuses for her behavior. If I couldn't find a job in my field, then I'd be working at whatever I could - running a cash register, stocking shelves, waiting tables, whatever it took - and I'd damn sure not be expecting my partner/friend to pay for everything and expecting my partner to pay a house cleaner to do things I was perfectly capable of doing either.

And spending money on extras like a house cleaner and eating out and entertainment? You don't have the money. There is no reason whatsoever to waste money you don't have on these things, as they are wants, not needs.

I would cut the charitable contributions, house cleaning, entertainment, eating out, then ditch the cellphone plan (get a pay as you go or one of the cheaper $20 plans), reduce the food bill and friend would be out working at something to make up the rest of the shortfall, and I'd be looking for a second job if at all possible to start building up an emergency fund.

Something has to give - you're just going to have to decide if your future is worth making the hard decisions for.

[StarryC]

You have a very low income and live in one of the most expensive places to live in the world.  Your income for an admin job is likely what you could make anywhere in CA with a similar job, as it is only slightly above California's minimum wage. Therefore, I believe you must move.  Move to someplace where you can pay closer to $500 rent and you can get a similar paying job (many many places).  Maybe your roommate will find a better job there too, since she hasn't had any luck where you are.  Maybe spend less on gas, probably also less on parking.

So, I tithe.  However, Your monthly shortfall is currently substantially more than you are giving.  Assuming you are a Christian, I think there is plenty of Biblical support for not giving yourself into debt.  Give what you have, even 2 pennies, but not what you don't have.  Give first, sure, but then you need to get everything else in order.  Right now you are tithing on a credit card, which is not acceptable or wise.  If it is so truly important to you, you need to realign EVERYTHING else.  That's kind of the point.  If you can't see clearly on this, go to your religious leaders and open you finances to them and see what they say. 

Also, you are "saving" money you don't have in the 401K.  Stop that now.  You won't make up the credit card interest from the market.  You cannot save money you don't have. 

You need to sit down with your roommate and go over all of this.  Does she know that you are spending $500 a month more than you make, in part to support her?  Maybe once she sees that she will be more willing to compromise.  Based on your fixed expenses, even if you cut out pets, eating out, entertainment, the cleaner, the tithe, the cell phone, and cut $50 from your groceries, you are still $242 short a month. 

[CU Tiger]

As long as you chain yourself to this child/best friend, who cannot even clean the house while you pay for her lifestyle, I do not see your situation improvimg.

Best of luck.

[ioseftavi]

FINALLY!! :)  My Specific Questions:

#1 - Is it worth cashing out my IRA that’s just sitting there with $5,300 in it (and taking the financial hit for early withdrawal) to pay off my credit card debt of $1,700? And then possibly using the balance (which probably wouldn’t be much) to pay down as much of my 401(k) loan as possible?

#2 - In general, given the fact that I’m: (a) unable to ditch my car due to my sensory sensitivity issues; and (2) unwilling to ditch my unemployed friend and housemate (and all the expenses that I know go along with that), do you see anywhere I can realistically trim down my expenses without losing my sanity in the process?

I’m open to any suggestions, and happy to answer any questions you might want to pose. :)

Thank you again if you managed to get this far!

You posted "A huge “pre-thanks” for anyone who takes the time to digest and reply to this. I know it’s very long. But I’ve also seen how incredibly generous this community is with its time and attention. So my gratitude goes out in advance..."

So hopefully you read my entire response as well.  I realize you're probably still reeling from all the above facepunches, so I've tried to keep my post civil and levelheaded.

To answer your questions:

#1) No.  The tax and early w/d penalty hit you will take will eat up any realized savings.  The 'solution' you have proposed is also ignoring the root of your problem: You spend more - a lot more (22%, assuming $408/$1,850) - than you make.  Temporarily covering this up by dipping into your some of your assets is not going to fix your problem.  You need to spend less, and it needs to happen yesterday.  Spend less and use the savings to pay off your highest interest debts first: first your credit card, then your 401(k) loan.

#2)  Can you trim places?  Yes.  Posters above me have mentioned the categories that appear ripe for cuts: Housekeeper, charity (temporarily), your cellphone ($75/month is a fortune on these message boards), restaurants (should be zero at the moment, I'd say).

However, to expand on number 2:  You are doing yourself a huge disservice by declaring all of your biggest cost categories as "off limits".  This is literally the worst possible mindset you could have for changing your financial habits. 

Imagine if you wanted to save money on a wedding, but you're currently overbudget.  Let's say you've gone overbudget (and won't reconsider) the reception venue, your dress, the rings, your photographer, your videographer, your caterer, or the wedding rings.  Do you think you can save enough on one minor expense I haven't mentioned - flowers, let's say - to make up for the fact that you're overbudget in all of your major categories?

The above example is a metaphor for what you are doing.  This is why the reaction you're receiving is so negative.  You are badly overbudget on major categories, and your budget has plenty of fat.  However, you aren't willing to examine a large variety of major expenses: rent, car, roommate contribution, healthcare, location, charitable giving.  You've asked us to help with the "other" expenses you have, all of which are minor and won't do enough to move the needle.

If you really want to try and cut expenses in other categories, go switch your cellphone to an MVNO.  You are paying too much at the moment.  Yes, I'm aware that you'll pay an early termination fee, but if you get your bill down to $25/month, you're probably going to find that even with the ETF, you are realizing a BIG net savings within a few months.

The other reason I suggest switching your phone:  You are clearly a savings weakling.  I mean that with no offense, but from the way you write, it's just clear that you haven't developed the 'muscles' yet to think REALLY CRITICALLY about what a "fixed", non-negotiable expense is.  You need to build up savings muscles so you can tackle bigger problems - like your roommate, and your rent.  But perhaps starting out with a small switch, like your cellphone, will get the ball moving.

You also don't seem to understand that a NEGATIVE SAVINGS RATE, which is what you have, is a serious problem.  Most people on these message boards save somewhere between a quarter up to perhaps 60% of their takehome pay.  You are currently spending nearly 25% more than your take home pay.  This is not...at all...OK.  You sound WAY too concerned about stuff that is irrelevant with regard to your financial situation (my roommate is a close friend, talking with her about money is difficult!) and WAY too unconcerned with the fact that every month you spend a bunch more than you make.

Hopefully you read all this and give what people are saying a good hard think.  Best of luck.

[apennysaved]

I agree that you should reevaluate many of your expenses and determine what really is important to you...continuing to be in debt or avoid some of the "wants" until the situation improves.

Here is a good thread from this forum about getting side gigs.  Your roommate & you should take a look and see if it helps you determine other ways to make some side income.  If your roommate could figure out a way to make $500-$1000/month while looking for a job, it would help.   Actually, anything would help!

https://forum.mrmoneymustache.com/ask-a-mustachian/who-has-a-side-gigjob-that-brings-in-extra-cash-share-with-us!/msg149879/#msg149879

Finally, would you & your roommate consider volunteering instead of tithing temporarily?   I am in a volunteer organization, and I can't remember the dollar amount exactly, but a volunteer hour in my area is worth about $20-$25/hour on average.  So, if I didn't volunteer, the charity would have to spend an equivalent amount to hire someone to do the work that I volunteered to do.  Make sense?  Considering the circumstances, I think it is acceptable for you to put in man hours instead of $$$ plus it is great networking for both you (draw attention to your blog) and your roommate (networking).  I do real estate part-time and ended up helping two other volunteers I met purchase homes grossing me $7700 in unexpected commissions.  Talk about win-win!

[ChicagoGirl]

When I started this journey there were a several areas of my budget that I thought were non-negotiable, but guess what they are...and I am better off now making those changes I thought were painful to make. I now love to challenge each part of my budget to see how I can reduce it. It's time to get creative, change habits and realize ALL budget categories are subject to review.   

One suggestion...start scheduling regular meetings with your roommate. It would be time set aside to solely discuss your financial arrangement.  That way the conversation about money is always saved for that designated time. I live with a relative and this works out well for us.  We call it our 'corporate meeting' it's our time to discuss bills and overall issues of living together.  First item for your meeting agenda "Contingency Plans" you two need to discuss what is going to happen if your roommate doesn't get a job and runs out of money. If you and your roommate want to be a team, it's time to start acting like one. It's time to lift the ban on topics that are too sensitive to discuss and get creative in your problem solving. If the roommate is resistant to this, then she is not interested in being a part of a team. I wish you well and are rooting for you!

I would suggest reading other forum member's journals and you will see the progression of their journey and how they problem-solved their way through changes that just seemed insurmountable. Or maybe suggest to your roommate to read some of the journals and posts, might be some motivation for her or give her ideas on how to make additional income. 

[NeverWasACornflakeGirl]

Hmm ... I have to agree with the others that the "non-negotiables" are making and keeping you in debt, as is your relationship.  Best of luck.

[FrugalZony]

You obviously KNOW what needs to be done, yet you don't want to do any of it!
You either come around and realise that wether you like it or not you have to change some things you don't want to change (same for your
spouse like chained to you housemate) or you'll just get yourself deeper into a hole!

Either way Good luck!

[MrsPete]

Yeah, I've gotta echo what's been said:  You know the answers, but you don't want to take those actions.  This is fine.  It's totally your choice, BUT you can't complain that you're not getting ahead if you're not willing to make the tough choices.

You're working towards self-employment, which sounds like it'd be good for you.  Is this realistic?  Are the businesses really growing to the point that this is a realistic option?  If so, wonderful -- put your efforts into it.  If not, let them go and find a corporate job.  Sometimes we all have to do things that we hate. 

House cleaner:  I see a solution here.  YOU become the house cleaner.  Your friend won't clean.  Okay, so let her pay you to do the cleaning.  She's paying someone else now, so no problem from that standpoint.  You won't feel taken advantage of if you're being paid for being the only person cleaning. 

Volunteering instead of actually giving charity sounds like a viable solution.  You're not ignoring your responsibility to the common good, but you're also not giving what you don't have. 

Groceries and restaurants can almost always be decreased. 

As for the roommate situation, she has to start pulling her weight, and you have to stop allowing her to be your excuse.

[swick]

Welcome to the boards, BuddingStoic I imagine it wasn't very easy to post. There is lots of good advice here. What it comes down to, is you are spending over 60% of your income on housing (not including a housekeeper) What is the plan if your friend can not find a job and empties her savings?

As far as your friend goes, you both have to accept that in all the ways that matter - emotionally and financially you are a partnership. You make many, many concessions to keep the peace and knowingly or not she is taking major advantage of you. You are not two separate people who happen to live under one roof, otherwise you would not be sacrificing your happiness, security and goals for her.

It concerns me that you post she has been looking for "High level admin positions" at this point in the game when she has responsibilities, she needs to either start getting creative or settle for something less that will allow her to work her way back up.

There are lots of threads about "getting your spouse on board" that you should read and consider. If you have decided that you are more then roommates, then you both have to step up and act like it and work together, the burden shouldn't rest on your shoulders alone.

I work with kids with sensory issues, so I'm aware of some of the challenges you may face, and I am just guessing, but some of the value you find in having your friend live with you might have to do with dealing with your challenges? It is important to have support, but at the same time forcing yourself to go to a job that you say you hate and probably makes your issues worse is going to have a very negative effect on you too. Is it possible your friend is just not aware of the strain she is placing on you? If you have thought a lot about it, and you are willing to sacrifice so much to live with her there must be reasons, which makes it that much more important that you approach your situation like a true partnership. You need to find out if she is willing to do that.

As far as your charity go - why don't you offer to use your skills as a blogger (and I'm assuming copywriter) to help out your charity of choice? These are skills that are completely inaccessible to most charities and non-profit groups due to the high cost and lack of people within the organizations who have the skills. Some web copy, or a donation letter template, or something along those lines that could bring in ongoing donations would go much, much farther then what you can afford to donate now. It would also give you some experience and allow you to build a portfolio.

Good luck!

[impaire]

I hope you will drop in to let us know how you're taking all of this. The posts may sound harsh, but really are trying to be helpful in what is an emergency.

I tend to agree with much of what has already been said, but I will not repeat it. I just have two thoughts to add:

1) It sounds like your friend is dealing with a mental health issue right now. Depression, anxiety, rage, denial of reality... It could be anything, and I am not going to blindly diagnose her (and I could be wrong of course). If she is unemployed and suffering physically, there is really nothing surprising about this. I'd suggest you help her address this issue first, as it is preventing both of you from solving your problems. Get some self-help books from the library, try to find free support groups, etc. Even if we resist the temptation of blaming her for her reluctance to adapt, and can pity her (and you) for it instead, she sounds like she needs help.

2) your freelance business: I understand that you are focusing your extra-energy on blogging right now, but since your friend is a secretary, could you work together on this? Try to drum up some business, she prepares the work, you review and send it. It will take you more than zero time, but much less than doing everything by yourself.

Good luck.

[EDITED FOR CLARITY]

[BuddingStoic]

Hi, everyone--this is just a quick reply for now to let you all know that I'm still here (though, yes, reeling a bit from all the facepunches). I'm taking everything you've said on board, one way or another, and will be back to post later (probably tomorrow at the rate today is going) in more detail.

Short version, though--I hear what you're all saying about the need to be willing to make changes where I'm currently unwilling. And you have some good suggestions.

To those of you who responded in the spirit of my ask (which was far from easy to post), thank you very much for your candor. It's greatly appreciated.

And to those of you who appear to have used this as a platform to freely indulge in judging my and my housemate's characters (as a sucker and a manipulator respectively, whether or not those were the actual words you used), I'll simply say that you don't know the whole story and that I am FAR from being a weak-willed pushover. You don't know me, you don't know my friend, and you don't know anything close to our full situation--only the financial aspects which I've outlined here.

I know this is all hot-button stuff, and I'm taking that into consideration as I observe my own reactions to what you wrote. But even so, I'm an intelligent and thoughtful person who has thought through these issues pretty exhaustively long before posting about them here. A little more gentleness would have been appreciated. (Again, this is directed ONLY at those of you who seemed to get judgmental about my situation. Not all of you did!)

Back later to comment further...and thanks again.

[Norrie]

Everybody has already addressed the financial piece, but from a clinical standpoint, I wanted to recommend a book called 'Co-Dependent No More'. It may sound judgmental of me, but I've got some experience with this, both professionally and personally. It's a wonderful book for learning more about co-dependency, and about making positive life changes.

http://www.amazon.com/Codependent-No-More-Controlling-ebook/dp/B00BS027FC/ref=sr_1_1?s=books&ie=UTF8&qid=1381771697&sr=1-1&keywords=codependent+no+more

My thoughts are with you, and I'm hoping that you can make some positive changes. When I first posted, I listed a couple of absolute non-negotiables too. People told me to get over my bad self, and at first I was all, "but...but...this is a special snowflake situation". Then I sat on it. Thought about it. Went back and re-read their advice, and low and behold, they were absolutely right. There's still one thing that I won't give up (sending the kids to their mellow private school), but heeding the rest of their advice will save me thousands and thousands a year.

Don't take the comments about your friend too harshly. We only know what you wrote, and what you wrote makes her sound like a lousy friend who takes advantage. She is probably a lovely person who brings joy and sunshine to those around her, but we don't know that (or care about it for the sake of this board).

Finally, Ms. MMM's advice about having your roommate pay YOU to clean is genius. Seriously. Brilliant.

[Dee18]

I think many others on this forum would agree with you that personal relationships are just as important, if not more so, than financial planning.  But you have asked for advice on your budget which brings us to the basics:  either you need more income or you have to spend less.  Not only do you currently have a monthly shortfall, but you are at a point in time where you need to significantly increase your resources for retirement (unless you have a pension not mentioned in the facts).  It seems logical that your friend should provide some of that additional income, at least to cover the insurance and housekeeping costs.  If this means working at Starbucks or Target part time, so be it.  I don't suggest you take on another job because you are devoting your spare time to other money making pursuits. If you want to earn the additional income yourself, that is another solution.  Maybe you, or your friend,  could just work from now to the end of the year in retail evenings and week-ends for the holiday season.  Or you can cut spending, as others have suggested, by paying only for needs. Perhaps your could set a 3 month period during which you commit to no eating out, no prepared food, no housekeeper, no charitable contributions, ie nothing that is not essential for your existence.   It is hard.  But it is not going to be easier to cut spending or earn more 10 years from now.  Your coming to this forum and posting shows you are committed to changes now.  Best of luck. 

[ioseftavi]

Hi, everyone--this is just a quick reply for now to let you all know that I'm still here (though, yes, reeling a bit from all the facepunches). I'm taking everything you've said on board, one way or another, and will be back to post later (probably tomorrow at the rate today is going) in more detail...
[snip]

Back later to comment further...and thanks again.

Good on you for reading everything and coming back to post again.  I know that a lot of that probably felt pretty harsh, and as you acknowledged, people here DON'T know anything with regard to your interpersonal relationships.  They're doing the best they can with the info they've got.  Responses written with the best of intentions from MMMers are likely to feel unbearably rude/cruel to someone who's not used tackling budgeting from a "cold hard financial facts" point of view.

Best of luck - looking forward to hearing what your first steps are.

[Fletch]

I too have a complicated roommate situation that is financially more expensive but rewarding in other ways, so I understand where you are coming from.

Picture your priorities as you listed them here as a bracket, like the ones they use advancing in sports tournaments. You've made a lot of decisions to get to this point: you have established that you prefer San Francisco to anywhere else, that you prefer living with your roommate to other living arrangements, that your car/sensory issue situation is better than public transit or biking. Now, you need to continue evaluating the remaining budget items compared to all the other budget items (or life items, however you prefer to look at it). Do you prefer living in San Francisco or living with your roommate? Do you prefer living in San Francisco to living in a less sensory stimulating environment? Do you prefer paying for a housekeeper for X months to paying for your blog mentorship? Those answers will give you a better ranking for your priorities, and the items that end up toward the bottom of the list need to be re-evaluated completely. You are not yet at a point where you can say "I want everything as it is now in my budget/life, this AND this AND this AND this", you still need to be asking yourself "which do I want more, this OR this OR this". If financial security is at the top of your life priorities it must unseat another priority, and internet strangers can only guess at which priority(ies) will be the ones to go. If you go through this exercise and everything as you list it here is more important that financial security (at least in the short term), then at least you know that this is the life that aligns with your priorities, and an early retirement forum is perhaps not the best place to seek advice* (but maybe your roommate or your blog mentor are!).

When I did this, living with my current roommate was more important than traveling, more important that acquiring a lot of things, more important than retiring at 35, 40, or 45. Now that I've been doing this for a while, other priorities are moving up the list, such as being close to the outdoor activities I love, completing a graduate degree, and relationships with people in my life besides my current roommate, and my decisions are starting to reflect those values instead.

*This doesn't mean you aren't welcome here, just that advice here won't help you if you don't/can't take it.

You should be able to withdraw your ROTH contributions without penalty, but only if getting through this time and supporting your roommate are more important to you than that money in retirement. That's a pretty terrible idea though, you'd be better off slowing down the tithing or housekeeper or eating out (or some combination of the above) temporarily while you focus on the CC and 401k loan payback. If you don't learn how to live without a few things, and you cash out ROTH contributions, you will be right back in this kind of predicament again soon, just without the option to cash out the ROTH and bail yourself out.

[BoulderTC]

I don't have much to add about your financial situation. I want to add, though, that I think most of the posters here realize that often there are good reasons for something to be non-negotiable. But, without stating why they're non-negotiable, posters might assume you're just being stubborn.

For example, Norrie had an interesting situation that she was asking for advice about lately (that she refers to above). She declared that her childrens' expensive school was not up for debate, and of course the MMM community still challenged her to think about reducing that cost in some way. Once she gave some context, I'd say the crowd was pretty unanimous in agreeing with her that the cost was completely worth it and everyone affirmed her for her decision. And then, people were able to come up with creative ways for her to reduce the cost (like finding a job at the school and hoping for a tuition discount) without having to give it up.

Maybe if you add more context to some of these situations, we can see why they're non-negotiables? As it stands, I don't feel we have enough context to understand (and/or empathize with) why you must live in San Fran, why you must have a house cleaner, why your friend can't take a non-dream job, etc. No pressure - as I know it can be hard to share those types of details, but feel free to debunk some of the assumptions that you haven't thought through your options, if in fact you have.

[Simple Abundant Living]

I can't really understand your relationship to your roommate, so I will act as if she is your SO/wife.  I can understand loving (and that's what it is, right?  Even if it's platonic?) someone so much that you're willing to go in debt for their needs & wants.  It doesn't mean it's right.  We make a lot of financial decisions based on love and companionship that may not be in our best interest.  Suze Orman always says "People first", and I agree. 

However the situation you are in is unsustainable, and could lead both of you to ruin.  You are in a debt emergency.  Your SO needs to understand this.  It is time for some tough love (for both of you), which we all need at some point.  The advice given here may seem harsh, but it is meant to give you the wakeup call you really need.  The unfortunate thing about debt, is that it gives us a false sense of "we're ok".  If debt wasn't an option and you had a cell phone or groceries; or rent or a housecleaner; you could and would make some tough decisions.  I would recommend a cash budget that is hard and final.  No dipping into 401K's or anything else to pay for conveniences.  Your SO, as others have said, needs a job and/or needs to be contributing.  I have been a SAHM for years and have helped our budget by cooking from scratch, keeping a garden, cleaning and landscaping, preserving produce, and finding 100's of other ways for our family to economize.  Until she is employed, she should be an more of an asset at home, not a liability. 

If you find it hard to talk openly about these things to your SO, I would consider reading the books mentioned about co-dependence. 

[Iron Mike Sharpe]

There's a lot of room in that budget to trim.  If you don't want to, that is up to you.  In that case, your household needs to get significantly better paying jobs.

In short, you need to either cut costs, increase revnue or some % combo of both.  Otherwise, you are just wishing someone can wave a magic wand at your original post hoping then numbers will balance out.  And, as far as I know, magic wands don't exist...yet.

[donutsandcoffee]

You are not leaving a lot of options. You need to reduce your expenses or up your income by at least 500 bucks. How about a night job? How about a cheaper phone plan (Airvoice is $10)? No housekeeper (just do it yourself)? Food stamps for your roommate? No eating out? Call an insurance broker to try to get cheaper insurance?  Do you live in a two bedroom place? Can you both share one room and get another roommate? That would cut your rent in half and your utilities in 1/3rds (2/3rds for you, 1/3 for the new roommate). If not, consider moving into someone else's 2bd+ and sharing a room. The same savings would apply if you can get the right rent price. If you will reconsider the move, Sacramento is nice and has much cheaper rent than the Bay.

[galliver]

First: Kudos for sticking with your friend. Is that the financially sound decision? Perhaps not. But as we have seen in at least one other thread on this forum (by user iwanttobelieve), some people don't have a lot of options, in the form of people to turn to for help when they need it. I think the kind of true friendship where you will stand by each other when something is actually on the line is admirable and worth more than money in the bank. However, as you are hemorrhaging money and can't live within your means given the 'non-negotiables,' if there IS someone else she can ask for help, she should.

Second: this isn't a problem you alone can solve.  This is a problem that takes both of you to solve. You can't not talk about your budget and how to balance it; that is truly non-negotiable. Even Democrats and Republicans can broach the subject. So can you. Even if every conversation devolves into a tearful battle (goes without saying, hopefully it won't).

Third: It sounds like your roommate is a mature adult, capable of working.  Finding work, especially in such a populous and desirable area as SF can be very difficult, I'm sure (even retail/food service), but I would assume that eventually your roommate will find something.  When you finally have your (calm and mature) conversation about money, inform her that as she is an adult, it would be fair for you to be paid back for any living expenses you incur on her behalf during this tough time--half rent, utilities, groceries, whatever is applicable. Obviously if she contributes in other ways (cooking, cleaning, errands, etc) determine a fair "break" on those grounds. Emphasize that you have limited funds and credit, so she doesn't think this is a blank check; the idea is to eliminate the current (perceived?) lack of consequences for continued joblessness. If you (or others) think this is harsh, this is what my parents did for my college expenses. The repayment terms are extremely generous, but that expectation kept me responsible for my choices both then and now, and gave me an incentive to pursue paid opportunities.

Good luck! You're in a tough place!

[cats]

I think you've already gotten some great suggestions, now it's up to you to decide what to do with them.  One thing I thought I'd throw out: is there any way you two could take on with a third roommate, even for a short period (say, 6 months)?  I'm not sure what your current set up is, but yeah, it is possible that I'm suggesting you two share a bedroom if you don't already.  Taking on with a roommate could give your current roommate some cashflow, as well as alleviating some of your cashflow problems.  Frankly, given your current income, you really canNOT continue bleeding out so much money in rent every month. 

[StarryC]

If you live close enough to San Francisco, and are willing to really put some effort in to it, AirBnB could be the way to do the "new roommate" thing half-way.  Private rooms are renting for $50-140 a night. 

Either you or your roommate could de-personalize one bedroom to allow it to serve as a guest room when you have a reservation.  Then, bunk up in the remaining bedroom.  When there isn't a reservation, you can sleep in separate rooms.  If you can get 10 nights a month at $50 a night, you are greatly improving your situation.  And, depending on location and apartment qualities, you might be able to do $70-$100.  If you have a "master" with a bed and private bath in a good location, you could probably do $100 a night. 

[TS]

I'll have another go at answering your question within your list of non-negotiable criteria.

Given how tight your circumstances are, you need to start by budgeting for your entire monthly income ($2004 per month) rather than pretending you only earn $1850.  That means you have a shortfall of $204 per month ($304 until November).  You also mention repayments on a 401k loan that don't feature in your budget - for the purpose of this analysis I am assuming this is taken care of and the $2004 is what is available to spend.

Once we put aside your non-negotiable expenses, there is a relatively short list to focus on:
- You can't change your cell phone plan for a year, but you should reduce this as soon as possible.
- Given you have said you won't cut restaurant/takeaway to $0, let's cut it in half instead - save $25 per month
- Cut entertainment to your specified minimum - save $20 per month  (Personally, until your credit card is paid off I would cut this to $0.)
- That leaves groceries as your last negotiable expense.  I would try and cut by a quarter - save $50 per month

That gives you total savings of $95 per month, leaving you $109 per month short.  Cutting your charity contributions and cleaning will practically get you there ($105 per month).  I would also give serious thought to temporarily reducing your 401k contributions to the minimum required to get the 3% match, and directing the extra, plus all of your freelance income, to your credit card.  This should see your credit card debt of $1700 paid off in less than 3 months and free up $150 per month.  You can then resume your 401k contributions at 10%, and either save the extra $150 per month (or if you really need to, go back to making your charitable contributions and paying for a cleaner). 

Given you can balance your budget without it, I would avoid cashing in your IRA.

[MrsPete]

And to those of you who appear to have used this as a platform to freely indulge in judging my and my housemate's characters (as a sucker and a manipulator respectively, whether or not those were the actual words you used), I'll simply say that you don't know the whole story and that I am FAR from being a weak-willed pushover. You don't know me, you don't know my friend, and you don't know anything close to our full situation--only the financial aspects which I've outlined here.

First, financial and the emotional aspects of anyone's life are closely intertwined.  What you want and how you choose to spend are closely intertwined topics.  The main belief on this board is that you should spend consciously, make decisions that line up with your values, adhere to your long-term goals.  Thus, it's really impossible to separate emotions from spending.  In fact, I think you've made that more clear than most people.

Second, we only know what you've told us.  Could it be that you're more accepting of these circumstances "in the flesh" -- when emotions are involved -- yet when you see them laid out in black and white, you're forced to see them more clearly, more objectively . . . and that's the source of the discomfort? 

[zarfus]

I'm sorry you felt like you were being personally attacked, I didn't read this post until after you made your OP updates.  Then I read all of the responses, and frankly, I agree with them.

Your housemate is an (the?) issue, FINANCIALLY.  1.5 years of contributing nothing financially is inexcusable.  Would you ever do that to your friend?  Switch positions with her in your mind, I'm honestly curious as to what you would do if you were her.  The reason it seems like people are attacking her is because everybody knows a person like this from this kind of situation.  Most of the time, they were indeed mooching.  I believe you when you say her intentions are good, but something's got to change, your situation is unsustainable. I think deep down, you know this, which is why you're here. You seem like a level-headed person.  Talk to her, and come up with a long term solution (if being a housemate is going to be long term).

Good luck! I think your budget (besides rent) looks fine!

[gimp]

In light of some of the (what I perceive as) harsh character judgments of both me and the person I'm living with, I'm redacting some of the personally identifying information in my original post.

No, that wasn't personally identifying information. Personally identifying information is stuff like names, addresses, and so on. What you redacted is the information about the situation that is critically bad, that you are asking help for.

It sounds like you have a girlfriend you're taking care of, who refuses to even help with house work while you're working. I imagine this is because she's looking for jobs literally every minute of the day, for twelve hours a day, right?

Cut your groceries by half, cut your cell phone bill by half, get rid of your charity giving (it's a choice you can't afford), the housekeeper, and you get pretty close to parity.

Next, see about renegotiating your insurance. You're paying, what, 13-1400 a year? See if you can get that reduced by several hundred.

This should save ~250 a month.

[cats]

Honest question, which I hope you will not take as a personal attack.  Does your roommate have as complete a picture of your financial situation as what you have just laid out here?  If she does not, I would strongly recommend that you sit down and let her know what all the numbers are.  You don't have to phrase it as "look how broke you are making me", but if you are going to behave as a partnership, she should have all this information (maybe present it as "I can't make my budget add up, do you have any ideas for what I could do to reduce my expenses?" to make it less potentially attack-y).  If you look through the forums, you'll see there are definitely cases where a less frugal spouse or partner simply wasn't as aware of what the inflow/outflow situation was, so they were oblivious to the true cost of their behavior.  Even in a partnership where both halves are frugal, communication about this stuff is key, because it's very unlikely that you will both just naturally happen to have EXACTLY the same set of information coming at you.

Also, while I know you say you don't want to bring up certain issues with her (moving, utilities, housecleaner), I would suggest that you consider at least putting the ideas out there.  You don't have to turn it into a big thing, but it's possible she's changed her mind a bit since whenever you last discussed things, and hasn't said anything because she thinks you are still wedded to the conclusion of the previous discussion.