26 Year Old Business Assistant/bad habits and student debt

[DreamNGO]

Hey Everyone,

I am new to the Mustachian lifestyle and I enjoy reading the posts on this blog. I would like to make better decisions with my money to become financially free.

Here is my profile

Income: Monthly $2,200
ME: Biweekly After Tax, Tax Sheltered Pension (Current Value $20,466.71), 403B (Current Value $1,508.94), Health, Dental, 1100.00
Credit Score 640
Single no spouse, no kids

Current Expenses Monthly

Cell Phone T-mobile $89 still paying off the HTC one phone payments
Internet Comcast $62
Electric Bill $93 a month based on last year’s total bill of $1,123.75
Rent 1bdr Apartment $565
Student Loans
Chase 19,000 Monthly payment of $200 at a rate of 8.75
Fed Loans 37,000 6.8% Percent Payment of 335 per Month
Total Loan Debt = $52,000
Car Insurance $75
Contribution to my Mutual Funds $50
Fixed Expenses are $1469.00

Variable Budgeted Expenses
Groceries = $110 (I don’t buy juice, candy or snacks. I try to buy things that I can cook and will last me the several days out of the week. Soups, peas, roasts, stews etc. Never buy lunch or fast food)
Gas = $80 per month I commute 1.7 miles back and forth to the train station that takes me to work 5 days a week.
Train Commute = $105 (($1*25) + (3.20*25)) $1 per day to park, the free lot fills up at 8:05am $3.20 roundtrip per day.
Entertainment Allowance = $125 I don’t spend this much on drinks but I do have the bad habits of going out with my friends, buying bar food and those expensive drinks at the club. I know this is the first thing that needs to be eliminated.
Laundry = $30 a month
Variable Monthly = $450

Total Monthly Payments = $1919.00

Realistically I should have over $250 a month to save or invest but this never happens. I always run into issues with my car or parking tickets in Philadelphia or I will need to send money to my mom to help them out every other month. I am also in school to get my MBA so I have to pay the school fees out of pocket which is $1,548.00 per year. I will be done with the program in Spring of 2016.

My job is paying the tuition portion of my bill thank God. I came to this blog seeking any help on retiring early or at least eliminating my student loan debt. I am tied to my job until I am done with the MBA program; once I am done I will be looking for a higher paying job. I eventually want to retire from this rat race and eventually run my own free health clinic in the Caribbean.

What are some ways that I can cut down on my spending?

How should I tackle my student loan debt?

[BrendanJ45]

#1 Point - YOUR HAIR IS ON FIRE!!!! (I paid off 110k in Student Loans in two years after graduating at age 26 as a preface)
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

Health Insurance: Switch to HDHP immediately if you are not in one already.
Cellphone: As soon as you are off contract (or sooner depending on ETF) find a cheap solution, most seem to recommend Ting or Republican Wireless.
Internet: Call comcast and ask for retentions department to get an introductory deal, I pay $35/month for 50mbps down and I call them every year to get introductory rate.
Electric: Too high, especially when you don't even do laundry. See http://www.mrmoneymustache.com/2011/05/10/ill-show-you-my-electricity-bill-if-you-show-me-yours/
Student Loan: Start tackling that 8.75% IMMEDIATELY AND AGGRESSIVELY.
Car Insurance: Shop around every 6 months, currently I pay about $40.
Mutual Fund Contribution: Cut it until your hair is less ablaze, unless it is company matched.

Groceries: Can probably trim a good amount (eat less meat, shop for best prices). http://www.mrmoneymustache.com/2012/03/29/killing-your-1000-grocery-bill/
Gas: Stop driving 1.7 miles to the train stop. Get a damn bike and use it every day, stop being lazy.
Car: In fact consider ditching your car entirely if your are really committed. I went carless for 1.5 years after graduation. ZipCar/Car2Go/RelayRides are great options for sporadic car use.
Train Commute: Perfect, don't change.
Entertainment allowance: WTH, YOUR HAIR IS ON FIRE!!! Drink at home if you have to, don't pay for drinks at a bar/club ever.
Laundry: Find a friend, line dry most items, only wash clothes when stinky/dirty, etc...
Variable Monthly: $450?!?!?! Re: YOUR HAIR IS ON FIRE. Serious note, you need to itemize better if you want more detailed help.

It will be hard, but it sounds like you have your dream in mind and aren't a few small sacrifices worth living your dream as quickly as possible! :)

[Future Lazy]

Echoing some of the above:

You don't get to have luxuries if you have debt - it's fun to go out, but it's expensive to not spend that extra money on your debt. Just do it, man. Invest in a copy of Cards Against Humanity, invite your friends over and make them bring their own booze. My bet is that you can feed them all at a party for the same price as your bar meals.

Ride a bike (or walk 45 minutes) to your train station. Exercise + saving money = win. (Oh, and then if you have the guts, give up the car! But I'm having a hard time with that myself, no hard feelings :)  )

[GardenFun]

I did the whole work/MBA thing and while it can be mentally taxing, there are semester breaks that are prime opportunity to make some extra money to throw at the high interest student loans. 

During the holiday break, get a part-time job.  It can literally be anywhere within walking/biking distance.  Work nights/weekends.  See if you can score $1000-1500.  If it isn't stressful, look at carrying it over for the weekends during winter.  Ditto for summer nights/weekends.

You need to find a way to generate extra money that goes directly to your student debt. 

 

[mozar]

Long term you should think about how much you want to support your mom. Consider giving her a set  monthly amount each month and no more money after that.

[DreamNGO]

#1 Point - YOUR HAIR IS ON FIRE!!!! (I paid off 110k in Student Loans in two years after graduating at age 26 as a preface)
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

Health Insurance: Switch to HDHP immediately if you are not in one already.
Cellphone: As soon as you are off contract (or sooner depending on ETF) find a cheap solution, most seem to recommend Ting or Republican Wireless.
Internet: Call comcast and ask for retentions department to get an introductory deal, I pay $35/month for 50mbps down and I call them every year to get introductory rate.
Electric: Too high, especially when you don't even do laundry. See http://www.mrmoneymustache.com/2011/05/10/ill-show-you-my-electricity-bill-if-you-show-me-yours/
Student Loan: Start tackling that 8.75% IMMEDIATELY AND AGGRESSIVELY.
Car Insurance: Shop around every 6 months, currently I pay about $40.
Mutual Fund Contribution: Cut it until your hair is less ablaze, unless it is company matched.

Groceries: Can probably trim a good amount (eat less meat, shop for best prices). http://www.mrmoneymustache.com/2012/03/29/killing-your-1000-grocery-bill/
Gas: Stop driving 1.7 miles to the train stop. Get a damn bike and use it every day, stop being lazy.
Car: In fact consider ditching your car entirely if your are really committed. I went carless for 1.5 years after graduation. ZipCar/Car2Go/RelayRides are great options for sporadic car use.
Train Commute: Perfect, don't change.
Entertainment allowance: WTH, YOUR HAIR IS ON FIRE!!! Drink at home if you have to, don't pay for drinks at a bar/club ever.
Laundry: Find a friend, line dry most items, only wash clothes when stinky/dirty, etc...
Variable Monthly: $450?!?!?! Re: YOUR HAIR IS ON FIRE. Serious note, you need to itemize better if you want more detailed help.

It will be hard, but it sounds like you have your dream in mind and aren't a few small sacrifices worth living your dream as quickly as possible! :)

Thanks for the advice @BrendanJ45 I am going to look into these articles immediately.

I need to pay off that student loan debt and by reviewing some of these articles already I know its possible. I mean a 56k student debt seems like nothing to you veterans lol. I have to just stop doing all of those convenient things and start doing the harder stuff at no cost to me.

Can you go into detail on how you attacked your student loans?

I only make 44k a year and with have to pay those school fees out of pocket its hard for me to make those $800 payments to aggressively attack my loan debt.

[DreamNGO]

I did the whole work/MBA thing and while it can be mentally taxing, there are semester breaks that are prime opportunity to make some extra money to throw at the high interest student loans. 

During the holiday break, get a part-time job.  It can literally be anywhere within walking/biking distance.  Work nights/weekends.  See if you can score $1000-1500.  If it isn't stressful, look at carrying it over for the weekends during winter.  Ditto for summer nights/weekends.

You need to find a way to generate extra money that goes directly to your student debt. 

 

Great advice!!! I have been contemplating picking up a night job at Walmart but it's sounds like a better idea to get a holiday job during the break to pay off my high interest loan.

[galliver]

Can you change your housing situation? Find a (cheaper) studio, or get a 2BR and a roommate?

I second biking/walking at least some of the time. Alternately, is there a bus or a neighbor you can carpool with? Do you need the car for anything else? If you can get rid of it, you can also cut the insurance payment (even if you want to save the proceeds to buy a car in the future if necessary).

I think as a young & single person it's harder to cut the entertainment/going out budget entirely (and it can be intimidating to even consider). I think you should try to halve it. Replace one outing with a house party. Have just one drink and/or a cheaper drink next time you go out (not sure what your habits are).

I admire your grocery spending, btw :) I don't think you have a lot to cut there.