Challenge! can you help me cut costs on my shoestring budget??

[bucs556]

Hi fellow Mustachians,

I am hoping to get some opinions on how I can cut costs and start to grow my pitiful stash! I am turning both cheeks, please do not hold back on punches to the face. I recently graduated from college, and am working at a low-paying job/internship that will help advance my career after a 13 month commitment. I have some student loans (19k), they are currently in deferment, and no interest is accumulating. The thought of this debt is looming in the back of my mind. Here's the details:

Income:
$1050 net

Assets:
One '98 hatchback (bought used, paid cash).
<1k savings

Expenses:

Rent - $400
Utilities - $80 - varies, this is a high estimate. I split cable, water, gas, etc. with 4 other roommates.

Food - $150
Dining out - $0
Alcohol/bars - $20

Car insurance - $40
Gas - $60
Misc. car expenses - $60

Clothes - $10
Gifts, pharmacy, etc - $30

Total expenses: $850

I ride my bike to work almost every day (gotta love studded snow tires), and try to be as frugal as possible in any way I can. The problem is that I have almost no savings, and am living pretty much paycheck to paycheck. Any suggestions for how to cut my costs, or how to stop panicking about the fact that I'm saving less than $200 a month?
Thanks!

[Erica/NWEdible]

Ok, I'll say it. You don't have a spending problem. You have an income problem. I'd just focus on maximizing your earning potential. If your barely-paid internship is the way to do this long-term, then that's just the career development stage where you're at right now. Focus on the fact that you have a plan for a lot MORE savings in 2 or 3 years. In the meantime, perhaps a second part-time job? I notice the line in there for bars - can you bartend?

[NumberJohnny5]

Assets:
One '98 hatchback (bought used, paid cash).
<1k savings

You need a bigger emergency fund. Something is better than nothing, true, but I'd want a bit more than that.

Rent - $400
Utilities - $80 - varies, this is a high estimate. I split cable, water, gas, etc. with 4 other roommates.

Is $400/mo rent with four OTHER roommates the best you can find? $80/mo split five ways also seems a bit high, though I'm not sure how you can reduce that (they may not be too happy you're not paying your "fair share" if you decide to stop watching cable and refuse to pay "your" portion).

Food - $150
Dining out - $0
Alcohol/bars - $20

More room for improvement. I'm not sure about food costs, but I'd expect you could get the food down to $100/mo (our family of four spends about $100/wk, and personally I think we're still a bit wasteful). Alcohol is also not a need; if this is just to socialize, find cheaper ways? Yeah, $20/mo may not be much, but it's the $50 plus $20 plus $100 plus $10 plus...that can really make a difference.

Car insurance - $40
Gas - $60
Misc. car expenses - $60

Insurance seems reasonable, though that's no reason to not occasionally shop around (I'd at least have a cursory glance at other policies each time you have to renew). Gas...I dunno, just don't drive it unless necessary? Sounds like you're already trying to do that. $60 for misc car expenses, are we talking saving for the inevitable maintenance/repairs? If so, that sounds pretty reasonable, though I'd want you to have a decent emergency fund in case it needed a new transmission or something else that could catch you off-guard.

Clothes - $10
Gifts, pharmacy, etc - $30

Buy all your clothes at thrift stores, and don't buy anything unless it's necessary. Yes, $10/mo sounds good, but if you purchase on dollar days (or whatever the equivalent is), that's ten shirts/pants/coats/etc.

Explain the pharmacy...i.e. why is it grouped with gifts? Do you buy tylenol (or rather, generic acetaminophen) for Christmas presents? Medicine you actually need = ok, but you could drop the gift spending to $0 if you desired.

or how to stop panicking about the fact that I'm saving less than $200 a month?

If you were putting a full $200/mo into savings each month, it'd take just over four months to save up a month's worth of expenses. That's not too terrible. If you cut out alcohol ($20/mo), reduce food by $50/mo, cut out gifts (I'm assuming gifts was $15 of your $30), and drop the clothes to $5/mo, that's another $90/mo right there. In 8.5 months, you'll have an extra month's worth of expenses saved up just in savings alone (remember, $90/mo in savings is also $90/mo in reduced expenses; your monthly expenses would now be $760/mo).

[girly mustache]

Could you sell the car and bike and public transport it the rest of the time? maybe pay your roomies for the occasional trip to the grocery or something?

[AtlantaBob]

Ok, I'll say it. You don't have a spending problem. You have an income problem.

Agreed. Can you give us a little more information about what you're doing and your background? As much as MMM focuses on limiting spending, I think that you've got to get the income figure up.

[bucs556]

Ok, I'll say it. You don't have a spending problem. You have an income problem.

Agreed. Can you give us a little more information about what you're doing and your background? As much as MMM focuses on limiting spending, I think that you've got to get the income figure up.

I am working for a national service organization, and at the end of the year will be getting $5000 to put towards my student loans. If I leave before I complete my assigned term, I get zilch.
Getting a second job is definitely a possibility, maybe a restaurant job where I could eat for free :) Thanks for the suggestion! I've been thinking about it, but haven't been motivated to actually get out there and get another job.

As for selling the car, it is really important to me to be somewhat mobile, my girlfriend lives in another city for the time-being and the public transportation is inconvenient and expensive.

Re grouping pharmacy and gifts, that's kind of my miscellaneous category (most recent purchase there was pencils for work) and since I rarely buy little things like that I just lump it together on mint.

Thanks for all the suggestions, I really appreciate your help! I have been lurking here for quite a while and

[Karl]

If you want a job that often provides free, relatively high quality, meals, you might also look at conference hotels.  I worked, in my younger days, at a Hyatt.  I assure you, we ate *well.*  When on duty, all meals came free.  We had to accept the options the kitchen staff provided, but having an excellent chef preparing our food usually meant that we ate better than the hotel/conference guests.

[unplugged]

Karl, I shared this in another post. I worked the same type job years ago before I got married. Chefs made our food and we also received all the food left over from catered banquets. We received one nice free meal a day. But the large room also had a kitchenette in the back that served hot chocolate and soda all day free. They also kept a loaf of fresh bread and a jar of peanut butter at all times. I had an almost zero food budget during that time. I think the young pre-family days a real good time to build some savings. Amy D talks about that in the Tightwad Gazzette book.

[Togoshiman]

Agree with Happy.  You're incredibly frugal already.  There is little to cut based on your stated needs, e.g. gf in another city.

I would query whether each hour spent attempting to cut further is worth it as opposed to investing in another hour of advancing in your primary income-producing method: job.  Personally, I would be quite pleased my debt was so low and my lifestyle so frugal.  I would put it to bed and focus on figuring out who was very successful in my field and them emulating them.  I would look for the paths in my field that had the greatest chances for success, highest incomes and best overall prospects.  I would ensure that I was top of the heap and the overwhelming obvious choice for those paths by the folks with the power to make decisions over my career.  I would do everything to stack the deck so that I was a high flyer.  A few years from now when your earnings have skyrocketed, if you can keep your very frugral lifestyle, you will be very far ahead in terms of MMM, FI, etc.

I also think for your situation, part-time jobs and such are not worth your time.  I see this with college kids all the time - you work nights waiting tables to get a bit of cash and your GPA drops, meaning you don't get a decent job upon graduation.  Tallying up all the part-time earnings throughout college, you would have been much better to get to the top of your class and get those best jobs which pay better (setting aside perhaps the social aspect, true need to survive, etc.)

TL;DR: work like hell at your primary vocation until you are successful, keep your lifestyle and frugality the same as now as you advance, forget trying to cut the last 1% of fat from your life.

[etselec]

I'm guessing you're in AmeriCorps. If so, realize that you may not be allowed to get a second job - in the branch of AmeriCorps that I did, we weren't allowed to take any outside employment. While it's possible to try to do it on the sly, some people do get caught and it can jeopardize your education award and your good standing with the program.

If I were you, I'd focus on networking to make sure you get a job after AmeriCorps. (Also, just FYI, you are almost certainly eligible for food stamps, so that is another option, depending on your feelings about government assistance programs.)

[dizzean]

My wife did 2 years of AmeriCorps, other than the organization you work for essentially getting a full time employee for what is closer to slave labour than an actual income.

You most certainly qualify for Food Stamps, none of the income from that job is able to be counted towards your qualification for Food Stamps.  We lived in WI and PA and qualified in each state.

Also, they might not have mentioned this to you but WHEN you spend your 5k education award you will get a 1098 MISC form because it is considered non taxed income and you will have to pay taxes on it.