Author Topic: Why can't I save more money?  (Read 6377 times)

kmb501

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Why can't I save more money?
« on: January 02, 2016, 09:23:03 AM »
Well, I'm interested in trying to live the mustachian life style and save for early retirement (or try to get some side projects going and pursue my dreams of becomming a reality TV star), but I'm having trouble saving money. I posted here before, but it's very old, so I guess I will post my dillemma again.


I make a pretty decent salary of about 30K per year, around 2.5K per month. Out of this 2.5K, my expenses are estimated as follows:

Rent $500
Phone and Internet: $70 ($35 for phone and $35 for internet)
Car insurance: $80
Car repairs: $50 (it's a rebuilt vehicle, so it's in far from perfect condition)
Gas: $100
Miscellaneous: $200
Food: $40

Total Remaining: $1460 (I never see this amount, though. I must be spending more somewhere else than my budget describes.)
What can I do to (A) cut my expenses, (B) find out why I have less left over each month than my budget describes, (C) start generating additional income? 

Here are some of my ideas:

Transportation:
Start taking the bus. That's $40 per month on a bus pass vs. $250 per month. I could come out quite a bit cheaper. I would still have to pay car insurance if I planned to drive at all, though, and since my second job requires I have a car to get home, I would still have to drive, but if I were frugal with it, it would mean that I would be driving about half as much. I would opt to just ride a bike, but it's dangerous on busy roads. Around here, they don't look out for cyclers. Plus, my initial investment would be about $250 for a good bicycle, so I wouldn't be coming out ahead at first. Here is my total estimated cost of taking the bus to work and keeping the car for my second job and days and times the bus is not running--$170 ($80 for car insurance, $40 for the bus ticket, $50 for gas) I wish I could ride a bike on these busy roads, but it must be very dangerous. I see very few cyclers around here, and they usually ride on a very narrow bike path on the side of the road; it looks dangerous.

Housing:
I could possibly move somewhere cheaper, but this place is rather convenient; two bus stops are very close, and I don't have to worry about cable or utilities. My other option would be to get a roommate. I've tried it before. I really need to develop better habits so that my roommates want to stay. My last one thought I was too messy. Then, there's the issue of not having compatible personalities and making each other miserable. Plus, the people I've had have been mostly college students, a little young, bossy, and immature.

Internet and phone:
I really don't need these. I live close enough to Wi-Fi hotspots that I could probably cancel the internet or cell phone without really hurting myself. I may need the phone for emergenies, though, and I may need the internet just for convenience or rare occassions when it would be inconvenient to use public Wi-Fi. 

Miscellaneous Expenses:
I sometimes need to pay co-pays to see the doctor; unexpected expenses come up that I didn't plan for.  Co-workers or friends buy me lunch or do small favors for me that I need to repay. I may find a book series that I want for my classroom.






« Last Edit: January 02, 2016, 09:28:28 AM by kmb501 »

kmb501

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Re: Why can't I save more money?
« Reply #1 on: January 02, 2016, 09:38:52 AM »
]You need to track your spending if $1460/month is slipping away with you having no idea what you are spending it on.

I agree. I plan to start actually writing down and calculating my expenses, not just relying on the bank to do it. I think it's probably leaking out in the miscellaneous budget. Sometimes, I have more expenses than I planned for, and I know that things like lunch with coworkers isn't a necessary expense, nor are additional classroom supplies, but I think they are justifiably something that will help me with my job.

Plus, $2,500 per month is just a rough estimate. I recently got a promotion, and that calculation is from my new salary. Before, I wasn't making that much. I was making about $700 less.
« Last Edit: January 02, 2016, 09:45:30 AM by kmb501 »

kfire20

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Re: Why can't I save more money?
« Reply #2 on: January 02, 2016, 09:40:20 AM »
The $2500.00 is that gross or net per month? I'd suggest keep track of every nickel starting this month but start with your after tax amount. Your food costs seem low, itemize them and be specific about what your misc. costs are. Do you go for take out or Tim's during the week? Those costs add up.

kmb501

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Re: Why can't I save more money?
« Reply #3 on: January 02, 2016, 09:48:42 AM »
The $2500.00 is that gross or net per month? I'd suggest keep track of every nickel starting this month but start with your after tax amount. Your food costs seem low, itemize them and be specific about what your misc. costs are. Do you go for take out or Tim's during the week? Those costs add up.

It's net, and I do eat out quite frequently, so that, plus the fact that I've only recently started making this much, may account for some of my budget failure. I've also taken on miscellanous expenses that I thought would help with my new job, like getting my hair done and buying new clothes. Then, there were my unexpected expenses; I had to get all four tires on my car replaced before Christmas, so that went over my allotted $50 per month on car repairs. (I'm also ashamed to admit it, but I also had to pay a fine for running a traffic light. I've since tried to be more careful.)
« Last Edit: January 02, 2016, 09:57:32 AM by kmb501 »

Fire2025

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Re: Why can't I save more money?
« Reply #4 on: January 02, 2016, 09:55:58 AM »
Total Remaining: $1460 (I never see this amount, though. I must be spending more somewhere else than my budget describes.)

This is your starting point.  If you start anywhere else you're just being penny wise and 1460pounds foolish.

You are looking to save $50ish by taking the bus, when you are somehow hemorrhaging $1465 every month in an unknown way.

If you online bank, look at your statements, write every purchase you've made over the last 3 month down, and find out where that $1460 went. 

Then create a budget that reflects your priorities and track where you spend, where you slip up and where you can tighten the old belt.  Rinse and repeat.

This is just my opinion, but you asked soooooo........


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Re: Why can't I save more money?
« Reply #5 on: January 02, 2016, 09:56:26 AM »
Considering you say you eat out quite a bit and your food budget is $40 I think you found your answer.

kmb501

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Re: Why can't I save more money?
« Reply #6 on: January 02, 2016, 10:10:46 AM »
Considering you say you eat out quite a bit and your food budget is $40 I think you found your answer.

I think it does have something to do with it. According to past bank statements, that and other activities that I didn't budget for could account for up to $600 in "lost" money per month. That's shameful. I know. I get it. It's the little things I do that I'm not allotting for, like $5 sandwiches in the cafeteria when I forget my lunch, buying TV dinners out so that I don't have to cook, eating out after work because I'm too tired. Buying clothes, doing my hair, re-doing my apartment to accomodate a roommate, inadvertently going on a shoppiing spree with friends, etc. There is obviously a huge hole in my budget that I need to plug. Should I do this by creating more categories or saying "no" to activities with friends? Should I get more strict about my routines and start turning things down when I feel like I'm going to go over my budget?
« Last Edit: January 02, 2016, 10:15:38 AM by kmb501 »

okits

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Re: Why can't I save more money?
« Reply #7 on: January 02, 2016, 10:26:44 AM »
Before you do anything else, write down every purchase you make.  The expenses you posted are only guesses and don't include specific lines for entertainment, grooming, clothing, dining out, health co-pays, home cleaning/maintenance, splurging/shopping sprees.  $40 in food sounds like a weekly figure, not a monthly total.

Know where every cent is going so you can truthfully see what your spending behaviours are.  Without accurate data you can't hope to be really effective at addressing and optimizing your spending.

v8rx7guy

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Re: Why can't I save more money?
« Reply #8 on: January 02, 2016, 10:32:10 AM »
Its all about tracking yur expenses and making a budget which reflects the savings your are aiming for. Sounds simple, because it is... its the putting you wishes into actions and sticking t it thats hard.

thingamabobs

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Re: Why can't I save more money?
« Reply #9 on: January 02, 2016, 10:40:25 AM »
Considering you say you eat out quite a bit and your food budget is $40 I think you found your answer.

I think it does have something to do with it. According to past bank statements, that and other activities that I didn't budget for could account for up to $600 in "lost" money per month. That's shameful. I know. I get it. It's the little things I do that I'm not allotting for, like $5 sandwiches in the cafeteria when I forget my lunch, buying TV dinners out so that I don't have to cook, eating out after work because I'm too tired. Buying clothes, doing my hair, re-doing my apartment to accomodate a roommate, inadvertently going on a shoppiing spree with friends, etc. There is obviously a huge hole in my budget that I need to plug. Should I do this by creating more categories or saying "no" to activities with friends? Should I get more strict about my routines and start turning things down when I feel like I'm going to go over my budget?

Well, first off  you don't have a budget right now. You think you do, but just spend money however you like.

I rarely recommend it, but the envelope system would probably be best for you. Once you've gotten a list of all your necessary expenses, set aside the appropriate amount. You list $200 as a miscellaneous category, well then that's where your lunches out with co-workers, clothes, inadvertent shopping sprees come from. Once that's gone, you're done for the month. No credit card, no debit card.

CindyBS

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Re: Why can't I save more money?
« Reply #10 on: January 02, 2016, 10:51:28 AM »
I agree with everything said - track your expenses for 2 months or so and then you will really see what you spend.  Going out for dinner after work probably costs way more than you are even realizing.  A easy way to solve that is to have a couple "go to" meals that take less than 5 min to prepare.

Things like:  Make a big pot/portion of something and then divide it up into individual portions and freeze - like a pot of chili, slice of lasagna, roast chicken, stew or soup, etc.  Then whip one of those out and microwave instead of going out.

Also quick meals include things like scrambled eggs with carrot sticks, hummus and a pita, grilled cheese sandwich and an apple. 

lbmustache

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Re: Why can't I save more money?
« Reply #11 on: January 02, 2016, 10:51:37 AM »
Considering you say you eat out quite a bit and your food budget is $40 I think you found your answer.

I think it does have something to do with it. According to past bank statements, that and other activities that I didn't budget for could account for up to $600 in "lost" money per month. That's shameful. I know. I get it. It's the little things I do that I'm not allotting for, like $5 sandwiches in the cafeteria when I forget my lunch, buying TV dinners out so that I don't have to cook, eating out after work because I'm too tired. Buying clothes, doing my hair, re-doing my apartment to accomodate a roommate, inadvertently going on a shoppiing spree with friends, etc. There is obviously a huge hole in my budget that I need to plug. Should I do this by creating more categories or saying "no" to activities with friends? Should I get more strict about my routines and start turning things down when I feel like I'm going to go over my budget?

This is where your extra money is going. $1400 can go very quickly when you are doing stuff like this. $5 x 3 lunches = $15. $8 x 3 tv dinners = $24, Eating out $12 x 2 lazy nights = $24, $20 t-shirt purchase and $15 of random beauty products during a Target run... you're now at $100. Times this by 4 weeks... and you're now at $400.

I've been there and have also where my money went. The #s I've given you are pretty conservative, and then add in a shopping spree ($200-$300?), new apartment stuff (another $200-$300?), salon visits, mani/pedis, activities or nights out with friends, and you're pretty much at $1400 blown.

You need to stop the leaks. Track every. single. purchase.

"Can't" is a deceptive word, it implies that you have absolutely no control of what is happening. You do, and can't is usually translated to "don't know how," or "don't want to." Your title is really, "I don't know how to save more money," or "I don't want to save more money."

Fishindude

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Re: Why can't I save more money?
« Reply #12 on: January 02, 2016, 10:55:11 AM »
Try working with cash instead of the debit or credit card for all of your miscellaneous expenses.   You will be able to physically watch the cash disappear, and when it's gone you're done spending.

kmb501

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Re: Why can't I save more money?
« Reply #13 on: January 02, 2016, 11:16:00 AM »
Try working with cash instead of the debit or credit card for all of your miscellaneous expenses.   You will be able to physically watch the cash disappear, and when it's gone you're done spending.

Cash is good, but there have been times in the past where I've used cash and misplaced my items, and when my wallet or purse was turned in, guess what? The cash was gone, too. I justify carrying a debit card around by telling myself that cash is too easy to lose, but my current system just isn't working for me. I even have two separate accounts, one for saving and another for spending, but my bank makes it super easy to transfer money from my saving to spending account online, so I'm guessing it's sort of useless to have two accounts if I can reach in and take from the saving account whenever I want. It's not an actual savings account, because I wasn't sure I would be able to keep my hands out of it long enough, so there are no penalties for withdrawals. Maybe I need to open up an actual savings account that will penalize me for withdrawals, but what if emergencies come up?

meandmyfamily

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Re: Why can't I save more money?
« Reply #14 on: January 02, 2016, 11:24:14 AM »
Get YNAB and track everything.  Nothing is spent without recording and you will know exactly where it all goes!  http://www.youneedabudget.com/

Mint is free but I prefer YNAB:  https://www.mint.com/


pbkmaine

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Re: Why can't I save more money?
« Reply #15 on: January 02, 2016, 11:32:34 AM »
Book recommendation:  Your Money or Your Life by Vicki Robin and Joe Dominguez. It is the best book on spending ever written.

Eating out and coworkers: I promise you that at least some of your coworkers are trying to save money too. Why not start an "eating in" club? Or an "eat lunch quick and then go for a walk" club? Or an "eat lunch in and discuss a book" club?

kmb501

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Re: Why can't I save more money?
« Reply #16 on: January 02, 2016, 12:20:38 PM »
Get YNAB and track everything.  Nothing is spent without recording and you will know exactly where it all goes!  http://www.youneedabudget.com/

Mint is free but I prefer YNAB:  https://www.mint.com/

Okay, I've signed up for the budgeting app, and I think I miiscalculated a few things in my original post. It looks like I have about $500 per month unaccounted for, not $1400. I didn't add categories like eating out, shopping, and emergencies in my first estimate. Oh, and 2.5K is gross, not net. Net is about 1800-2100 per month.

Jim2001

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Re: Why can't I save more money?
« Reply #17 on: January 02, 2016, 01:08:09 PM »
When you pose "why can't I...?" questions, your brain fills in the blank assuming whatever "it" is, it can't be done and here's the reason.  So, change the questions you ask yourself to something like "How can I save more money every month?"  Or even more specifically, "How can I save $xxx dollars every month?" Then couple that with the wildly important goal you must achieve.  Literally take the time to write down the reasons why you must do this.  Focus on whatever it is and it must resonate for you.  If you need six months of expenses so you can pursue the reality show, retirement, returning to school to increase your abilities in the job market, or all of the above, write it down.  (For me, years ago, it was a stable home and food on the table for my children, now it's early retirement enjoying my current, comfortable lifestyle.)

When you have an important enough "why" and remind yourself of that every day, it will be easy to pay yourself first and not touch that stash. 

When the urge to spend on less important "I want this right now" items, you can ask if the immediate satisfaction more important than your wildly important goals.  Sometimes the answer will be "yes, an evening with my friends tonight is more important than that TV show."  Sometimes it won't be, but at least it will be conscience decision.

v8rx7guy

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Re: Why can't I save more money?
« Reply #18 on: January 02, 2016, 01:08:57 PM »
Get YNAB and track everything.  Nothing is spent without recording and you will know exactly where it all goes!  http://www.youneedabudget.com/

Mint is free but I prefer YNAB:  https://www.mint.com/



Okay, I've signed up for the budgeting app, and I think I miiscalculated a few things in my original post. It looks like I have about $500 per month unaccounted for, not $1400. I didn't add categories like eating out, shopping, and emergencies in my first estimate. Oh, and 2.5K is gross, not net. Net is about 1800-2100 per month.

That is a good start by downloading and starting a budget. The net vs. Gross is a common mistake... easy to "hear" what you make, but not pay attention to what is actually  being deposited.  That $500/mo would be a great savings rate to shoot for right off the bat... but you need to keep track of a whole month or two and start adjusting your budget accordingly. Post up your new budget for us to see! Also post what your paycheck deductions are... 401k, taxes, medical insurance, etc.

MacGyverIt

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Re: Why can't I save more money?
« Reply #19 on: January 02, 2016, 01:15:41 PM »
You mentioned car expenses for the rebuilt engine and insurance but the car is required to get to your second job. Wondering if this is similar to the "is it cost effective to work when paying for day care" question?

If the job is part time and low paying, it could make better financial sense to get rid of the car and all expenses associated with it by quitting the second gig and if need be, finding another second gig that is on your existing two bus line options.

kmb501

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Re: Why can't I save more money?
« Reply #20 on: January 02, 2016, 02:39:18 PM »
You mentioned car expenses for the rebuilt engine and insurance but the car is required to get to your second job. Wondering if this is similar to the "is it cost effective to work when paying for day care" question?

If the job is part time and low paying, it could make better financial sense to get rid of the car and all expenses associated with it by quitting the second gig and if need be, finding another second gig that is on your existing two bus line options.

Well, the second job is two days per week and pays about $300 per month, and my car-related expenses total about $250 right now. Really, it more or less just pays for my car-related expenses, but it also provides good references and a wealth of knowledge about education, culture, and the world. Plus, it's a gig teaching English to refugees, so it's a good reference for other ESL jobs. Plus, if I did have enough nerve, I could walk or ride a bike to my job. I just got fussed at so badly by the head teacher that I thought it would make a bad impression not to have a car. She talked about it like it was an absolute necessity. Plus, being completely carless would be an inconvenience. I would still like to get to church on Sunday when the buses aren't running and maybe even go off the beaten path and explore new territory at times. Also, it's easy to store stuff, like lesson plans and textbooks, in a car.
« Last Edit: January 02, 2016, 02:49:54 PM by kmb501 »

okits

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Re: Why can't I save more money?
« Reply #21 on: January 02, 2016, 05:36:57 PM »
kmb501, I read through your post history and have a more complete picture of your professional and education background, challenges you are tackling, and your situation a year ago.

First, a HUGE CONGRATULATIONS on tripling your annual income.  Is this a full-time job?  Contract/permanent?  Benefits, pension?  Did you move to get it?  What kind of teaching is it?

Getting the job means you made some progress on your challenges related to ASD and introversion, or at least persisted through them.  In either case, good for you.  <thumbs up>

Last January you had $100k in student loan debt.  Is this still the case?  With more details about the debt (private/gov, interest rates) and your job hopefully the other Americans in the forums who know about this stuff can advise you on repayment or loan forgiveness.  This is an extremely important facet of your financial life, so I would give it serious attention.

As far as being a reality TV star, I would look for ways to pursue this interest at the same time as you are building your teaching career.  It sounds fun and interesting, but entertainment is a tough business and before taking focus off your paying career you will want to do a thorough and objective assessment of whether you have the attributes necessary to make a living wage doing this.

It's really great to see your updated situation and what you've achieved so far.  Keep striving to improve, and if you take some of the advice given here really to heart I think you'll continue to make strides.