Making under 30k, saving zero.

[anonymouscow]

Hello, I come from another thread, people are telling me I can save 18.5K in a 401K while making under 30K a year.

I make $29,640 a year.

After taxes and health insurance, my take home pay is $1,941 a month.

I am a co-borrower with my SO for a home mortgage, she pays the bulk of it.
I pay the water bill, my car insurance, and the yearly HOA fee.

I have tracked all my spending this year.

Spending - 8 months this year - Total and Monthly

$4,248.89 / 8 = $531.11 (My share of the mortgage)
$395.57 / 8 = $49.45 (Water bill)
$154.04 / 12 = $12.84 (Yearly HOA bill)
$56.01 / 12 = $4.67 (Car Registration)
$245.39 / 6 = $41.33 (Car insurance)
$1,365.83 / 8 = $170.74 (Gas for cars)
$3028.30 / 8 = $378.54 (Car maintenance and repairs)
$240.86 / 8 = $30.11 (Home repairs)
$67.59 / 8 = $8.45 (Pet food and supplies)
$710.15 / 8 = $88.76 (Food)
$626.70 / 8 = $78.34 (Misc / other)
$4,400 / 8 = $550 (Purchased used vehicle)

Total Spending $15,539.33 / 8 = $1,942.42
Total Income $15,528.00 / 8 = $1,941.00

-I still need to pay $2,500 in medical bills.

-This is just my spending, the SO does not track hers.

-The $4,400 for a used vehicle shouldn't happen every year.

-The car repairs shouldn't be that high ever year, the $3028.30 includes things like battery, tires, oil changes etc though.

- I fill up gas cans when I have fuel points at Kroger, the gas goes toward multiple cars in the household.

If you exclude car repairs, the vehicle, and medical bills, I could have saved about $7,000 this year, plus any tax savings.

I could try and pay a smaller portion of the mortgage, otherwise the only way to lower it would be to move.

Most of the items I am not sure how to lower, I shop around for the lowest price, buy used when I can, do whatever car / home repairs I am capable of.

The misc section is things like a $23.00 phone battery, $30.00 shoes, $36.84 gifts, $5.00 parking fee, $225.25 unavoidable expenses, $52.00 entertainment, so around $100.00 was not for a purpose spending.

I don't see how I could ever come close to saving 18.5k a year in a 401k, even if I cut out food, repairs, and misc, my expenses would be too high.

[Much Fishing to Do]

Well, given your spending=income, and everything else seems to be well in control, I'd say the point of focus on the expense end begins and ends with the car. Looks like everything that says 'car' somewhere in the expense adds up to over $1100/month.

Of course that's only $13k/year, so I agree 18.5k would be tough and you should maybe shoot for $13k (maybe start targeting half that this year) until you can increase your income a little bit.

Subtract out the car expenses and you are doing quite awesome.

[reeshau]

It seems you have already come to some conclusions.  I hope you come here sincerely looking to get a fresh perspective on your situation.  With that said:

Why are taxes + insurance 48% of your income?  Do you work in Western Europe?  Do you get a big tax refund check each year?  I think you could do a lot on your top line.  Adjust your withholding so that you get nothing and the IRS gets nothing each April.  Don't give the government an interest-free loan.  You sound fairly young:  are you over-insured?  Stay healthy, and protect yourself from catastrophic events.

That said, are you content with your job and your life, other than the saving part?  Saving 18,500 while making 30 would be around a 60% savings rate.  Are you striving for FIRE in 5 years or less?  If not, then set a more realistic goal for yourself.  First, get your 401k match.  Then, work your way up to 15% of income saved.  Those things will get you retired "on time." (I.e. 65-70)

Not enough?  Then the obvious answer, probably moat people's first answer, is go make more.  Work overtime.  Get a second job.  Get some education so that you can make an above-median wage.

You are paying almost as much to repair the car, as it cost.  Sound like it might be time to get a different one.  It sounds quite a bit worse than a $5k car should be.

Your gas expense is crazy.  Do you deliver things or drive Uber for your work?  If you are thinking about a different car, think about a fuel efficient one.

Do you have any other debt?

Last thing.  Not numbers, but advice.  Be very careful owning a house with a non-spouse.  You are in a general partnership legally, and holdnliabilty for the whole thing.  I hope you are on your way to matrimony, because otherwise this could be big trouble financially.

[anonymouscow]

It seems you have already come to some conclusions.  I hope you come here sincerely looking to get a fresh perspective on your situation.  With that said:

Why are taxes + insurance 48% of your income?  Do you work in Western Europe?  Do you get a big tax refund check each year?  I think you could do a lot on your top line.  Adjust your withholding so that you get nothing and the IRS gets nothing each April.  Don't give the government an interest-free loan.  You sound fairly young:  are you over-insured?  Stay healthy, and protect yourself from catastrophic events.

That said, are you content with your job and your life, other than the saving part?  Saving 18,500 while making 30 would be around a 60% savings rate.  Are you striving for FIRE in 5 years or less?  If not, then set a more realistic goal for yourself.  First, get your 401k match.  Then, work your way up to 15% of income saved.  Those things will get you retired "on time." (I.e. 65-70)

Not enough?  Then the obvious answer, probably moat people's first answer, is go make more.  Work overtime.  Get a second job.  Get some education so that you can make an above-median wage.

You are paying almost as much to repair the car, as it cost.  Sound like it might be time to get a different one.  It sounds quite a bit worse than a $5k car should be.

Your gas expense is crazy.  Do you deliver things or drive Uber for your work?  If you are thinking about a different car, think about a fuel efficient one.

Do you have any other debt?

Last thing.  Not numbers, but advice.  Be very careful owning a house with a non-spouse.  You are in a general partnership legally, and holdnliabilty for the whole thing.  I hope you are on your way to matrimony, because otherwise this could be big trouble financially.

Sorry if my numbers were unclear, taxes and health insurance is about 21%.
Taxes are $444.11 a month for federal / state / city / SS / medicare.
Health insurance is $83.83.

[YoungGranny]

I would say your vehicle expenses and gas are way, way too high. Purchasing a car for $4.4k would be fine but why did it needs $3k of maintenance and repairs? That seems really expensive. Plus $170 in gas each month.....at 35mpg and assuming $3 a gallon you're driving almost 2k miles a month which seems insane. If you live that far away from work then your commuting costs are whats killing you. If you can ditch the car and bike you'll notice a huge cost savings. So all that is $2040 (170*12) + 4400 + 3000 = 9440. About half of what you're looking for. Keep in mind that if you start saving more for retirement your tax liability will likely decrease too so the 20% that's currently being withheld might go down.

But truly the people who can save $18k on a $30k salary are typically really good at reducing their expenses to a crazy low amount. Which would mean no car expenses, and find a creative living solution so it's very cheap or free. Some people will buy a duplex and live in half, or rent out bedrooms etc. If you eliminated your share of the mortgage plus all vehicle expenses you'd come up with over $20k a year so then the question is can you find a creative solution to reduce those expenses to $125 a month. One example would be biking to work, selling the car and subletting a room for $400 a month to bring down your share of the mortgage.

[former player]

I agree with Much Fishing that you are doing well on tracking and controlling your spending.  The query I have is: why are there multiple cars in the household and why are you paying the gas for them?  If the household income per head is similar to yours then multiple cars are unaffordable, as is so much mileage on them.  Added mileage also adds to repair costs, of course, so reducing mileage should reduce maintenance costs too.

Where are you on the medical bills?  My understanding is that you should be able to get an agreement to pay a small amount monthly without interest being charged.

Your budget as laid out means that you have $550 a month, now that the car is paid for, which is unallocated.  That needs to be split between an emergency fund, medical bill payments and savings.  The more you can cut down the gas payments the more you have to allocate to those needs.

I agree that $18k annually to retirement funds isn't feasible on a take home of less than $23k a year.   (Some people held up as living on small annual expenditures do so with the benefit of paid-off or otherwise free housing, including Mr MM himself, which skews their figures downwards compared to your situation.)

[onlykelsey]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

[reeshau]

Sorry if my numbers were unclear, taxes and health insurance is about 21%.
Taxes are $444.11 a month for federal / state / city / SS / medicare.
Health insurance is $83.83.

My mistake.  I lost focus of your 8 month numbers, vs. annualized income.

[anonymouscow]

I would say your vehicle expenses and gas are way, way too high. Purchasing a car for $4.4k would be fine but why did it needs $3k of maintenance and repairs? That seems really expensive. Plus $170 in gas each month.....at 35mpg and assuming $3 a gallon you're driving almost 2k miles a month which seems insane. If you live that far away from work then your commuting costs are whats killing you. If you can ditch the car and bike you'll notice a huge cost savings. So all that is $2040 (170*12) + 4400 + 3000 = 9440. About half of what you're looking for. Keep in mind that if you start saving more for retirement your tax liability will likely decrease too so the 20% that's currently being withheld might go down.

But truly the people who can save $18k on a $30k salary are typically really good at reducing their expenses to a crazy low amount. Which would mean no car expenses, and find a creative living solution so it's very cheap or free. Some people will buy a duplex and live in half, or rent out bedrooms etc. If you eliminated your share of the mortgage plus all vehicle expenses you'd come up with over $20k a year so then the question is can you find a creative solution to reduce those expenses to $125 a month. One example would be biking to work, selling the car and subletting a room for $400 a month to bring down your share of the mortgage.

I have a van and a car, the van needed the transmission replaced, that cost $1,450, the one they put in was bad and it was $400 more to replace again. The car needed a battery, tires, the ignition lock repaired, and a new key. Throw in an oil change, transmission fluid change, and repairs I tried to do on the van myself. I would hate to sell something I just had repaired.

It's 23.2 miles to my work.

Not all the gas is for me, I fill up 4 extra 5 gallon cans to use Kroger fuel points, those then go into my SO's vehicle.

I'm trying to keep things simple, but I have a side job on the weekend (28.2 miles away), it's not profitable yet.

I have another side job that I need a van for (vending machines), I have not made my money back on the original investment so I am not counting that as income, that is what I need a van for. It doesn't add many miles because it's on my route to and from work.

Sorry for not giving all the information, some of the miles will be a business deduction.

I have no free time and no energy with the two side jobs that I'm hoping will be profitable sometime soon.

[anonymouscow]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

People suggested I post a case study, I said it was laughable that I would be able to save 18.5k in a 401 , I said even if I went down to barebones expenses and spent nothing on food that it's still not happening. I'm seeing what people think about that mostly.

[Lews Therin]

I'm trying to keep things simple, but I have a side job on the weekend (28.2 miles away), it's not profitable yet.

that seems like a point that hemorraging money.... 56 miles rounds trip, no profit... requires car, gas, adding mileage to the vehicle...

[anonymouscow]

I agree with Much Fishing that you are doing well on tracking and controlling your spending.  The query I have is: why are there multiple cars in the household and why are you paying the gas for them?  If the household income per head is similar to yours then multiple cars are unaffordable, as is so much mileage on them.  Added mileage also adds to repair costs, of course, so reducing mileage should reduce maintenance costs too.

Where are you on the medical bills?  My understanding is that you should be able to get an agreement to pay a small amount monthly without interest being charged.

Your budget as laid out means that you have $550 a month, now that the car is paid for, which is unallocated.  That needs to be split between an emergency fund, medical bill payments and savings.  The more you can cut down the gas payments the more you have to allocate to those needs.

I agree that $18k annually to retirement funds isn't feasible on a take home of less than $23k a year.   (Some people held up as living on small annual expenditures do so with the benefit of paid-off or otherwise free housing, including Mr MM himself, which skews their figures downwards compared to your situation.)

My SO is a home health nurse, sometimes she drives 200 miles in a day. I use the Kroger fuel points to get a discount on gas. I fill her tank as a way of helping with the expenses since she pays more bills than I do.

I'm still working on the medical bills, I only just received all the paper bills last week. I am waiting to hear back from my insurance company and then I will see about applying for help or seeing about making payments.

[anonymouscow]

I'm trying to keep things simple, but I have a side job on the weekend (28.2 miles away), it's not profitable yet.

that seems like a point that hemorraging money.... 56 miles rounds trip, no profit... requires car, gas, adding mileage to the vehicle...

Yep, it was probably a stupid idea. I've only just opened the business, so it might take a while to see if I can get more customers and make it profitable. I slept on the floor last weekend so I didn't have to make the trip home.

[onlykelsey]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

People suggested I post a case study, I said it was laughable that I would be able to save 18.5k in a 401 , I said even if I went down to barebones expenses and spent nothing on food that it's still not happening. I'm seeing what people think about that mostly.

On 20K I saved about 7K for retirement (this was pre me having a kid). Did not save the 18.5K a 401K would have let me.  There are definitely people earning 30K and maxing their 401K and a backdoor IRA, as well.    Do you want to hear it can or can't be done?  It obviously can.  But very few people do it, and you don't have to.

I'm not sure comparing to others is a useful way to think of things.  Thinking about alternative versions of your life is more interesting.  It's not black or white.  It's not "save nothing" or "max your 401K", or "live on 5K" or "spend more than you earn".  Maybe for you it's kill your debt, downsize your car spending, and put 10K away in a 401K next year.

[anonymouscow]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

People suggested I post a case study, I said it was laughable that I would be able to save 18.5k in a 401 , I said even if I went down to barebones expenses and spent nothing on food that it's still not happening. I'm seeing what people think about that mostly.

On 20K I saved about 7K for retirement (this was pre me having a kid). Did not save the 18.5K a 401K would have let me.  There are definitely people earning 30K and maxing their 401K and a backdoor IRA, as well.    Do you want to hear it can or can't be done?  It obviously can.  But very few people do it, and you don't have to.

I'm not sure comparing to others is a useful way to think of things.  Thinking about alternative versions of your life is more interesting.  It's not black or white.  It's not "save nothing" or "max your 401K", or "live on 5K" or "spend more than you earn".  Maybe for you it's kill your debt, downsize your car spending, and put 10K away in a 401K next year.

I absolutely believe someone can save 18.5K on a 30K income. The impression I was getting was that people are considering it to be easily achievable. I am asking if it is at all realistic for someone in my situation. Find new housing, find a new job that I can walk to that pays more, those things are not the easiest of things to do.

[onlykelsey]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

People suggested I post a case study, I said it was laughable that I would be able to save 18.5k in a 401 , I said even if I went down to barebones expenses and spent nothing on food that it's still not happening. I'm seeing what people think about that mostly.

On 20K I saved about 7K for retirement (this was pre me having a kid). Did not save the 18.5K a 401K would have let me.  There are definitely people earning 30K and maxing their 401K and a backdoor IRA, as well.    Do you want to hear it can or can't be done?  It obviously can.  But very few people do it, and you don't have to.

I'm not sure comparing to others is a useful way to think of things.  Thinking about alternative versions of your life is more interesting.  It's not black or white.  It's not "save nothing" or "max your 401K", or "live on 5K" or "spend more than you earn".  Maybe for you it's kill your debt, downsize your car spending, and put 10K away in a 401K next year.

I absolutely believe someone can save 18.5K on a 30K income. The impression I was getting was that people are considering it to be easily achievable. I am asking if it is at all realistic for someone in my situation. Find new housing, find a new job that I can walk to that pays more, those things are not the easiest of things to do.

I think you're discounting the years leading up to the year in which someone saves 18.5K of 30K.  For most people, there were years of cutting expenses back, honing their side hustles, looking at the tax implications of upping their 401K on their AGI, paying off mortgages, etc.  Not everything is an instant switch that can lower consumption. 

That said, there are a lot of switches you could press now if you wanted to save 18.5K.  Some people live in vans.  Some people sell all their vehicles and do bike + bike trailer only. Some people dumpster dive.  I'm not saying all of this is stuff you have to do, but if saving 18.5K was your primary goal, you COULD pull a lot of these switches and get there maybe next year.  It's all just tradeoffs.  I live less bare bones than I need to, which I understand will add years to my working career.  It's a trade off I'm making.  I could cut spending to the bone and retire a couple years earlier, but I choose not to. Different strokes.

Try thinking about it from the position of the guy earning 30K but living in a van, eating beans, carless, and saving 18.5K.  From his position, he might balk at the idea of buying even a cheap car, because for him it might mean going from retiring in 11 years at a 12K spending and 62% savings rate to retiring in 14 years at a 14K spending and 54% savings rate.  Add THREE YEARS of working full time in order to have a cheap car?  He might laugh at that notion.  It really is all different strokes.

[reeshau]

I'm trying to keep things simple, but I have a side job on the weekend (28.2 miles away), it's not profitable yet.

that seems like a point that hemorraging money.... 56 miles rounds trip, no profit... requires car, gas, adding mileage to the vehicle...

Yep, it was probably a stupid idea. I've only just opened the business, so it might take a while to see if I can get more customers and make it profitable. I slept on the floor last weekend so I didn't have to make the trip home.

This is a side hustle...a side business, not a job.  A job would have a paycheck, and the profitability would be immediate and clear.  While I applaud your effort to try other things, please do not fall into the investor/ entrepreneur trap of "getting back to even."  If it was a bad idea, any time spent in addition are more bad ideas.  You need to closely track revenue here, and make sure it will be quickly on a path to profitability.  It needs to net (after expenses, including the van) more than you would take home from a side job.  Or it's literally not worth your time.

[Spudd]

I would say that owning 2 cars (the van + the car) when you make 30k is what's causing you a lot of your trouble. Can you not get rid of one of them? That would get you some money immediately, plus would decrease your ongoing insurance + maintenance bills. Seems like you need the van for your vending machine side hustle but why do you need a car on top of that? I can't imagine the MPG savings of the car would outweigh the added insurance + maintenance.

Also, I think that almost nobody would be able to save 18.5k a year with a 30k income. It would require extreme measures like living with parents for free, or vandwelling. Even for a vandweller I think it could be tough!

[Davnasty]

i'm not sure what exactly you are looking for in responses. 

A few questions/thoughts:

• How long have you been making 30K?  In a year where you're not replacing your car, that frees up 4K right there.  Since you (presumably) didn't replace your car last year as well, did you save 4K last year? IF not, where'd it go?
• How old are you?  If you are okay with a normal length career, it doesn't take much in adjustments to get you saving 5K a year and retiring, frankly, in a better position than a lot of Americans.
• If you don't want to retire at 65 or 70, then you need to earn more money.  I don't know what your skills are, but earning an extra 5K year would be huge if you can keep your expenses where you are.  We're in probably the best employment market we'll see for decades, so now is definitely the time to earn more money.  I'm not sure about your age or demographic, but you are making a below-average amount of money.  You seem intelligent.  I think you can make more, if that's a priority.
• What are you driving?  That is a LOT of gas money!

People suggested I post a case study, I said it was laughable that I would be able to save 18.5k in a 401 , I said even if I went down to barebones expenses and spent nothing on food that it's still not happening. I'm seeing what people think about that mostly.

On 20K I saved about 7K for retirement (this was pre me having a kid). Did not save the 18.5K a 401K would have let me.  There are definitely people earning 30K and maxing their 401K and a backdoor IRA, as well.    Do you want to hear it can or can't be done?  It obviously can.  But very few people do it, and you don't have to.

I'm not sure comparing to others is a useful way to think of things.  Thinking about alternative versions of your life is more interesting.  It's not black or white.  It's not "save nothing" or "max your 401K", or "live on 5K" or "spend more than you earn".  Maybe for you it's kill your debt, downsize your car spending, and put 10K away in a 401K next year.

I absolutely believe someone can save 18.5K on a 30K income. The impression I was getting was that people are considering it to be easily achievable. I am asking if it is at all realistic for someone in my situation. Find new housing, find a new job that I can walk to that pays more, those things are not the easiest of things to do.

Going back to the original conversation you did say it would be laughable for you, but responses were more general that someone could. I think it would take an annual spend of about $9200 to do so, but I don't think that should be your goal or that it would be easy. The "easy" comments were in reference to higher salaries from what I can tell on a quick re-read.

So back to your situation, no it would not be easy to move closer to work or get a job closer to home, but it is possible. If you did so, then you would easily save money on your commute. Often, the big step is difficult but makes everything after that step easier.

Regarding the van you use for work, it's just a matter of accounting but if it's the cost of doing business and you're losing money I would recommend that loss comes straight out of the earnings column. You're not spending more, you're making less.

The car, you shouldn't amortize that cost over 8 months unless it's used up and worthless after that time. The best you can probably do is estimate how long it will last and amortize over that period. $4400/60months = $73.33 looks a lot more reasonable. Could last longer than 5 years, just an example.

Damn that water bill is high.

So basically, I think a lot of the disconnect is based on your one time spends being concentrated in your accounting when they should be spread out (or at least that's how I would do it) and that your goal shouldn't be saving $18,500, but just saving anything at all. How much? As much as makes sense for you.

[Goldielocks]

A few ideas:  You don't have a side hustle right now, you have a side hobby that is costing you money, and the opportunity to paid to work for the same amount of effort.   

Do you have a plan for how much your side hustle needs to make by December?  By March? etc.  How do you know when to call it quits and sell and get out?   Do you track all your expenses for it right now, including the car costs?

With lower income, you need to be careful about your side hobbies, transportation, housing costs.

It seems that you are living in a home, paying $600/mo rent, and $150/mo food (assuming that your food costs are partly paid by SO, and you pay for fuel in return).   How does $600 / mo rent compare to sharing a rental apartment in your area?   What about someplace closer to where you work?  Only you can determine if this is high or low.

If it is about right, that's the amount 4 friends splitting a home would each pay, then likely your income at $29k/yr is a bit low for the area you are living in and you could make more money, or will be soon.

Otherwise, revisit who is paying what for the household expenses, and ensure it is fair according to your income levels and what you would spend on your own, living with roomates.  Alternatively, if you are married (equivelent) you need to look at joint income / expenses over the long term.

Two cars is crazy, especially if you can have occasional access to your SO's car.  I would sell the vending machines, get rid of the van, pay of debts, look for new work (or a side job ) close to home, etc.   Most people I know with income under $30k do now own a car.

[anonymouscow]

I would say that owning 2 cars (the van + the car) when you make 30k is what's causing you a lot of your trouble. Can you not get rid of one of them? That would get you some money immediately, plus would decrease your ongoing insurance + maintenance bills. Seems like you need the van for your vending machine side hustle but why do you need a car on top of that? I can't imagine the MPG savings of the car would outweigh the added insurance + maintenance.

Also, I think that almost nobody would be able to save 18.5k a year with a 30k income. It would require extreme measures like living with parents for free, or vandwelling. Even for a vandweller I think it could be tough!

The car is in pretty poor shape, the radiator mount rusted out so the radiator is held in place by a piece of wood and some tie down straps. I wouldn't feel comfortable selling or giving it away and risk it falling apart on someone. The insurance isn't too much on it, I'm pretty much just waiting for the next major repair needed to send it to the scrap yard.

[anonymouscow]

A few ideas:  You don't have a side hustle right now, you have a side hobby that is costing you money, and the opportunity to paid to work for the same amount of effort.   

Do you have a plan for how much your side hustle needs to make by December?  By March? etc.  How do you know when to call it quits and sell and get out?   Do you track all your expenses for it right now, including the car costs?

I don't have an exact time frame. The side business is a retail store in a building I own. The building needs work done before I can try to rent or sell it. So the plan is to fix the building while the store is open, once it is fixed I will see where I am with sales.

[Goldielocks]

A few ideas:  You don't have a side hustle right now, you have a side hobby that is costing you money, and the opportunity to paid to work for the same amount of effort.   

Do you have a plan for how much your side hustle needs to make by December?  By March? etc.  How do you know when to call it quits and sell and get out?   Do you track all your expenses for it right now, including the car costs?

I don't have an exact time frame. The side business is a retail store in a building I own. The building needs work done before I can try to rent or sell it. So the plan is to fix the building while the store is open, once it is fixed I will see where I am with sales.

DH and I have both dabbled in self employment.  You are describing a choice to remain in low income for many years, with no money for long term savings because you will keep needing to throw money at something  in the business that is not paying off now, to make money in future, but you have no business plan set for when you will make money or stop the losses and get out.

What about the vending machines..? so far, you have the cost of a van and repairs, fuel, vending machines, perhaps $$ contracts for placement, and goods to fill it up.  You need to reimburse for bad sales / problems, and pay for a data line (if CC machine), or other extra costs.  What does it take for the vending machines to pay off -- are you making money (more than $15/hr for your time) after you pay yourself $0.56/mi minimum for the transportation?

Now you have a retail store that sounds like it needs $$ investment to be (maybe) financially positive... but you don't have money, so how will that work?   Does someone lease the retail store from you so you have a cash flow?  Are you making money (profit) from the retail store? 

Also, people will buy real estate, the price just needs to be low enough

[sol]

Is your SO paying half of your mortgage costs?  Where do you live that your mortgage is so high?  When I was making $30k/year, my monthly rent was $217 (before utilities) by splitting a 2.5 bedroom townhouse half with two other people (and biking to work).  The townhouse wasn't very nice, but at that salary I knew I couldn't afford much more.  Why can you?

I agree that your car expenses are ridiculous.  You spent roughly 45% of your total income on car expenses last  year?  If you could even cut that in half and devote the other half to savings, you'd be on a path towards early retirement decades ahead of the average American.  You spent over $3k on "battery, tires, and oil change"?  What kind of tires did you buy!  I can get all of that for under $1000, and 80% of it will be the tires.  The only people I know who spend 45% of their income on cars are either rich motorheads or stupid high school kids with muscle cars they think will get them laid.  I don't think you are either one of those.

Remember that the point here isn't necessarily to max your 18.5k limit on the 401k per year, the point is find the right balance of savings vs spending for you.  If you decide that spending that money is more important than early retirement, that is also a valid choice for you to make.  Change comes from within, and if you're just here to argue that it can't be done, then you're definitely not ready to make the required changes in your own life. 

But if you are set on maxing the 18.5k, I think you can get a bunch of it from your car spending, which should be averaging more like $1500/year, not $13000.  Then I'd look at reducing your housing costs by taking on a roommate or two, and reducing your tax burden by adjusting your withholdings because at your level you should be paying essentially zero taxes, so I'm assuming you get a giant tax refund each year.  Remember that contributing to a 401k also reduces your tax burden, so basically you get to put in more money than it costs from your budget.

After you get any 401k matching funds offered by your employer, if any, I would consider putting money into a Roth IRA instead of your 401k.  It is easier to get it back out, and the only cost is that you have to pay the taxes up front.  Except you should be paying essentially zero taxes already, so you can capitalize on that to put money away tax free into a Roth, where it then grows tax free and eventually comes out tax free.  Triple win!

Lastly, if cutting your expenses doesn't appeal to you and you still want to retire early, then it's time to look at increasing your income.  Do you love your low paying job(s)?  Would you consider a different one, preferably one within biking distance of your home?

This site is about positivity.  No one is going to come down on you for your choices, but you have to be open to the advice given if it's going to have any chance to help you.  If you're just here to say "woe is me, my life is too hard to ever retire" then this probably isn't the community for you.  Lots of people here have retired early on salaries lower than yours, by making the tough choices required to get there.  Are you going to follow their example?

[Slow2FIRE]

Damn that water bill is high.

Depends on where you live and whether or not the water bill includes sewer (or other charges).

Denver area we had base water and sewer charges of $65 per month before any usage charges.
Phoenix area we had base water and sewer charges of $90 per month before any usage charges (a small suburb just outside of the main valley metro area).
Raleigh area we are paying $50 in total for all water, sewer, trash and recycling charges with usage and base fees.

[BicycleB]

@anonymouscow, it sounds like you are chasing a lot of long shots in the hope that they pan out. Please don't be offended, I am being direct in case it's helpful. Vending machines sold to the unwary "entrepreneur", retail stores with unknown sales in decrepit unsaleable buildings, long drives - it reminds of the deals in my poor rural area when I was young. They were good deals for the seller, bad ones for the buyer. Your money is going into fixing problems (vehicles, "businesses", buildings) that used to belong to someone else.

The guesses above are just guesses based on your description. But if they're true, the best long term move is to find a way to shut down the long shots and focus your energy on decisions that have a high payoff probability. Whether that's training, moving to a place with more jobs, or just eliminating any side gig that costs money, whatever the best decisions are for you - optimizing your daily expenses is part of a bigger picture. You won't save 18.5k in a 401k currently, or during your transition period, but you can move forward and over time build your net worth. Whatever you do, keep learning. Have courage - changing your course may require as much guts as the effort you're already making. Decide wisely, even if that means moving on.

There may be some more tunnel to get through before you hit daylight. I think you can get to daylight, though. Good luck!!!

[anonymouscow]

Is your SO paying half of your mortgage costs?  Where do you live that your mortgage is so high?  When I was making $30k/year, my monthly rent was $217 (before utilities) by splitting a 2.5 bedroom townhouse half with two other people (and biking to work).  The townhouse wasn't very nice, but at that salary I knew I couldn't afford much more.  Why can you?

I agree that your car expenses are ridiculous.  You spent roughly 45% of your total income on car expenses last  year?  If you could even cut that in half and devote the other half to savings, you'd be on a path towards early retirement decades ahead of the average American.  You spent over $3k on "battery, tires, and oil change"?  What kind of tires did you buy!  I can get all of that for under $1000, and 80% of it will be the tires.  The only people I know who spend 45% of their income on cars are either rich motorheads or stupid high school kids with muscle cars they think will get them laid.  I don't think you are either one of those.

Remember that the point here isn't necessarily to max your 18.5k limit on the 401k per year, the point is find the right balance of savings vs spending for you.  If you decide that spending that money is more important than early retirement, that is also a valid choice for you to make.  Change comes from within, and if you're just here to argue that it can't be done, then you're definitely not ready to make the required changes in your own life. 

But if you are set on maxing the 18.5k, I think you can get a bunch of it from your car spending, which should be averaging more like $1500/year, not $13000.  Then I'd look at reducing your housing costs by taking on a roommate or two, and reducing your tax burden by adjusting your withholdings because at your level you should be paying essentially zero taxes, so I'm assuming you get a giant tax refund each year.  Remember that contributing to a 401k also reduces your tax burden, so basically you get to put in more money than it costs from your budget.

After you get any 401k matching funds offered by your employer, if any, I would consider putting money into a Roth IRA instead of your 401k.  It is easier to get it back out, and the only cost is that you have to pay the taxes up front.  Except you should be paying essentially zero taxes already, so you can capitalize on that to put money away tax free into a Roth, where it then grows tax free and eventually comes out tax free.  Triple win!

Lastly, if cutting your expenses doesn't appeal to you and you still want to retire early, then it's time to look at increasing your income.  Do you love your low paying job(s)?  Would you consider a different one, preferably one within biking distance of your home?

This site is about positivity.  No one is going to come down on you for your choices, but you have to be open to the advice given if it's going to have any chance to help you.  If you're just here to say "woe is me, my life is too hard to ever retire" then this probably isn't the community for you.  Lots of people here have retired early on salaries lower than yours, by making the tough choices required to get there.  Are you going to follow their example?

Mortgage is higher because it’s a 15 year loan. House is more expensive because it’s in a good school district.

With taxes I owe money at the end of the year, I probably wouldn’t if I put a bunch in a 401k, I would have to look at the math to see why I owe each year.

The 3k in car expenses was 1450 for a transmission, and another 400 to replace it again, the rest of the expenses are tires (150) battery (130) cylinder lock and key (180) oil change (35) etc.

I am open to advice, and I’m not trying to come off as someone who just wants to complain. My SO and I plan on moving soon, if it was just me I could live in a closet with roommates, I’m not saying she wants anything extravagant, but things like roommates are probably not happening. I am trying to say that I have to work within certain limitations.

[anonymouscow]

A few ideas:  You don't have a side hustle right now, you have a side hobby that is costing you money, and the opportunity to paid to work for the same amount of effort.   

Do you have a plan for how much your side hustle needs to make by December?  By March? etc.  How do you know when to call it quits and sell and get out?   Do you track all your expenses for it right now, including the car costs?

I don't have an exact time frame. The side business is a retail store in a building I own. The building needs work done before I can try to rent or sell it. So the plan is to fix the building while the store is open, once it is fixed I will see where I am with sales.

DH and I have both dabbled in self employment.  You are describing a choice to remain in low income for many years, with no money for long term savings because you will keep needing to throw money at something  in the business that is not paying off now, to make money in future, but you have no business plan set for when you will make money or stop the losses and get out.

What about the vending machines..? so far, you have the cost of a van and repairs, fuel, vending machines, perhaps $$ contracts for placement, and goods to fill it up.  You need to reimburse for bad sales / problems, and pay for a data line (if CC machine), or other extra costs.  What does it take for the vending machines to pay off -- are you making money (more than $15/hr for your time) after you pay yourself $0.56/mi minimum for the transportation?

Now you have a retail store that sounds like it needs $$ investment to be (maybe) financially positive... but you don't have money, so how will that work?   Does someone lease the retail store from you so you have a cash flow?  Are you making money (profit) from the retail store? 

Also, people will buy real estate, the price just needs to be low enough

I own the retail store, I can only be open on the weekends right now. It’s only been open for 5 weeks. It will take some time for the word to get around so sales are not great. I had enough savings to buy fixtures and inventory. Not counting my time, just looking at sales and expenses it is profitable, but not by much.


Yes I make more than 15/ hr with the vending machines even with expenses. The problems are I still have not recouped my initial investment and I do not have the time to place more machines. Vending machines are not necessarily a scam or bad investment, there aware people who do it as a full time job.

[anonymouscow]

@anonymouscow, it sounds like you are chasing a lot of long shots in the hope that they pan out. Please don't be offended, I am being direct in case it's helpful. Vending machines sold to the unwary "entrepreneur", retail stores with unknown sales in decrepit unsaleable buildings, long drives - it reminds of the deals in my poor rural area when I was young. They were good deals for the seller, bad ones for the buyer. Your money is going into fixing problems (vehicles, "businesses", buildings) that used to belong to someone else.

The guesses above are just guesses based on your description. But if they're true, the best long term move is to find a way to shut down the long shots and focus your energy on decisions that have a high payoff probability. Whether that's training, moving to a place with more jobs, or just eliminating any side gig that costs money, whatever the best decisions are for you - optimizing your daily expenses is part of a bigger picture. You won't save 18.5k in a 401k currently, or during your transition period, but you can move forward and over time build your net worth. Whatever you do, keep learning. Have courage - changing your course may require as much guts as the effort you're already making. Decide wisely, even if that means moving on.

There may be some more tunnel to get through before you hit daylight. I think you can get to daylight, though. Good luck!!!

I appreciate your advice, I want to at least try to give the retail store a chance though. It’s only been open for 5 weeks. The expenses are low, sure it is taking time and miles on a vehicle, but I don’t see how it is hurting anything beyond that.  My life in the 9-5 hasn’t really panned out all that well, which is why I started trying other things. Years of school, years of slowly being promoted, so I don’t see that as having any greater chance of a pay off than anything else, especially if I keep my range within walking / biking distance.

[Goldielocks]

If you can switchout, refi the mortgage to a long amortization - 30 years, etc, and put the rest of the monthly "savings" into 401k.

[anonymouscow]

Just a side note, before 2010 I lived a very different life. I made 40k a year, I maxed out my IRA and HSA each year as well as putting thousands into a taxable account. I had a paid off house in a low cost area, taxes utilities, internet, 300 a month. I had a roommate paying 300 a month. Trying to show I am capable of super cheap living and high savings, I would like to get back to that point.

[erutio]

First thing that jumps out at me is you're commuting 50 miles round trip for a 30k job.  Surely you can find something closer that pays the same amount?  Do you live rurally?  Is the job market that dire around you?  You say it's a good school district, so there must be something closer.

You can type, form reasonably thought out responses, have hustle, plan ahead (buying the gas at discount).  I'm getting this just from your posts.  Together this seems more than a 30k/yr skillset, which quite frankly, is quite a low bar.

[sol]

You can type, form reasonably thought out responses, have hustle, plan ahead (buying the gas at discount).  I'm getting this just from your posts.  Together this seems more than a 30k/yr skillset, which quite frankly, is quite a low bar.

I agree.  This poster is motivated, intelligent, and careful with their spending.  I think he/she is going to be just fine in the long run, and is a good candidate for a transformational life change ala MMM.  Even without achieving the stated goal of maxing out their 401k limit right away, getting even halfway there would put them on solid financial ground going forward.  Income should go up as expenses go down, and soon the runaway compound interest train will have them considering the time value of continued work vs retiring at 40 to find new leisure pursuits.

All it takes is concrete steps in the right direction, every paycheck.  I'd start with putting a few hundred per month into the 401k plan, especially if there is an employer match.

[sol]

Mortgage is higher because it’s a 15 year loan. House is more expensive because it’s in a good school district.

15 year mortgages on houses in good school districts are a luxury purchase!  Good job. 

I'm not sure a 15 year is the fastest path to wealth, but I'm presuming you did the math and decided that it was a better option for you than the 30 year.  In that case, keep in mind that you will not have that mortgage expense forever.  How far into the amortization schedule are you?  Remember that in something less than 15 years, you're going to have another $500/month in free money to play with, and your living expenses will be lower.  Be sure to add that amount to your savings rate, when the time comes.  Unless you're already retired by then.

I would have to look at the math to see why I owe each year.

This is why I think you're on a slow pathway to success.  Merely recognizing that you need to look at the math in order to make a good decision is huge step in the right direction, and one that most Americans can't manage.  Step two, of course, is to actually do the math.  Step three is to follow through on making the changes the math requires.

I’m not saying she wants anything extravagant, but things like roommates are probably not happening. I am trying to say that I have to work within certain limitations.

That's fine!  You are allowed to spend your money however you like.  Just keep in mind that some other people have made different decisions, and have been able to save more as a result.  You shouldn't say "it can't be done" when someone else is doing it.  Instead, maybe realize that you have made a deliberate choice to not lower your housing expenses in the way that some other people have, and you have therefore made a deliberate choice to not save more for your retirement.

The internet is full of people making $100k/year who claim to be broke because they can't afford both private school for their three kids, their housekeeper, their pool, AND the monthly payments on their new Mercedes SUV.  Well, of course they can't afford to save anything with silly spending like that.  We look at them and laugh.  Someone else is looking at you and me and laughing for the exact same reasons.

[BicycleB]

@anonymouscow, it sounds like you are chasing a lot of long shots in the hope that they pan out. Please don't be offended, I am being direct in case it's helpful. Vending machines sold to the unwary "entrepreneur", retail stores with unknown sales in decrepit unsaleable buildings, long drives - it reminds of the deals in my poor rural area when I was young. They were good deals for the seller, bad ones for the buyer. Your money is going into fixing problems (vehicles, "businesses", buildings) that used to belong to someone else.

The guesses above are just guesses based on your description. But if they're true, the best long term move is to find a way to shut down the long shots and focus your energy on decisions that have a high payoff probability. Whether that's training, moving to a place with more jobs, or just eliminating any side gig that costs money, whatever the best decisions are for you - optimizing your daily expenses is part of a bigger picture. You won't save 18.5k in a 401k currently, or during your transition period, but you can move forward and over time build your net worth. Whatever you do, keep learning. Have courage - changing your course may require as much guts as the effort you're already making. Decide wisely, even if that means moving on.

There may be some more tunnel to get through before you hit daylight. I think you can get to daylight, though. Good luck!!!

I appreciate your advice, I want to at least try to give the retail store a chance though. It’s only been open for 5 weeks. The expenses are low, sure it is taking time and miles on a vehicle, but I don’t see how it is hurting anything beyond that.  My life in the 9-5 hasn’t really panned out all that well, which is why I started trying other things. Years of school, years of slowly being promoted, so I don’t see that as having any greater chance of a pay off than anything else, especially if I keep my range within walking / biking distance.

Ok!

One way or another, I'm sure you'll succeed. I agree, 5 weeks is pretty short.  :)

[Peachtea]

It sounds like you live in a LCOL area due to all the driving. In which case, your housing + transport expenses are incredibly high. I think it’s crazy that my half of housing + transport living downtown Chicago is lower than your share (which sounds less than half) of living in a presumably LCOL town, when I make over 3x what you do.

I see that part of this is because you have a 15 year mortgage. (I think the advice to look at refinancing to a 30 year mortgage is great.) But regardless, I think you and SO need to re-evaluate what’s a fair share for you. My concern is that you’re looking at your combined overall expenses and maybe seeing that she’s paying more so thinking you’re not paying that much in comparison. This leads to life style inflation and you paying more than you would alone, because you’re essentially living at your joint income level without actually joining the income to jointly save. IMO couples who aren’t financially joined should have their split expenses mimic the lifestyle affordable to the lowest earner. (Actually I think this is also best for those with joint finances.) And luxuries the higher earner wants but the lower earner can’t afford are paid by the higher earner.  How much would your housing + transport cost you if you rented a 2 bedroom place with a roommate near work? This should be your fair share or you and SO should make life style changes so that your splitting of expenses can equal this amount.

[Goldielocks]

Is it "use it or lose it" in the USA for the $18k 401k contributions?  (plus a bit of catchup allowed after age 50).

If so, I would revisit the 15yr mortgage versus 401k or ROTH decision.

[MrUpwardlyMobile]

Hello, I come from another thread, people are telling me I can save 18.5K in a 401K while making under 30K a year.

I make $29,640 a year.

After taxes and health insurance, my take home pay is $1,941 a month.

I am a co-borrower with my SO for a home mortgage, she pays the bulk of it.
I pay the water bill, my car insurance, and the yearly HOA fee.

I have tracked all my spending this year.

Spending - 8 months this year - Total and Monthly

$4,248.89 / 8 = $531.11 (My share of the mortgage)
$395.57 / 8 = $49.45 (Water bill)
$154.04 / 12 = $12.84 (Yearly HOA bill)
$56.01 / 12 = $4.67 (Car Registration)
$245.39 / 6 = $41.33 (Car insurance)
$1,365.83 / 8 = $170.74 (Gas for cars)
$3028.30 / 8 = $378.54 (Car maintenance and repairs)
$240.86 / 8 = $30.11 (Home repairs)
$67.59 / 8 = $8.45 (Pet food and supplies)
$710.15 / 8 = $88.76 (Food)
$626.70 / 8 = $78.34 (Misc / other)
$4,400 / 8 = $550 (Purchased used vehicle)

Total Spending $15,539.33 / 8 = $1,942.42
Total Income $15,528.00 / 8 = $1,941.00

-I still need to pay $2,500 in medical bills.

-This is just my spending, the SO does not track hers.

-The $4,400 for a used vehicle shouldn't happen every year.

-The car repairs shouldn't be that high ever year, the $3028.30 includes things like battery, tires, oil changes etc though.

- I fill up gas cans when I have fuel points at Kroger, the gas goes toward multiple cars in the household.

If you exclude car repairs, the vehicle, and medical bills, I could have saved about $7,000 this year, plus any tax savings.

I could try and pay a smaller portion of the mortgage, otherwise the only way to lower it would be to move.

Most of the items I am not sure how to lower, I shop around for the lowest price, buy used when I can, do whatever car / home repairs I am capable of.

The misc section is things like a $23.00 phone battery, $30.00 shoes, $36.84 gifts, $5.00 parking fee, $225.25 unavoidable expenses, $52.00 entertainment, so around $100.00 was not for a purpose spending.

I don't see how I could ever come close to saving 18.5k a year in a 401k, even if I cut out food, repairs, and misc, my expenses would be too high.

First, You’re bleeding money and it mostly relates to cars....  second, the picture makes no sense without your spouse’s expenses and income included.  Third, holy crap please start putting money in your IRA.  THE SAVERS CREDIT IS FREE MONEY FOR YOU. https://money.usnews.com/money/retirement/articles/2014/12/22/how-to-claim-the-savers-credit

[anonymouscow]

Hello, I come from another thread, people are telling me I can save 18.5K in a 401K while making under 30K a year.

I make $29,640 a year.

After taxes and health insurance, my take home pay is $1,941 a month.

I am a co-borrower with my SO for a home mortgage, she pays the bulk of it.
I pay the water bill, my car insurance, and the yearly HOA fee.

I have tracked all my spending this year.

Spending - 8 months this year - Total and Monthly

$4,248.89 / 8 = $531.11 (My share of the mortgage)
$395.57 / 8 = $49.45 (Water bill)
$154.04 / 12 = $12.84 (Yearly HOA bill)
$56.01 / 12 = $4.67 (Car Registration)
$245.39 / 6 = $41.33 (Car insurance)
$1,365.83 / 8 = $170.74 (Gas for cars)
$3028.30 / 8 = $378.54 (Car maintenance and repairs)
$240.86 / 8 = $30.11 (Home repairs)
$67.59 / 8 = $8.45 (Pet food and supplies)
$710.15 / 8 = $88.76 (Food)
$626.70 / 8 = $78.34 (Misc / other)
$4,400 / 8 = $550 (Purchased used vehicle)

Total Spending $15,539.33 / 8 = $1,942.42
Total Income $15,528.00 / 8 = $1,941.00

-I still need to pay $2,500 in medical bills.

-This is just my spending, the SO does not track hers.

-The $4,400 for a used vehicle shouldn't happen every year.

-The car repairs shouldn't be that high ever year, the $3028.30 includes things like battery, tires, oil changes etc though.

- I fill up gas cans when I have fuel points at Kroger, the gas goes toward multiple cars in the household.

If you exclude car repairs, the vehicle, and medical bills, I could have saved about $7,000 this year, plus any tax savings.

I could try and pay a smaller portion of the mortgage, otherwise the only way to lower it would be to move.

Most of the items I am not sure how to lower, I shop around for the lowest price, buy used when I can, do whatever car / home repairs I am capable of.

The misc section is things like a $23.00 phone battery, $30.00 shoes, $36.84 gifts, $5.00 parking fee, $225.25 unavoidable expenses, $52.00 entertainment, so around $100.00 was not for a purpose spending.

I don't see how I could ever come close to saving 18.5k a year in a 401k, even if I cut out food, repairs, and misc, my expenses would be too high.

First, You’re bleeding money and it mostly relates to cars....  second, the picture makes no sense without your spouse’s expenses and income included.  Third, holy crap please start putting money in your IRA.  THE SAVERS CREDIT IS FREE MONEY FOR YOU. https://money.usnews.com/money/retirement/articles/2014/12/22/how-to-claim-the-savers-credit

Unless I find a closer job, I need to vehicle to get to and from work. Even then that will take some time, I'm not sure what people expect me to do, I can fix the car when it needs a battery or tires, or lose my job by not going to work.

Unfortunately I only track my own income and expenses, those are the numbers I have to work with.

I know the savers credit is free money, but this year it doesn't look like I will have any money to put into an IRA. I try to watch all of my spending, but a few unforeseen expenses and that means no savings this year. I know I will not have the same expenses every year, I didn't plan on having everything happen at once this year.

[sol]

I try to watch all of my spending, but a few unforeseen expenses and that means no savings this year. I know I will not have the same expenses every year, I didn't plan on having everything happen at once this year.

One of the best benefits of having a budget that allows you to save money is that you suddenly become resilient to these sorts of unplanned expenses.  If you were like most Americans, and had already maxed out your salary with your mortgage and grocery bills, then having a car repair and a medical emergency in the same year might have driven you into bankruptcy.  Of course, you have to be very honest with yourself about whether or not these expenses should have been part of your budget to begin with, or if they were genuinely unpredictable financial emergencies.

But I think it's okay to reduce your savings rate, temporarily, if you have to deal with unforeseen expenses.  Just remember to get back on the horse as soon as possible, so you can start building an emergency fund against next year's unforeseen expenses.  When you're just starting out on a low salary, even getting a few thousand dollars in the bank can feel very empowering if it means you're no longer living on the razor's edge.

[anonymouscow]

Just a side note, before 2010 I lived a very different life. I made 40k a year, I maxed out my IRA and HSA each year as well as putting thousands into a taxable account. I had a paid off house in a low cost area, taxes utilities, internet, 300 a month. I had a roommate paying 300 a month. Trying to show I am capable of super cheap living and high savings, I would like to get back to that point.

So what happened in 2010?

I quit the job where I was making better money due to health concerns. I started dating my SO and my house was in a crappy school district so I sold it, ended up buying a more expensive house with my SO in a better school district. In hindsight we probably just should have rented out my house and lived in an apartment til her kids were out of school. But in the span of a few years my income went down by a third and my spending doubled.

[robartsd]

Damn that water bill is high.

Depends on where you live and whether or not the water bill includes sewer (or other charges).

Denver area we had base water and sewer charges of $65 per month before any usage charges.
Phoenix area we had base water and sewer charges of $90 per month before any usage charges (a small suburb just outside of the main valley metro area).
Raleigh area we are paying $50 in total for all water, sewer, trash and recycling charges with usage and base fees.

My waste bill is over $84/month (sewer, storm drainage, & trash). If installing a composting toilet and grey water system would have let me opt out of the sewer charges, I would have done that instead of replacing my sewer line last year, I'd also cut the frequency of trash service in half if I could reduce my bill (already have the smallest service available and usually use less than 25% of capacity). Water is a separate $55 bill (currently flat rate by number of bedrooms in home - hopefully I'll be able to reduce this after they install metering).

[Nicholas Carter]

It is possible, on 29,000 dollars, to save 18,000 dollars. But what I mean when I say that is: "By living within 5 miles of my workplace, owning a 15 year old car, not living in a HCOL area, not having any kids, and living with seven roommates, I was able to live on about 14,000 per year per person, and I know I didn't do a very good job of minimizing expenses." You can cut expenses right to the bone if you're willing to live in what is basically a commune of childless professionals.

I would also encourage your SO to look into healthcare jobs that don't require so much driving -- with the economy being what it is and the shortage of healthcare workers, she should be able to find something in a hospital or care facility (assisted living/nursing home, etc.).

A dirty secret of the industry is that many home health programs do a very poor job of training their employees or helping them earn a certificate, and some health aide jobs require no actual certification to begin working. This is very convenient to start, but combined with the basically nil commitment to employee development it means that you are unable to move to any other position, as you have no certifications of skill.

[robartsd]

$56.01 / 12 = $4.67 (Car Registration)
$245.39 / 6 = $41.33 (Car insurance)
$1,365.83 / 8 = $170.74 (Gas for cars)
$3028.30 / 8 = $378.54 (Car maintenance and repairs)
$240.86 / 8 = $30.11 (Home repairs)
$4,400 / 8 = $550 (Purchased used vehicle)

Still not clear on the car maintenance costs. You've stated $1850 for van transmission, $360 for battery/tires/ignition/key for the junk car. That leaves $818.30 which is a whooping $102.29/month for things like oil changes (are you servicing all household vehicles as well as buying most of the gas?). Depreciating the vehicle purchase (I'm guessing that's the van, not the falling apart car), transmission, battery, tires, ignition, key over 5 years is $110.17/mo (mostly for the vending machine business vehicle). So a more realistic average care maintenance spend is about $212.45/month and about half is an expense of your vending machine business.

How often do you service the vending machines? If you don't need to service every day, I'd ditch the car and replace with an e-bike. Use the e-bike to commute on days you're not servicing the vending machines to cut your personal gas usage down quite a bit. If the vending locations are a significant distance from your workplace, you could even park near them and bike the remaining distance to your salary job.

Personally I'd look to cut the loss at the retail store, but if you don't account for your time and transport - at least it's a profitable hobby. Would taking capital out of the retail store (even at a potential loss) provide meaningful resources to expanding your vending business?

Hopefully you'll get lucky on the house and no longer need the good schools at a time when the real estate market is hot.

[talltexan]

It sounds like you live in a LCOL area due to all the driving. In which case, your housing + transport expenses are incredibly high. I think it’s crazy that my half of housing + transport living downtown Chicago is lower than your share (which sounds less than half) of living in a presumably LCOL town, when I make over 3x what you do.

I see that part of this is because you have a 15 year mortgage. (I think the advice to look at refinancing to a 30 year mortgage is great.) But regardless, I think you and SO need to re-evaluate what’s a fair share for you. My concern is that you’re looking at your combined overall expenses and maybe seeing that she’s paying more so thinking you’re not paying that much in comparison. This leads to life style inflation and you paying more than you would alone, because you’re essentially living at your joint income level without actually joining the income to jointly save. IMO couples who aren’t financially joined should have their split expenses mimic the lifestyle affordable to the lowest earner. (Actually I think this is also best for those with joint finances.) And luxuries the higher earner wants but the lower earner can’t afford are paid by the higher earner.  How much would your housing + transport cost you if you rented a 2 bedroom place with a roommate near work? This should be your fair share or you and SO should make life style changes so that your splitting of expenses can equal this amount.

This is a really tough nut to crack. Commitment level of the relationship depends on many different factors. But especially when they are at sub-marriage levels of commitment, persuading SO to accept a more modest lifestyle will be difficult. Lord knows it's hard at the marriage level.

No doubt SO works hard for her income, and would have to be persuaded that retirement savings for OP--particularly a Mustachian level of such savings--is not a luxury that should be in line after some other items that will pay off now in launching children and maintaining the equity in their property.