Shauk

K so i'm 28, still renting (throwing my money away) and the only bill i have that isn't just "throwing money away" would probably be my car payment since it's an investment. It's still going to depreciate though, as much as I love this car.


I just feel like I'm doing something horribly wrong, and I feel like i'm starting much much too late when it comes to worrying about how to manage my money. I just gotta say I'm tired of the the paycheck to paycheck, job to job in positions that garner no respect whatsoever and basically being a public servant to be the face of some other moneybags kind of person.



So I mean, I guess this is a pretty vague topic, but I know nothing of the things like stock markets, banking options past a checking account or a savings account. My credit pretty much sucks due to not being prepared for the worst when I got my 1st credit card. Trusted my mother of all people by buying a computer for her as long as she'd make the payments. But she didnt. and on top of that, i got laid off shortly after and was on unemployment and changed addresses about 10 times that year trying to find work.

I just feel like I haven't really grown financially, in fact it just feels like things cost more and more money and i'm making less and less.

This partially is the reason I'm ready to bolt and get the hell out of Idaho, When I lived in WA last time I was able to live comfortably at least ya know? but yeah, now, not so much.


So meanwhile, while I finalize a decision on my schooling so I can get a better paying job that I can support my future with, what would you advise me to try and do in the mean time to maximize my potential with what little money I am making now?

if you need more information, feel free to ask.

I don't own a home, I'd like to. I don't make enough money though. seems like alot of people my age are in a house of their own by now so again, I just feel like I'm missing something crucial here...

Average_Joe

For someone who is at your point in life financially, I would recommend living below your means as much as possible. The first think you need is to slowly build a savings account, while decreasing your debt as quickly as possible. Meaning, pay off your car, and put a small amount away. Once you have paid off your debts, take that new found money and put it into your savings to build it up faster. You have a goal of going to school? Find out how much it will cost and save up for tuition.

At this point in your financial life, you should not be worried about stocks and investments. Also, paying rent is not always throwing your money away. Ask the millions of people who bought houses in good times and then had to foreclose when the housing bubble burst if they would have rather paid rent. They threw away money and then some.

Also, a car is not an investment unless you are making more money from the car than you are paying out plus depreciation, such as a limo or delivery truck. It is a liability otherwise (financially speaking).

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I think I'll procrastinate......in a little while.

fresnelly

See if your bank can set up an automatic transfer where say, $30 a week gets moved into a new, separate account. You won't miss it from your main account and if you can leave it alone, before you know it, you'll have some serious funds to invest or get you through any emergency periods.

In other words, pay yourself.

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Cynthetiq

1. live below your means.

this means your outgo must be much less than your income.

but how can that be? i need cable, i need a cellphone, a new computer, latest video game, i need a car, etc.

no, you don't need anything but food and shelter.

2. pay yourself first.
put some savings away even if it is $5 a week. it is still more than 0. Each time you wnat to buy something you can think of, well I could have this really cool thing now which later I'll still want something hotter and newer, or I can just save it and buy a bigger ticket item or improve myself financially

I love video games, I don't own a 360, PSP, PS2, PS3, Game Cube, Wii, DS. Had I purchase all of those I'd have spent over $2,500 in consoles, games, and accessories. That is $2,500 more in my savings account that when my boss says "Jump!" I say,"Maybe I'll jump. Give me a minute to think about it."

take a step back so that you can take a leap forward.

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snowy

You already know my advice, because I already gave it to you!

Find an online bank (I use ING Direct, there are others), and start a savings account with a high interest rate (ING Direct's is much higher than any brick-and-mortar bank). Then, start an automatic savings program to transfer whatever you can comfortably afford into the savings account.

Before long, you'll have a nice safety net built up--and that safety net is essential.

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LiBan

OK, so I have been taking a personal finance course and some basic things from my notes:

The most important thing is to pay off your biggest bills first. The big ones will only get bigger. Then pay off each bill until you have paid off the smallest ones.

Cut up all except one major credit card and cancel the services. You only need one. Also, agencies who lend money and/or approve loans will look at your potential for debt. The more credit cards you have the more potential debt you could suddenly find yourself in. (I thought that was sort of crazy) So, take that into consideration.

Never use a credit card to pay off your basic living expenses.

If you don't have the money for school, taking out a loan is not a bad idea. Most education loans don't begin to compile interest until after you graduate. A college education is one of the only things that you should pay for with credit (major medical emergencies and taking out a mortgage on a house being the other truly good uses of credit). Besides, as a college graduate you will have the potential to make more money.

The advice to live below your means is absolutely correct!

Putting aside money is also very correct. You should start saving now. Ideally you save 15% of what you earn, but put away ANYTHING that you can. My teacher has told me that your twenties and early thirties are the MOST important years to save. If you don't start saving until later, you will never catch up to what you could have saved if you start now. Like Cynthetiq said, even if it's just $5 it is better than nothing.

There are two basic goals with a savings account. The first is to have enough set aside to support you for 4 to 6 months should you suddenly be out of work or unable to work. The second is to save for retirement.

Good luck.

Shauk

so so far the living beneath your means thing is fairly good advice in theory.

problem is, that will have to wait, because right now I make nothing in the way of flexible income. I get almost exactly enough to get by where I live, which is kind of sad when you factor in that my rent is a mere 200$

I have 500$ in an INGdirect account actually, thanks to snowy's advice
not much but it will serve it's purpose in time I'm sure.

I have a 2 year contract I just started with verizon, and for me, a cell is a necessity, employers need to be able to reach me, and a land line would be a waste of money because I dont spend that much time at home wherever I live anyway. living life isnt done from the bedroom.

"id rather be working right now" is generally my mindset, i'm kind of a workaholic lately, maybe it's just another form of escapism to me since I quit playing computer games and the like.

maybe I won't "need" a car when I move into an area with public transit like Seattle/Renton as I'm planning on doing, but when you live in a spread out small town and have a delivery job that requires a car, then well, you need a car.

but yeah I could be saving the 300$ a month in payments and insurance if I didn't have that car huh?

but then factor in the cost of a transit pass and i'm prolly looking at 250 in savings.

I dunno though at this point I'm just probably going to aim for paying it off.

I don't have any credit cards so, no worries there.

right now, a lot of the good advice in this thread would simply cripple me though. (though I agree with the video game/movie etc stuff, I don't need it)

once I get moved and get a new job, things should look alright

Average_Joe

Do you have an expensive car? If so, do you need an expensive car? You might be able to get by with driving a sh**box until you have more income.

If you think hard enough, I'm sure you can find ways to cut costs.

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I think I'll procrastinate......in a little while.

squeeeb

you are NEVER too late to start saving.

listen to Cynthetique, and pay yourself first. every paycheck, put some of it away in an interest bearing account. one of the accounts i have is Edward Jones "checking" account. it has a great interest rate, i can write checks on it, but i don't. i use it as a savings account.

small things, like packing lunch instead of buying out, taking the change out of your pants when you do laundry and cashing it in, all add up.

clip coupons. people feel embarrassed about using coupons, screw that. you save 25 cents here, 50 cents there, you have a few extra bucks.

little things add up. check out edward jones...

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onward to mayhem!

LiBan

squeeeb is absolutely right, coupons really add up in the end.

Baraka_Guru

Yeah, some good advice so far. Get it out of your head that your car is an investment, though. It's a depreciating asset, which is far different. You need to manage it because it costs you to own and operate it and you will, in the end, have far less to show for it than you paid into it. That is not an investment. An investment earns you a return. It makes you money.

This might sound like simple semantics, but semantics are underrated. It's how we understand the world.

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telekinetic

You pay $200 a month rent, and $300 a month COMBINED payment and insurance, and you're still living paycheck to paycheck?!!?! Shit man! Unless you have a a coke habit you need to kick, you need a better job with a quickness!

Shauk

yeah i'm just a part time pizza guy. Thats how it goes when you don't work a full time job in a state that seems to revel in it's glory of a 5.85 minimum wage (was 5.15)

and people are bitches who don't tip, and I pay 60$ a week in gas to stay in work to top it all off.

pretty stupid, which is why i'm moving, I keep going back to this job cuz it's easy, I need to push myself to earn more.

LazyBoy

I must ask.....Do you do anything else? Are you an aspiring musician? In school?.......just curious. Seems as though at least a full time job would help out.


-Will

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xxxafterglow

Dude, the doormen in Seattle make more than you do! Seattle has pretty good public transit but it's buses so you're still stuck with morning traffic and everything.

If you want to save on public transport, save EVERY transfer ticket you get. They cycle the colors/letters (e.g. Pink X's) every day but you can usually get a glance before you get on. My boyfriend used to carry around an envelope of transfers and used those instead of paying. It REALLY helps (it's $1.25 to ride, $1.50 during rush hour for a two hr period).

Not sure about Renton but if you live in a cheaper area of Seattle (e.g. Leschi, Beacon Hill, even some parts of West Seattle), you can get downtown in 20-30 min (by bus). Also, for some reason Seattle is full of short-term rentals. It seems like a lot of young people pop in and out of that city or at least move around a bit. I've rented/scouted for $375/mo (shared w/ two ppl), $400/mo (shared w/ 9 ppl), $275/mo (would have shared w/ 10 ppl), and $675/mo (for the boyfriend and I together). As big cities go, Seattle has low rent.

Sell as much as you can and keep your bare necessities. I kept a cell phone (one up from the most basic plan) and shared internet with my housemates/neighbor (this can really slash that $50/mo down to maybe $10 or $20/mo) but that was it. You can find a lot of free stuff on CL cuz (like I said before) people are always moving - take care of it and sell it later at a higher price when you move/upgrade.

Ditto on the Savings account. Don't touch that shit til you know you need to use it. Don't dip into it for stupid spending - save, save, save.

But yeah, you need to push yourself to get a better job. Even retail pays more than that. I was severely underpaid at my job there (HUGE and well-known art gallery) but was making around $11.50/hr and was able to have money to put away and live pretty comfortably (take vacations and stuff). My boyfriend was making $8/hr working for a health care advocacy group. A receptionist job in Seattle will be around $9-10/hr but there are tons of service jobs (waiter, clerical, retail) that can start you out with decent pay. Hell, Dick's burgers offers pretty good pay PLUS HEALTH INSURANCE!!

It seems like you're selling yourself short in the job market. There are plenty of idiots getting paid to do jobs you could perform blindfolded. I'm sure you're qualified for more than a pizza delivery job. Anyway, temp agencies, craigslist and the Stranger job listings are your friends. If you're interested, my boyfriend worked for Washington CAN, a really cool organization with awesome people. You canvas door to door and it pays pretty well. They're always taking new people. Whatever you take, make sure it's full-time (even if you're an artist/musician - you have to push yourself to make work / play on your off-time).

Hmm I also have to ask... why Renton? Why not Seattle? Just curious.

P.S. Consider living in a house with people. They usually already have a TV and my house had two PS2s and a really good game/movie collection. It's also hella fun (most of the guys I lived with smoked so we had a house dealer) and if you can get over the fridge sharing (get a mini-fridge) and the toilet paper shortage (buy your own and keep it in your room), you probably won't need to buy much more than a bed and something to throw your clothes in.

P.P.S. Rental plug. Renting is awesome, especially in your situation - you're not committed to a job or a person or a city, even. It's one less piece of baggage holding you back. Ok, and I'm also going to say you should just move to Seattle - the job market and life is better, you're close to everything, etc. etc. Unless you have some good reason for being in Renton, do Seattle.

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