Help on how to save money?

[Pedernal]

Income isn't exactly an issue. I make decent money, and I am about to receive a raise, but I am putting 13% in my 401k. My main problem is just the large chunks of money that I seem to have to dish out when something comes up, and it just seems like there is always something happening. I guess it's just life, but still looking at ways to better save money.
I'll definitely look at that acorn app. I use to always save my change back on high school when I cut grass and always had cash; before I had a bank account and a debit card, so now I rarely have cash in me.
Good advice here so far, keep it coming!

Set up a savings account and have your raise electronically deposited there. Set it up so you never see a penny of it.

[Austin]

Going to sound like a broken record here but start with a budget.

Go back over your last several months statements and break down all your spending see what you are truly spending and where. That will tell you where you can cut things out.

One big concern is if you are struggling to save now paying 200 a mo rent how are you going to adjust to a 900-1600 a mo mortgage.

You need to get a realistic idea of what your proposed mortgage will be and be able to save that a month plus some. That will prepare you for the payment. I would also suggest as others have paying off the truck shop your insurance etc.

Also fill out a balance sheet and update it once to twice a year it will give you a realistic outlook on where you are financially.

Set financial goals and make a plan to achieve them.


Fail to plan plan to fail

[mjhaverkamp]

I worked two jobs from age 20 to 24, then I started my own business, then I worked an even more insane amount of hours, either go to school for 6-8 years or bust your back, or marry a rich girl

[gatorgrizz27]

If you pay bills from your savings account, it's not a savings account. If you already have a checking account and 2 savings accounts, here is how I would handle it:

All direct deposits and significant checks get deposited to your checking account. All bills get paid from your checking account, both fixed expenses and "fun money." You should be enough of adult to not blow everything in your checking account by payday, and if you go to an expensive dinner for a buddy's birthday or similar, even it out somewhere else.

Use one savings account for your emergency fund, stuff like fixing your truck or getting laid off. Start with $1,000 immediately, and try to build up to ~6 months worth of bills over the next year or two. If you buy a house and the AC goes out or some other major expense, this is where the money will come from. I would also put small cash or check income into this account. If you sell a couch on Craigslist, work a day for a buddy who gives you some cash, or get Birthday money, put it here. It will grow with no real effort.

Use the other savings account for a house down payment. The most logical way to do this is to figure out what the mortgage payment in your price range would be, and save that amount minus your $200 rent. If you're buying a house for $180k and the mortgage is $900/month, you need to save $700/month. If you can't do that, you can't afford the house, and you let yourself know before you end up in forclosure.

The good thing about doing it this way is that once you buy the house, you know that you can afford the mortgage without changing your lifestyle, and it is no big deal.

[Artos]

Who in the hell spends $2000 a month partying?

That comes to:

$24,000.00 A YEAR


...for those that cannot add

I can see where the problem is.

[jflint]

Get rid of debt, delay gratification, save automatically through direct deposit, learn to fix things yourself, don't eat out.

[Eagle19]

I think a lot of people read the post wrong. He isnt spending $2000 a month on partying.

As far as insurance that doesn't sound too off. I'm 24 and my insurance is $215 a month for my 2016 truck.

My biggest concern for you is the monthly house payment. I pay $1500 a month for my house. I only put like 3% down on my house and it still cost us like $12000 after fees and all that. Would you have room mates? Otherwise that's a big bill to eat.

Also health insurance, are you paying that bill yet?


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[Redbeard31]

i am going to take a contrarian approach and address the income side of the equation. Dave Ramsey always assumes that a person's income is fixed. For you, that is not the case.

You are only 25 years old. Your problem is not spending...your problem is that you do not make enough money to live a decent lifestyle. And that is ok....not many people in their mid-20's do. But unless you want to struggle for the rest of your life, you will have to do something NOW to increase your income. Waiting for a raise is not the answer. Do something now to change it.

You have a prime opportunity RIGHT NOW to increase your income. Go to school, learn a new trade, move locations...do something. All the Dave Ramsey advice in the world will not help you if you still cannot earn a decent wage. You do not want to have to pinch pennies the rest of your life. It is a crappy way to live.

[trophy8]

Sounds like you have an income problem. The old saying of "it's not what you make, but what you save" is bs. If you don't make enough money you can't save any. Get out of the rut that you are in income wise. Either a second job or find another one that pays better. Do you have any skills where you can make some side money?

Bingo. Its easy for a guy to tell you to save when he pulls in $140k a year. What I do is put at least $1000 per check in savings. I keep very little hooked up to my debit cards. I do not own a credit card. Only things I owe on are my wifes Tahoe and the house. I do owe a little on the truck I bought 6 months ago but have enough to pay it off whenever. at 1.65% interest my money makes me more elsewhere than paying it off fast. When I log in to see my balances it helps only seeing a few hundred bucks there and if I want to make a big purchase I have to move money. Now this doesn't always keep me from buying something big I want. But it makes you stop and think and it puts it into perspective when moving $1000+ out of the savings account and seeing that balance drop. Many times I have moved money only to dislike what that savings looks like and I decide to move it back and not make the purchase. SOme months very little goes into savings. Some months a lot goes in. I have my savings set to cover 3-4 months minimum of zero income at least. I have been without before. Had to choose which bills to pay and which not to because I couldn't. I don't plan on ever doing that again. If there is something I really want and don't feel like pulling from savings, I will offload a gun or something I don't use or don't like as much as others. If we ever were to get in a bind, I have a fair amount of toys that will go. Just make little changes. Buy the store brand food instead of name brand. Don't eat as many steaks. Cut back on the beer. Cut back on cable, cell phone etc. Shop around for insurance rates. Refinance your vehicle to get a better rate ( NOT to stretch payments out longer). Whole long list of things. Good luck man. Buying a house is freaking expensive. Once you move in the real expense starts having to buy the little things for bathrooms and all lol.

[trophy8]

Get advice from all of you! Thanks for all the input.
Some of you have asked for a break down of my expenses.
I moved back in with my parents to better save money for the house instead of paying $575 for rent, but I'm still giving them $200 a month. I pay $240 a month for my truck note, but am 8 months from paying it off. I'm still on my parents cell phone plan because it is cheaper, but I pay them the $50 it costs for my line per month. I pay another $215 per month for truck insurance. I buy my groceries every Sunday morning and cook all my meals for the week (lunch and dinner for each day) and just buy two cartons of egg whites for breakfast; this costs me about $65 per week, which amounts to about $6.50 per day for three meals. A main cost is gas though, because I live about 40 minutes away from where I work; I'd say $100 a week. And then of course there is the fun money, I do have a life ha, but I don't run up high bar tabs or do anything excessive on the weekends. And not sure how much I put towards the fun money. When I get paid, I always keep $1000 in my checking to last me the two weeks until I get paid again, and that is where the fun money comes from. When I get paid I put all money that is over $1000 into an alternate savings account, because my regular savings account is where my bills come out of which I already have a direct deposit set up to put funds into when I get paid, so if there is $1900 in my checking when I get paid then I put $900 into the alternate savings account.

Based on what you say you are struggling with and your above expenses I will tell you I don't think you can afford a house.

I pay $278 a month for 3 vehicles. 2015 chevy Tahoe loaded out. 2011 mazda cx7 for commuting to work 450 miles. 2007 chevy classic 4x4 for when I am home. I have 250k/500k coverage as well as a $1,000,000 rider policy in case there is a bad accident. I am 28. These will go up as I had an at fault accident a few months ago. $1000 for 2 weeks for a guy living with his parents and no kids is nuts IMO. Me and my wife spend about that and we have a baby. My monthly bills are around $3000. House, her Tahoe, cable, phones, electric, insurance, etc. I do buy more things than I should a lot of times but am at a point where we can do that. You should be able to live on $500 for 2 weeks pretty dang easy being a non married guy. I think you need to take a look at what you spend going out. Maybe you spend some every morning getting a drink and snack or something on the way to work? Idk. But $1000 every 2 weeks should last a good long while without having many bills.

[el_tejas_gringo]

That comes to:

$24,000.00 A YEAR


...for those that cannot add

I can see where the problem is.

This guy obviously doesn't know how to read

[el_tejas_gringo]

And I never said I spend $1000 every two weeks. I said that I keep $1000 in my checking for a two week period. This acts as a security blanket. When I get paid, I have usually spent about $500-$600 dollars for that two week period, but I'm not going to just have $500-600 in my checking to where it gets to almost $0 per two weeks just in case something unexpected comes up. That's just asking to over draft my account and I don't want to have pay the penalty charges. Then at the end of that two week period and I get paid again, I set my checking back to $1000 and put the difference in an alternate account. It's not that hard of a concept to grasp.
Now I do appreciate those of you who have given advice without being condescending. I started this post to learn from where I may be going wrong, and to get a better plan of action.
However, for those who didn't take the time to read the posts that I posted trying to explain certain things and assume that they know everything about what I am spending my money on; well, the condescedation isn't appreciated.
Again, I really do appreciate the advice fellas. Thanks a lot!

[okrattler]

I don't think too many people do it this way but if I want something I'll set a goal to have in my bank account before I buy whatever it is I want. Lets say I want a gun that's $700. I might live pretty rough until I have $10,000 in my bank account that I have saved up. That's just an example of a goal I might set for myself. No breakfast,lunch or going out to eat. I only eat one meal a day and only put enough gas in my truck to get to and from work for the week. I won't buy anything unless it's a bottle of water or the occasional mountain dew or can of chew. On average I spend about $60 a week. Eat once a day,sleep,work,work overtime if I can and pray I don't get hurt bad enough that I have to go to the doctor and my truck will keep running. That's just the way I do things. I can do without a lot of things. Electricity,running water,hot water or air conditioner if I have to. Whatever it takes to get that bank account up.

Basically living like you're homeless and not having any sort of life is how you save money. Works for me anyways.

[ultralite09]

Getting a little off topic but not really, am I the only one that thinks if you cannot put 20% down and on a 15 year mortgage, youre buying too much house?

Im all for "investing" in a house but im 26 and in the VERY early stages of thinking about buying a house, seeing all these people im writing insurance policies for and how much theyre paying in PMI and fees/interest makes me sick thinking about it.

[ultralite09]

I don't think too many people do it this way but if I want something I'll set a goal to have in my bank account before I buy whatever it is I want. Lets say I want a gun that's $700. I might live pretty rough until I have $10,000 in my bank account. No breakfast,lunch or going out to eat. I only eat one meal a day and only put enough gas in my truck to get to and from work for the week. I won't buy anything unless it's a bottle of water or the occasional mountain dew or can of chew. On average I spend about $60 a week. Eat once a day,sleep,work,work overtime if I can and pray I don't get hurt bad enough that I have to go to the doctor and my truck will keep running. That's just the way I do things. I can do without a lot of things. Electricity,running water,hot water or air conditioner if I have to. Whatever it takes to get that bank account up.

Basically living like you're homeless and not having any sort of life is how you save money. Works for me anyways.

Well of course that works, in the end it comes down to the same basic principal of money out < money in.


If youre living like a homeless person just to keep money in the bank, are you really living?