Minorci

Hey Guys/Girls

Have been a terribly long time lurker on TFP. It is time i put a question out there as it's becoming apparent I'm not going to get out of the financial hole I am in.

Basically I have no money management skills, I'm practically living pay to pay and when important stuff arises (medical, veterinary, mechanic etc) I do not have the capital to pay for it.

I'm not horribly in debt, I have a 20 something thousand loan and a credit card with a 2k limit.

I earn money in the 50-60k bracket a year so its certainly not a problem wage wise.

I'm paying more than the default amount on the loan, credit card is going no where at the moment.

I just keep finding that I manage to spend all the money each fortnight.

What are some simple things i can do to improve my situation?

The_Jazz

Well, the very first thing that you should do is look at your income and expendatures. What are you spending money on every month besides debt management. Once you understand where you money is going, you can figure out what you can live without and prioritize the important things.

Three years after I got out of college, I was significantly more in debt than you seem to be due to some poor decisions financially and professionally. I finally sat down and figured out exactly where my money was going. By spending a month accounting for every dollar of income I had, I was able to figure out where the waste was. I ended up setting myself up on a pretty strict budget to allow myself to pay down my debts and still do the fun things.

You should also read this: Ask The Loan Officer NoSoup has a whole bunch of tips that are very useful.

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squeeeb

do what The Jazz said, make a list of all expenditures and figure where the money is going. when you see how much you spend on starbucks and eating out, you might think about making your own lunches.

one thing you can do is, every paycheck, automatically put a certain amount, maybe 10%, or $100, or whatever, away in an interest bearing savings account and DO NOT TOUCH IT. slowly build up a chunk of money that you can then use to make more money, either through investments or what have you. also, when your car breaks or you need to go to the hospital, you have the money there and don't have to get into more debt.

as for the credit cards, pay them off every month. if you carry a balance on them, the interest will grow and you will never get out of the debt hole.

you can live quite comfortably (depending on location of course) with 50-60k.

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onward to mayhem!

Minorci

Cheers,

Will see how it goes.

Cynthetiq

second the "Pay yourself first" rule.

It's important to set aside monies instantly.

You can also think of things in different ways, "Do I want this latte today or :insert object/goal here:?" Every penny and dollar helps. I cannot stress that enough.

good luck.

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thingstodo

Gee whiz. Common sense rules here.

If you want money left at the end of the month spend less than what you make. It's as simple as that. It is scary that you need advice with that concept if you make what you say you do. Do you really need someone to say that?

And pay a lot more on your credit card than the minumum due. 18% interest is vig in many places and you'll never get out fo debt paying vig and the minumum. That's how credit card companies stay in business - just like the mafia once did.

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Siege

Depending by how much you mean by "a lot more," this could actually be bad advice. Certain credit cards charge a fee if users maintain a high POSITIVE balance on their credit card .

As others have mentioned, list out what you spend so you can see where all your money is going. I started doing that in University simply because it's good practice. I make next to nothing each month (only a minor part time job) but I almost always come in saving a lot of money and overall i've saved closer to 30-40% of what i've made over these couple of years.

You'd be surprised where your money goes. After a couple of months I realized that I was eating out way too much.

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thingstodo

Uuh...I think you misunderstood. I mean pay a lot more on your balance. There is absolutely no benefit in maintaining a positive balance on a credit card. It's not what I meant at all.

If you owe, say, $5K, your minimum payment is probably around $100 or ~2% of the balance. Unfortunately, abut $75 of that $100 is interest. Even another loan, which you're paying 10-12% on unless you have outstanding credit means it's worth it to pay down the loan faster.

Interest is an expense - period. You can reduce the liability if you can offset the interest expense with a tax deduction but even then, it's an expense. If you want more money in your pocket, cut expenses.

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If you're wringing your hands you can't roll up your shirt sleeves.

Stangers have the best candy.

Plan9

"Idiots don't get credit cards... they get mayonnaise jars in the back yard." - some sitcom

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