@iced wrote:
@Anonymous wrote:I am 20 years old and have a good job for my age. I am a college student, and still live at home. i do have a problem with learning how to balance my budgets and saving my money. I need more help trying to. I feel like credit cards get in my way, but I now have paid down all of my balances to 0 and feel really good about it but I feel like it has drained me. Any advice on how to save more money?
I make like 28,000 a year, and only have to pay for gas and phone bill so I am extremely lucky. I am now more relying on my debit card then credit cards and I think that is starting to help me out a lot.
Thanks in advance for the replies.
- In the 30s, a saying became popular: "use it up, wear it out, make it do or do without." This is still good advice today. People are quick to replace items before they're really worn out, and those costs add up. People trade in 3 year old cars for a newer model rather than driving them until the wheels fall off. People buy more food than they need and throw away the excess when it spoils, or even before it spoils. Simply being more efficient with what you buy and use will save a ton of money just by itself.
- A person can live comfortably in 300 square feet of house, two people can live comfortably in 600 square feet of house, and so on. Children under 5 count as 0 for this (that is, 2 adults and a baby can live in 600 square feet). This is particularly true where I live, but it applies elsewhere as well. People turn their noses at smaller homes and end up spending every penny they have on a bigger home because they think they need a big house with an "open concept" kitchen and stainless steel appliances and all that other HGTV garbage. It's gotten in their heads, which is a good segueway to...
- Realize just how hostile marketing, consumerism, and competition are to living within one's means. Don't watch ads, or at least don't act on them. Don't let emotion get in the way (marketing loves to goad or guilt you into buying things). The world wants to take your money; don't let it.
Once you are living beneath your means and saving money, be proud of it. People will question why you have money in the bank but don't have a fancy house or car or clothing. Those people are called idiots and you shouldn't listen to them.
People buying too much house is a HUGE reason they get into financial trouble. My wife has the same tastes in houses as you described above, but thankfully she's also financially frugal. We are looking at moving in the next year or two, and she keeps showing me all these expensive houses with huge kitchens and giant master bedrooms, and then I work out the numbers, and say "Well, even with a loan requiring only 5% down, we'd have to come up with $20,000 cash AND would have loan payments somewhere around $2,000 a month. Can we afford it? Technically, yes... but I've finally gotten away from living paycheck to paycheck with less than 3 months of emergency funds, and I DON'T want to go back there!
I don't think its necessarily bad to trade in used cards for something new - that's how people with less money get quality used cars to purchase. The problem comes in when people put $1,000 on their car, then trade it in three years later and have to PAY at the trade in because they are upside down in the loan.
To your last point, I know exactly that feeling... Since I graduated from my paycheck-to-paycheck with no savings life, I still don't go on vacations nearly as much as people who have less money than I do, and I am perfectly happy going to the family cabin in Northern Wisconsin. I don't need to go to the Bahamas for Florida every year.