[USER]

I have been living paycheck to paycheck and it seems like I’m going to work just to pay bills. I am making over $80k and contributing 8% towards my retirement.

I feel that I don’t see my paycheck because of all the taxes that come out between federal, state taxes, and Medicare.

I feels impossible to “pay myself” or save because of bills and inflation.

Even when I work overtime, it doesn’t seem like I see what I have made extra.

I don’t have any children. I’m prioritizing pay down credit card debt and have been paying my student loans. I also have a car note.

Any words of encouragment or advice would be appreciated.

[Leslie]

When we were in the stage of paying off debt, I made a huge wall thermometer and colored it in as we inched toward zero.

Having the visual reminder of what we had really accomplished was encouraging in the years where our bank account was just a revolving door to pay the bills.

Stick with it! It’s worth it!

[Anthony]

You have to nail down where your money is going…. Often times people neglect the quick trips to gas station for snacks or their streaming services.

Load your accounts on empower and track every transaction

[Kris]

Once you no longer have debt you’ll be able to pay yourself. I’d also go through the last 3 months of income and spending and identify all the areas that you can possibly cut back.

[Amy]

Are you doing traditional or Roth? Maybe do traditional and your paycheck will be bigger because it will be pre taxed money.

I’m also a social worker and for several years as I was paying off student debt I worked at Macy’s during Xmas for extra money.

It didn’t interfere with my regular job and it was fun to be in holiday spirit.

Good luck!

[Tony]

The saving doesn’t start till the debt gets paid off and don’t add to it. Wins are not made in your situation in big ways it’s all the small ways that add up.

I’m going to be honest with you Go open up whatever you use to pay your bills or daily credit card debit card whatever…

How many coffees are there how many eating out are there how many TV services are there?

As you’re paying off debt the big wins are the small cutbacks.

Maybe you make your coffee in the morning before you leave so you don’t have to buy it while you’re out seems stupid over a $1 or $2 coffee but it makes all the difference in the world in the situation you’re in.

Once you pay off that debt and make sure you don’t make new debt then the saving power really begins and it will go really fast…

Add up how much money goes up to pay debt take that and put it in any investment calculator getting 8% return and watch how it grows it’ll blow your mind

[Elizabeth]

If you have cc debt, I assume interest rate is super high. May be worth suspending retirement savings for a short time or just save max at company match and use extra to pay off cc’s asap, and then do not ever hold a balance.

I’m making some assumptions so dependent on your situation.

Or continue contributing and take a loan from 401k if you have one (assuming again that that is the retirement vehicle) to pay off cc’s. It all depends on interest rates. Good luck

[Arienna]

Getting back to the student mindset on how you lived can help. When I was in school, I had a not so great apartment, ate spaghetti (because no one can make enough for just one person, one meal- whole pot for the win) with ground turkey instead of beef due to cost, and spent like I had only $50/week (close to true).

Did that for years and lived on $7000 a year not including rent.

When I got out of school, my attitude changed and I told myself I deserved to splurge because of all the sacrifices I did.

Started spending all I made without fully realizing where my money went (I didn’t do expensive coffees or streaming services) but bought Tide instead of All or another generic because I was a doctor now and can afford it.

Wasn’t making any savings progress due to those little choices.

Needed to save up for a big purchase so went back to student life.

I learned to also buy only as much as I would actually consume so less waste and, without realizing it, I followed Brad’s suggestion of $2/per person/ per meal.

It became more of a game. I also earned $80k/yr and was able to save $40k after I changed my mindset and I lived in a MCOL area.

I still did fun stuff with friends, just didn’t go to the expensive places or buy expensive things that I really didn’t need.

Learned how to be a minimalist and now I love that I am (my house isn’t super crowded with worthless things)

[Susan]

Pay attention to politics. Get involved with candidates who can balance financial equity and end the class warfare we are in the midst of.

The middle class was eroded by failed trickle down economics gimmick.

The tax code, beyond favoring the rich, creates larger margins of poverty and working poor.

Push for more public transportation policy.

My daughter lives in Chicago and saved half of take home for 9 years because of not owning a car and associated insurance, two parking fees, etc.

She estimated she saved $1000 a month on that end. She grinded at an entry level job at a downtown firm and paid off student loan balance with one check because she hates debt.

The pandemic helped her save $45,000 by returning home for 10 months without paying Chicago rents.

That was unexpected in her planning, but she turned lemons into lemonade.

With student debt gone, she could have paid her brand new car last week in cash but chose to negotiate a sweet loan deal.

We coached her to low ball sale price of last years model, then when salesman comes to the desk last minute change to lease option.

Making sure pay off amount is what she expected, she leases for 3 years then gets new car at original sales price in the end.

She’ll bank that money for 3 in secure investment expecting 8-10% return.

The car she bought should last 20 yr 300,000 miles. She very good with $, unlike her parents.

We learned financial literacy late in our 30s. By the way, her salary started at 68K at age 23.

She’s had two raises in 7 years and now is upper 90s. She started with 3 roommates. 2 yrs later just 1 roommate.

After pandemic she afforded her own studio. Now with fiancé in new high rise.

On all Chicago rents. Her financial literacy astounds me.

And yet she still doesn’t know how to fill out a hand written check. You can do it.

My husband and I figure out how to play the anti consumerism game, because that’s what politics is all about.

[Tammy]

If you get a huge tax return change your deductions so you have more money coming in now.

Also when you go to store. NEEDS only. That goes for food.

Trim your budget and your diet and it’ll all add up.

You are saving to retirement so good job in that.

[Lisa]

Are you tracking your net worth? If not, it’s hard to see progress. If you track, you will see your progress that way.

Your retirement account will grow and the debt will go down increasing your overall wealth.

[Juliett]

I‘d review your budget. What are you blowing your money on?
And stop using your cards asap.

[Michelle]

Here’s a little encouragement. It took me FIFTEEN YEARS to get to my first 100K in retirement.

I’m now at 1.1M and the most recent 100K only took 6 months…AND I raided my accounts to the tune of 42K in that 6 months for house maintenance, so it was really even quicker.

Debt can be crippling. I went back into it this after 20 years of nothing but the mortgage and it has really slowed me down.

Definitely focus on not only getting rid of that, but vowing to stay away from it going forward as well.

[Stef]

It sounds like you’re on the right track for paying things off. It takes time.

Holidays are coming up, can you add a part time seasonal job and devote your compensation solely to credit card debt?

[Aimée]

I feel you on this. Stuff is expensive and it feels like a hole you will never get out of.

I personally think Dave Ramsey has a good overall approach, but I don’t like his method of budgeting.

I use YNAB (You Need a Budget). It does cost like $120 a year but it is so worth it.

You budget only the money that is in your account TODAY (not the entire month like Dave does).

It was helpful to me to see $2,000 and ask myself “what do I need this $2,000 to do right now?”

It helped me to feel less like a failure when prioritizing my debt pay off.

Let me know if you have questions about YNAB at all!

[Author]

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