Attempting to budget..harder than I thought.

[misscity]

Hi, new here so appreciate your time and feedback.

I live in an extremely expensive area and not making a whole lot of $$$. I'm making about 50k a year, single, no kids, no mortgage. After paying my fixed expenses, I was freely using my credit card for gas, restaurants, eating out, going out, shopping etc which usually was $1000 a month. I was not saving much, couple hundred here and there. Sometimes something would come up and then i'd have to spend that for the unforeseen expense. I realize this is not the best way to blow all of my money and with the current times, I need to prepare for anything that can happen even though my job is semi secure. Maybe one of your trained eyes can let me know if i'm doing this right? Thanks again in advance.

I have a credit card balance on a 0% card for $1200. I'll probably be getting a tax refund of that amount and will be paying that off. I have no student loans or any other debt than my $8000 left on my car. I only have a little over $1100 saved up.

Income per month: $2900

Rent: $975
Car: $325
Cell: $70
Electric: $30
Renters Ins: $15
Cable/net: $80

This brings me to $1500 in fixed expenses with $1400 remaining.

Starting this month, I have started the following when it comes to reducing that $1000 monthly discretionary spending:

$100 per week, $400 a month
Per week-
-$20 for gas
-$25 for groceries
-$55 for lunch or a dinner, a coffee, personal item need like shampoo or aspirin or anything

Once I ran out of of the $100, my weekly spending is over.

That leaves me with $1000 left over. However, I can't save that all together. I'll probably be needing $ for things like getting my taxes done, a couple hundred in a balance for when I get some cavities filled not covered by my insurance, etc etc. So i'm sure i'll have a $300 credit card bill due next month which only leaves me with $700. I feel as though that's not enough $$ to be saving each month. Or maybe it is given my income?

My question to you, based on my income and expenses, what should be discretionary spending amounts per week and how much should I set aside incase I do have a credit card bill?

My long term goals are to save atleast $5000 (starting small) for emergencies and start funding an IRA since I have no retirement or 401k through work.

-G

[whitestripe]

first of all, you should probably start off by setting yourself up an emergency fund. this will cover you so you DONT have to have a credit card bill that is unforseen.
our emergency fund is used for car repairs, house repairs, dentist, broken appliances, even travel or hotel hire if its needed etc. our current aim is to have 3 months of expenses, and then our final goal is 6 months of expenses. but like i said, our emergency fund is for emergencies - so whatever we deem an emergency then we know that the funds are available to us to use.

currently my DF and I are on 10% of our weekly take home pay for our 'fun money'. with that, we use for alcohol (DF) makeup (myself) dining out, entertainment, clothes, books etc.

i dont really have an 'amount' you should be saving, but my advice is to have goals planned out. it makes it easier to focus. for instance, are you wanting to buy a house? are you wanting to take a holiday?
personally our savings goals are currently building our emergency fund, saving for spa installation, and paying as much as we can into our mortgage.

[maat55]

The best way I found to achieve a goal is to make it your top priority. I would scrimp on every catagory to do this. I would set a number that is going to achieve that goal.

If you run your finances like a business and prioritize a goal that has to be met, you will find a way to do it.

Consider 700.00 your bottom savings/debt redution and find more. 8400.00 per year will achieve alot.

[Pitman]

Step 1: Pay off your CC Debt asap
Step 2: Save up an 8 month Emergency fund

[ishanbansal]

Auto Insurance is a recurring monthly expense. So, any reduction in the cost of Auto Insurance would keep giving some extra bucks month after month. So, I am visiting this topic in this article, to help you manage your Auto Insurance better, and Save Few Bucks.

The price of Auto Insurance is greatly determined by the kind of coverage that are chosen. Most of the times, people are not aware about the right limits of coverage that have to be chosen for Auto Insurance. As a result, they end up paying a lot more than what they could have been paying with right coverage limits.

[tripods68]

I agree with Pittman....you need to pay down debt. Once that is accomplished start saving building EF at least 6 months cushion in case for any type of emergency.

[jIM_Ohio]

Originally Posted by misscity

I'm making about 50k a year, single, no kids, no mortgage. After paying my fixed expenses, I was freely using my credit card for gas, restaurants, eating out, going out, shopping etc which usually was $1000 a month.

I have a credit card balance on a 0% card for $1200. I'll probably be getting a tax refund of that amount and will be paying that off. I have no student loans or any other debt than my $8000 left on my car. I only have a little over $1100 saved up.

Income per month: $2900

Rent: $975
Car: $325
Cell: $70
Electric: $30
Renters Ins: $15
Cable/net: $80

This brings me to $1500 in fixed expenses with $1400 remaining.

Starting this month, I have started the following when it comes to reducing that $1000 monthly discretionary spending:

$100 per week, $400 a month
Per week-
-$20 for gas
-$25 for groceries
-$55 for lunch or a dinner, a coffee, personal item need like shampoo or aspirin or anything

Once I ran out of of the $100, my weekly spending is over.

That leaves me with $1000 left over. However, I can't save that all together.

Your preliminary steps have been real good.

You know your expenses.
You know your income.
You know what is left.

The most important thing is to automate your savings as much as possible, and give yourself time.

Step 1- take the current savings and pay off the cc. Don't even read step 2, pay off the cc now.
Step 2- set up some accounts to capture as much of the $1000 as reasonable. The $1000 is about 25% of your take home, right? What is this relative to gross pay (guessing about 16%).

Put $750/month into an IRA or 401k. You will save considerably on taxes if you use a traditional IRA or 401k. Meaning $750 going in might only lower take home pay by $600.
Put $250/month into a savings account.

Important- make sure you put $250 into savings the day you get paid (either through direct deposit or transfer). let that $250 start accumulating for those dental bills, car repairs and whatever other things tend to pop up- this becomes your emergency fund.

If I figured this right, you will be putting about 5% into savings and about 10-15% into a retirement account.

If you give this time- 10 months- you should see a significant amount set aside in both accounts. If you get a raise, make sure you save 20% of it, then allow the rest to be spent.

Don't save "what is left" after bills are paid... save first- before any bills are paid.

That simple change in thinking should help you.