I am a 41 year-old single Dad who is broke...help!

[ROC73]

Hi...

I am a single (divorced dad) with one child.

I live paycheck to paycheck and have virtually nothing in savings or retirement.

Basically, I am screwed.

I take home (after taxes) $36,140, which is roughly $2780/month.

I need advice on how to save...because I am ALWAYS broke.

Here are my monthly bills:

$950 rent
$440 child support
$150 Verizon iPhone
$220 Comcast Xfinity
$84 GEICO insurance
$140 school loan (24k total remains)
$60 gas
$200 groceries (sometimes Trader Joes, sometimes Aldi)
$50 electricity
$25 dry cleaning

TOTAL=$2319

That leaves approx. $461/month that quite honestly I cannot account for...various expenses, but to actually articulate them is difficult to be perfectly honest.

So does anyone have any tips on how to save and save for retirement? ANY advice is appreciated.

Thank you.

[bjl584]

I'd start by figuring out where the $461 is going.

Next I'd drop the cell phone and cable plans. Get a cheap prepaid phone and get a set of rabbit ears for tv. You can get internet only if you need it. That will save you $370 right there.

Can you do something about rent? Take in a room mate? Move to a cheaper place?

Can you pick up a part time job to boost income?

Do you really need dry cleaning?

I'd shop around for car insurance. $84 isn't bad, but you might be able to do better elsewhere.

That's a good start.

[ROC73]

OK, thank you...in terms of retirement savings, I just started a 403(b) savings where they take 3% of my pay and match it each paycheck. But I am literally just starting.

At this rate, will I have to work until I am 150 years old??

[Petunia 100]

OK, thank you...in terms of retirement savings, I just started a 403(b) savings where they take 3% of my pay and match it each paycheck. But I am literally just starting.

At this rate, will I have to work until I am 150 years old??

This is a start, but you already know it is not enough to secure a comfortable retirement. How are you investing your 403b monies?

You need some emergency cash. Open an online savings account and set up automatic transfers from your checking account. Set them up to happen immediately after payday. For a lot of people, saving first is key. If you try to save what is left at the end of a pay period, you will never save anything. Start small if necessary.

Start tracking your spending. Some people like Mint. I like to put all purchases on my rewards credit card, it makes tracking so easy. The rewards also make a nice little income stream which can be saved.

At some point in the future, your child support payments will end. Plan to shovel 100% of that money into retirement savings. The impact on your retirement nest egg will be huge.

You don't have any debt? That is awesome. Despite your lack of savings, you aren't in horrible shape.

I'm a divorced mother of two, so I understand the challenges single parents often face. Best of luck to you.

[autoxer]

OK, thank you...in terms of retirement savings, I just started a 403(b) savings where they take 3% of my pay and match it each paycheck. But I am literally just starting.

At this rate, will I have to work until I am 150 years old??

Yes, if you only save 3%, you may never reach financial independence. The good thing about looking at where your money is going, is that you can decide if it is in line with your values. You are paying 7.3% of your income to Comcast. Is what you are getting from them worth more than the financial independence to stop working at some point?

You also have 15.3% of your income that is unaccounted for. Surely you can start tracking your spending so that you can decide if those purchases are more important than your future.

Besides comcast, there is a lot of potential savings with your cell phone plan, but you have to be willing to adjust your habits. You could consider one of the lower cost providers like Ting or Republic Wireless. You can also figure out how to reduce your plan, only use data over wifi, make sure you don't go over your minutes, etc.

Is the school loan your only debt?

[Bob B.]

$950 rent
$440 child support
$150 Verizon iPhone
$220 Comcast Xfinity
$84 GEICO insurance
$140 school loan (24k total remains)
$60 gas
$200 groceries (sometimes Trader Joes, sometimes Aldi)
$50 electricity
$25 dry cleaning

TOTAL=$2319

That leaves approx. $461/month that quite honestly I cannot account for...various expenses, but to actually articulate them is difficult to be perfectly honest.

I'm exactly the same age as you are. I was always broke four years ago. I started posting to this forum, followed most of the advice, and I am in much better financial shape now.

The first thing I did was cut my satellite TV service. My plan was to get it back once I had things turned around financially. I have things turned around financially now, and I still don't have satellite TV again yet. I'd like to have it, but have decided it's still not a priority compared to other things like retirement savings, and college savings for my kids.

It's really need vs. want. I want my satellite TV service, but I don't need it. I miss my satellite TV service, but other things are more important.

I also agree that you need to account for that $461. But, while you're accounting for it over the next several months, again, as you buy things here and there, ask yourself if you really need it, or just want it. Curb spending for wants. I would bet a lot of that spending is wants. $461 per month is about $15 per day. Can you cut out $7, or $8, or $10 per day of that spending?

This is going to hurt a lot until you get things turned around. Then, I would bet, if you're like me, you won't miss those extras so much once things are turned around.

Good Luck!

[ROC73]

Yes, if you only save 3%, you may never reach financial independence. The good thing about looking at where your money is going, is that you can decide if it is in line with your values. You are paying 7.3% of your income to Comcast. Is what you are getting from them worth more than the financial independence to stop working at some point?

You also have 15.3% of your income that is unaccounted for. Surely you can start tracking your spending so that you can decide if those purchases are more important than your future.

Besides comcast, there is a lot of potential savings with your cell phone plan, but you have to be willing to adjust your habits. You could consider one of the lower cost providers like Ting or Republic Wireless. You can also figure out how to reduce your plan, only use data over wifi, make sure you don't go over your minutes, etc.

Is the school loan your only debt?

Yes, that is my only debt. No car loans, no mortgage (I rent), and no credit card debt.

[ROC73]

Yes, if you only save 3%, you may never reach financial independence. The good thing about looking at where your money is going, is that you can decide if it is in line with your values. You are paying 7.3% of your income to Comcast. Is what you are getting from them worth more than the financial independence to stop working at some point?

You also have 15.3% of your income that is unaccounted for. Surely you can start tracking your spending so that you can decide if those purchases are more important than your future.

Besides comcast, there is a lot of potential savings with your cell phone plan, but you have to be willing to adjust your habits. You could consider one of the lower cost providers like Ting or Republic Wireless. You can also figure out how to reduce your plan, only use data over wifi, make sure you don't go over your minutes, etc.

Is the school loan your only debt?

Wow--when you break it down by percentages, it changes my perspective on things. I am going to use the app MINT as well to track expenses.

[JulieAlbright]

Hi Roc73

The great thing about your post is (although I'm sure you feel more worry than great at the moment) is that when you see a budget with two such obvious things which can be cut and/or drastically decreased -- it's like you can make a change which will make a big impact immediately.

Like some of the previous posts mentioned, your cell phone and your cable bills are really high. Believe me, you can have phone service and entertainment for much, much cheaper.

Just to show you, if you could cut those costs and instead put even $250 dollars (not even the most drastic cut you can make) toward an investment account for 25 years (into your 60's) at a 7% return that would give you almost $200,000 toward your retirement.

Then as others have said, you have even more money that you just need to figure out where you are spending it every month. Don't worry, nearly everybody discovers they have "evaporated money" when they first start trying to budget. If you can find a way to cut another $250 a month out of your spending, then you are up to $400,000.

You'll also likely find that success breeds success. Most people when they get on the road of "Oh, I"m going to accumulate over $400,000" start to find even more ways to make and save money and then they start to figure out how to take advantage of tax deferred or other types of savings.

So no, it isn't hopeless at all. From what I can see from your brief message, it is quite doable.

Best of luck to you.

[ROC73]

So I canceled cable and internet. That's $190/month right there I'm saving.

I want to switch from Verizon to Smart Talk. THA would drop my phone bill from $150/month to $40/month.

But.......I'd love to get some sort of cheap Internet. Any suggestions?

(I don't qualify for cheap Internet programs that check to see if my kid is on school lunch program. For starters, my ex-wife is loaded and I don't qualify because I just had Comcast within the past 90 days)

[autoxer]

Wow, you are wasting no time to make changes! It's also great that you have avoided running up credit card debt. You are going to make tons of progress in no time. What is the interest rate on your student loans?

For internet, the options are very location dependent, I choose RCN, but they only cover a few cities.

Regarding the dry cleaning, do the clothes really need to be dry cleaned? I tend to avoid buying anything that can't go in a regular washing machine.

[Reggie]

With no debt and the desire to want to change, you are actually in pretty good shape! Many people your age have tens of thousands in debt. Your hole is much smaller!!!

Can you bring in a little extra cash each month from part time work when you don't have the kids? All of the extra could help you build a savings and allow you to increase your retirement savings at work.

[TBH]

Great job reducing your bills on day one!

Now, quick, before that money disappears, set up an auto-deposit to put it into a savings account so you can start building up some emergency savings. That is for real emergencies--job loss, medical emergency, that kind of thing.

Hang out here and you'll be doing much better in no time. I can't wait to see where you are six months from now.

[Goldy]

So I canceled cable and internet. That's $190/month right there I'm saving.

I want to switch from Verizon to Smart Talk. THA would drop my phone bill from $150/month to $40/month.

But.......I'd love to get some sort of cheap Internet. Any suggestions?

(I don't qualify for cheap Internet programs that check to see if my kid is on school lunch program. For starters, my ex-wife is loaded and I don't qualify because I just had Comcast within the past 90 days)

I have had good luck with Century link and only pay 25 bucks a month. Its a promo rate but once it comes up I just call and they reset it back to 25. Been doing this for over 3 years now.

[ROC73]

Great job reducing your bills on day one!

Now, quick, before that money disappears, set up an auto-deposit to put it into a savings account so you can start building up some emergency savings. That is for real emergencies--job loss, medical emergency, that kind of thing.

Hang out here and you'll be doing much better in no time. I can't wait to see where you are six months from now.

OK. I will start building the "rainy day fund". I am also confused/worried about my actual "retirement" savings (or lack thereof). I am putting the max allowed (3%?) into the 403(b) plan (I am a teacher at a Catholic school, and the school matches...so it is like 6%).

I picked a pretty "aggressive" portfolio, because I need growth right now versus income. I know it's a bit risky, but I am desperate.

I will check Century Link internet...I was going to use my iPhone as a WIFI device, but it is $30/month....that would bump my cell phone plan to $180/month.

If I go to Smart Talk for my cell phone provider, I will pay $30-40/month...Century Link internet is $25/month...so I come out WAAAAY ahead!

Hey, this savings stuff is easy....if you use your head!

THANK YOU for all of the responses...they have been EXTREMELY helpful!!!!!!!

I will be posting here frequently.