Saving is Impossible

[anonymous_saver]

the 22k is gross, I take home about 1200/week. I am currently claiming 0 and I am anticipating on getting a decent amount back from taxes this year, as I did last year. I will use the tax returns this year to pay the CC off, and then roll those over to the loan.

As for the paper work to state what the pay levels are, I have been trying to get ahold of those for the last 6 months. HR will not respond to any of my questions because they know the situation and that it would be nothing but bad news for them. As for using the discount at best buy, I dont really buy that much stuff there. Maybe a DVD or two a month and not much else. As for about a year ago it was a different story, which is where most of my CC debt has come from.

First, don't claim 0 to get a refund. Getting a refund is not a good idea, that is money that you could have had throughout the year (and you may not have needed to use your credit cards in the first place). Change it to at least 1 allowance, using this calculator is quite helpful as well. IRS Withholding Calculator

Also call HR daily if that's what it takes, $4,000 is a huge deal! Make sure you have all of your paystubs and documentation ready to go, when you do get the attention you deserve. Also, call the Better Business Bureau US National BBB.org: Home and put a report in, and tell HR that you did so, that will likely get their attention.

Also, count all expenses that you have (gas, groceries, random spending, etc.). I know that one year I made $16,000 and was able to put $4,000 into an IRA and pay for a large vet bill of about $1,800. It can be done, you don't have much debt. Stop spending money on everything except bills, groceries, and necessities only for lets say 3 months, and I almost guarantee you that your credit cards will be paid off by then. Especially with the extra cash of your extra job.

By the way do you have a land line and a cell phone, if you do, get rid of one to save money. Also, find out the interest rate on your school loan as soon as possible. Could you sell your car and take public transit? I love taking the bus, it is so cheap! Plus, with a low income like yours, is it really worth it to work, just to have a car?

If at the very minimum you make $1,200 a month, your bills add up to an average of $717.50. That leaves you with $482.50. Lets say you spend $150/month on food, and another $30/month on necessities (shampoo, toilet paper, etc.). Let's also say you spend $120 on gas a month. That adds up to $300 more in expenses. You would be left with $182.50, which would pay off one of your credit cards in one month.

Once you pay off your credit card bill, save up an emergency fund of about $1,000. And then put extra money towards your student loan. Once you are at this place, I would start looking at other ways for you save (for a larger emergency fund, down payment, etc.).

Do you contribute up to the match in any employer retirement plans you have offered to you? This should be the first thing you do, even before paying this debt off.

You can do this! I would love to hear how it turns out for you. I know how hard it can be. To be honest, I still live as if I make $16,000 while I am saving for a downpayment and I am happy as can be!

Again, good luck.

[anonymous_saver]

Also, since your credit cards are at the same rate, pay off the smaller balance first, since that will have a nice psychological effeect.

[kacedog51]

I hear that you have anger at your employer and that is keeping you from seeking full time employment from them. The only one hurting from the situation is you!! You are punishing yourself by not working full time and taking the benfits for what reason?

Best Buy is my 2nd job, I did work full time for them for just over a year. Currently I am employed full time through a Temp Agency and hopefully about to get hired on full time at the position I am in which includes benefits.

[disneysteve]

Best Buy is my 2nd job, I did work full time for them for just over a year. Currently I am employed full time through a Temp Agency

You have a full time job through the agency and a part time job with Best Buy and you earn 22K total? What type of work is your full time job? That just sounds really low to me working 2 jobs. My wife worked at a retail store (sporting goods chain) over 12 years ago and made about that much then at the one job.

[weissheit]

Kacedog51,

Hi, I've not read the posts except your initial post. All I can say is that just many others you have to start somewhere, and the sooner the better. I'd pay down debt as quickly as possible, cut costs where ever you can (dining out vs eating in and purchasing store brands/specials etc.) If you have the time I'd get a second/part time job. Automatic savings plans will make saving more seamless. Its not going to happen overnight but with each iincremental increase in savings and reduction in debt facilitating by cutting/managing costs and increasing cash inputs will come a better level of comfort and understanding of finances. Fiscal discipline is the key. If you can get savings into a Traditional IRA that would be great. Sooner or later you will then start to be able to exploit financial opportunities.

I started out of college in 1994 with 20K in student loans, 5k at 10% for my car VW Fox, and 6k on credit cards. My pay was at ~30k. I just continued to live like a student for several years, pay raises, bonuses, tax refunds and other windfalls went into the bank. I started my IRA that year because I know I would get a bigger tax return that could then be used to further pay down my debt. Coupon clipping, rebates, discount shopping, freebies became ingrained into my shopping routine. The word "NO" kept me from buying a new car, the latest gadget and expensive meals and coffee every day. Making double payments on the highest interest debt became routine. As soon as I retired one debt, the amount of that payment was tacked onto the next highest interest debt. I established a rainy day fund which absorbed the set backs, but sooner or later they were easily abated by fiscal prudence. After ~ 4 years my credit cards were paid off and I've never carried a balance since then. My student loans were paid off. I sold the VW for a modest profit, and picked up a stripped down 5 spd manual Geo prizm from the previous model year maximizing GM rebates in addition to getting a better price from the Toyota version (Corolla) that sold for over a thousand more and at a super low interest rate. I had 10k+ in my IRA and money in the bank and actually qualifed for a mortgage on a place of my own.

However, if I had said "Saving is Impossible" when I graduated in 1994 then four years later in 1998 I would have never gotten anywhere despite probably making the same amount of money over the same time period.

The issue is this, money does not matter, its what you do with it that does and if you want to have some level of financial freedom then you must start somewhere and have some hard discipline and stick to it. I could not see the light at the end of the tunnel when I first started, but I knew if I just stuck with it and kept up my fiscally prudent habits then sooner or later things would break my way financially. I hope this helps you see how you can do the same. Good Luck.

[Staceyy]

If you don't have much, do something no matter how small. I lost a 6 figure job a couple of years ago and have not worked since. Where I used to be able to save $20,000 in a six month period, I now was finding it hard to save $20 in the same period of time. Imagine. I felt I had to do something no matter how small, or things would never get any better for me. So I started doing small things consistently. I started saving my leftover change and after a year, I had saved $500. I started stockpiling food by buying a bag of beans for $1.00 each time I went grocery shopping and would throw them in the back of my cupboard. Overtime I increased the variety of my stockpile and the amount I would buy, stocking up on sale items. The 10 for $10 specials really helped. I also started clipping coupons, and saving airline, hotel points etc. I recently traded some of my points for $400 in Macy's gift cards which I used for clothing. During all of this, my dh had a decent job and picked up the slack for us. Over time, he received a couple of raises, we practiced frugality and lowered many of our expenses and certain bills such as the car note got paid off and eliminated from the budget. We are going into a recession and we now have about a years worth of food stockpiled, a small emergency fund plus we continued all along to build dh's 401k fund. We use accumulated points to buy our clothing. We are now feeling more secure. The lessons we learned are that small things done consistently over time can have big accumulative results. Think of the power of compounding. Also do something no matter how small. You have to start digging yourself out of your hole even a tiny shovel full at a time or you'll never get out.

[billchrz]

Since your minimums for the CC's are only

$10 each. I suggest that you pay the minimum on the card with the larger balance and put everything else extra to pay off the smaller card. Once done with the smaller card, concentrate on the larger card.

[anonymous_saver]

Do you enjoy your job that you make $22,000 a year? If not, I would think of other options. Are you using what you learned in school at your job?

One last suggestion that I have is sell your old books/textbooks online. I recently did this and have received almost $700 in 4 months. That's a lot of extra cash.

[kacedog51]

I dont necessarily enjoy the position I'm in at my job, but I have my foot in the door of a really big company with a lot of room for growth. A lot of opportunities will present themself in the future and this company has really good benifits, but as of right now I'm a temp, hopefully soon to be hired on as 9 positions are open. It does not put my schooling to use as I went to school for mobile electronics, but my second job(my old full time job) does put that schooling to use, but I dont enjoy it and I guess it was just wasted money. So hopefully soon my insurance situation will be solved, and maybe making some more money. I am going to use my tax returns to pay off the credit cards, and then I will be making larger payments on my student loans. I am starting to put away 10% of my check each month to build an EF. Thank you for the advice you have given me, I really appreciate it and it has given me a solid starting point!

[gekkoplus]

Open a free checking account in a couple of banks which offer $200/$100/$50 bonus. You can pay off your credit card debt right away.

For information about which banks offer such bonuses, there is thread somewhere in this forum with an up to date information. Also you can search "bank deals" on google and get the same info in seconds.

My $0.02.

[Ima saver]

I agree with Disney Steve. I have lived my whole life without a cell phone or a DVD. Not trying to pick on you, but you can save a few dollars a month by not buying wants for a while.

[Aleta]

First of all, I would like to commend you at your age for what you are doing. I think that is great. I would remind you that Rome wasn't built in a day. When We were getting out of debt, it became our main focus and we were determined to do whatever we could think of to get out of debt. We didn't even go to a McDonald's for 3 monthis. The time we went, we shared a BigMac and fries. We could only save $5. at a time, but it was mainly about getting into the habit of saving and yes we contributed to our IRA's but not as much as we were allowed.

I can remember wanting something and that my birthday was coming up, so I mentioned the item to my Mom and I got it for my birthday. There could be CD's that others could give you as gifts for your birthday or the holidays. All of this must seem overwhelming to you, but know that we all were where you were once. Actually, your debt is not that bad. If you continue to read the blogs, the numbers will make you stagger and yet these people have dug themselves out of the hole.

You haven't mentioned whether you eat out everyday or not. I just assume that you do. Eating out eats a huge whole in your budget. Minimizing your driving time helps also. Using coupons is a big help. Alot of us do surveys here and a small as they are, it helps.

Definitely change your withholding amounts and use that money to pay off your debts. You're paying over 25%. and that's horible. If you can save up to $250., you can open up a savings account online with INGDirect and they will give you $25. There are links on this website from Jeffrey to do that. As others have said, get a notebook and start writing down all of your expenses. As David Bach, a financial planner explains about the LATTE FACTOR, ($3. a day for coffee, times 5 days a week, times 52 weeks a year ends up to$780.00 a year. It add up. There are alot of great ideas on this forum. Keep on reading to see how others come up with ideas to save. It's easier than you think especially with your food, gas and other miscellaneious items that you buy.

PS I can remember my husband and I selling alumimum to have extra money to pay on debt.

[Ima saver]

You can do it! I never made over $8000 a year and I always managed to save 10% of it every payday. I have a pretty good emergency fund built up too!!

[Mikeee]

Yup pay off those credit cards!

Also, since your credit cards are at the same rate, pay off the smaller balance first, since that will have a nice psychological effeect.

I concur.

I also would drop the cell phone and go with land line. This may not be hip enough?

Best of Luck

[Mikeee]

Saving is Impossible

Change that thought to:

Saving is Possible