Personal Monthly Budget--ADVICE NEEDED

**lorraineb** · 04-08-2013, 02:07 PM

Step one: Pay off the credit card and make sure not to place any more money on it that you can't pay in full each month.

Step two: Create an emergency fund with at least $1000 (and ultimately $15k -- 6 months of living expenses)

Once you have the credit card paid off and the $1k emergency fund, then you can start thinking about the next steps -- personal finance is a baby step game and you don't want to get too far ahead of yourself. get those two things done and then come back with your newest info and we can help with the next steps after that.

**sblatner** · 04-08-2013, 04:02 PM

Step One - pay off the credit card and never carry a balance again.

Step Two - Save, save, save in non-retirement accounts. Save for a car, save for a condo, save to pay off your student loans. You are going to need liquid cash.

It'll help once you know what happens after you graduate but for now, I would build up cash. Just in a bank account til you get another job.

**mgkimsal** · 04-08-2013, 06:34 PM

Agreed with the others - pay off the CC, and don't use it again. You've got $500 in balance on there, but you've got $750 left over each month. There's probably nothing vital you put on that credit card - keep it that way.

Over the next several months just sock away as much cash as possible. With your budget, you should be able to have $4k saved up over the next 6 months without much struggle. If you were able to take on some side work, or sell some stuff (though it doesn't sound like you have too many 'things' with you right now), you might be able to make it $5k.

That's certainly a great start on an emergency fund, and you can then start dealing with student debt as it comes due, without as much stress as you'd have if, when it comes due, you still only have $176 in savings.

Things to think about - could you possibly lower your insurance premiums by changing carriers or increasing your deductible. I remember my brother had premiums of something like ... $70/month when he was your age, although it wasn't in DC, so perhaps that's a non-starter. If you're relatively healthy, you may want to consider seeing if you can get that number lower, to increase your socking-away-for-an-EF money.

IMO, you need some goal to be working towards - just having spare cash without a goal means you'll likely fritter it away. Frittering is probably necessary for some people, but not all of it. If that's you, budget your 'blow' money to something that won't break the bank, and still give you a big enough chunk to throw at an EF.

Good luck to you!

**phantom** · 04-09-2013, 06:33 AM

I agree with the others that paying off that credit card should be your top priority before you do any saving. You should be able to do that with your extra $753.20 this month and still have money left over.

I also agree that getting your emergency fund up to at least $1000 should be step 2. I would probably keep stockpiling cash beyond that till you see exactly how much you will make at whatever job you have when you finish school and exactly what your student loan payments will be.

Once you settle into your new job, you can start worrying about balancing getting your student loans paid off, saving for retirement, saving for a vehicle, saving for a house/condo, and saving for fun things like travel. Take things one step at a time. You don't have to decide where every dime you make for the next ten years will go today. Just be aware that you have some big goals in the future and the more careful you are with your spending now, the easier they will be to hit.

Going forward, in the short term, I would suggest setting yourself a small budget for fun. You can use this for going out drinking, for dining out with your friends, and for new clothes. If you prefer, you could separate these things into separate categories - whatever works for you. The important thing is to recognize that you will want to spend money on fun things every once in a while and consciously plan and limit that spending. I would suggest limiting your overall fun money to about $50/month for now, maybe $100, but not much more than that.

If you want to make some more room in your budget, I would look into getting that cell phone bill down. $180 sounds really high for just one person. Maybe you can cut some of the bell and whistles or maybe you can find some one to share a family plan with?

**MalecoDC** · 04-10-2013, 12:52 PM

Thanks for the advice everyone! I'm going to make it a priority to get rid of the credit card debt and then start saving at a higher rate. Taking a harder look at needs vs. wants I think will also help me.

And phantom, you're right. My cell phone bill is a little high right now, primarily because I have two phones on the plan and a tablet. I can cancel one of the phone lines in June penalty-free and then the tablet will be off my plan in August. Also, with the weather finally warming up, I'll be biking to and from work much more, which should cut the transportation expense down a bit. So I'm always keeping an eye out on where I can cut down costs and expenses.

I'll be happy to report back once the credit card debt has been eliminated, which should be in a month's time. Hopefully the numbers next month look even more promising. In the meantime, take care everyone and thanks again!

**scottgriffin** · 04-10-2013, 02:04 PM

Get rid of credit card debt.

The first item that I would focus on is getting rid of your credit card debt. That will follow you to the ends of the earth.

Personal Monthly Budget--ADVICE NEEDED