More Money, More Problems
July 19, 2012 9:05 AM   Subscribe

21 year old with what seems like a spending addiction and terrible financial habits. Please help me figure out how to spend my money properly. I don't want to live like this anymore, struggling from paycheck to paycheck.

I feel very ashamed about my spending habits. So far this year, I have made $9,000. I have not had to pay for rent this year or tuition. However, I still live paycheck to paycheck and typically end up with zero dollars in my bank account just under one week after I receive my paycheck. Last year I made approximately 23,000 and lived paycheck to paycheck. I have not been using student loans while in school (except for first year) although I will be using them for the fall term.

I'm realizing more and more that I have a problem when it comes to spending money. I have this overwhelming urge to spend money and if I don't spend money then I feel unsettled. I don't buy anything that actually lasts like clothes, electronics, etc.. however, I do buy a lot of food and spend a lot of money on cab rides.

Part of me feels like I simply don't know how to do grocery shopping and end up spending $250 on average/two weeks on groceries. I really need help. I feel at a loss and so humiliated because of what feels like a spending addiction. I've never been the type to save money, not even as a kid. My desire to spend money has always been around and my dad used to give my sister and I $25/week as allowance and I would spend the money as soon as I got it.

The same pattern of spending now is starting to become part of my adult life and I don't know how to change it. What's even scarier is that it's bigger amounts of money that I'm just throwing away.

For instance, I received my paycheck on July 13th which was a total of $948, but now I'm left with $255. So far from July 13th until now, I have spent money on the following things:

-cell phone bill=$72
-internet=$50 (one roommate still owes me $15)
-student loans=$100
-eating outside of home/food deliveries=$75
-cab rides=$120
-credit payment=$75

These are payments that I need to take care of from the 1st-15th of every month:
-groceries=not fixed
-credit card=$75
-cab rides (don't have a car and sometimes I finish work too late, average bus ride is $12)
-gym payment=$28

These are the payments that I need to take care of from the 16th-30th/31st of every month:
-groceries=not fixed
-credit card=$75
-cell phone=$72
-gym payment=$28

My hours vary because I don't have a set schedule. I try to work on average 45+hours per week and if I'm lucky, then I'll end up with 65 hours/two weeks. I get paid at an hourly rate of 15.25/hour. I'm currently a student. I have $850 in credit card debt and $5000 in student loans that I have started paying off earlier this year.

I see a psychologist regularly, I thought I'd mention that because I'm pretty sure people will mention the idea of therapy.

One psychologist told me that my spending habits were a concern and I didn't accept this information or realize it at the time, but I realize that now which is a start.

I feel sick thinking about how much I've spent since I've been working at the same company since 2010 and have had similar hours throughout my two years at the company. My parents paid for my rent throughout my undergrad and I paid for my tuition, textbooks, and all other living expenses such as the ones that I mentioned above.

I really need help. I could use any advice or even technique because I don't want to continue living this way. I also can't afford to live this way...

Please help me figure out how to spend my money properly. I don't want to live like this anymore, struggling from paycheck to paycheck.
posted by anonymous to Work & Money (31 answers total) 20 users marked this as a favorite
A friend of mine swears by the envelope system (using actual envelopes, not just a category on a spreadsheet). I believe Dave Ramsey developed it, but if you find him obnoxious (I do), there are plenty of web sites that describe how to do it.
posted by Wordwoman at 9:21 AM on July 19, 2012 [4 favorites]

of me feels like I simply don't know how to do grocery shopping and end up spending $250 on average/two weeks on groceries. I really need help. I feel at a loss and so humiliated because of what feels like a spending addiction

You don't have a "spending addiction," you're just really, really bad at grocery shopping. Have a strict budget. Put $X in an envelope for groceries, and once the envelope is empty, you don't get to spend any more on groceries. Discipline yourself by having a few "staple" meals that you eat during the week, and stick to that pattern.

The cab rides thing seems weird, too, but I assume there are safety issues involved, and you need to get back and forth from work. If it's not safety-related, I'd encourage you to get over it.
posted by deanc at 9:21 AM on July 19, 2012 [4 favorites]

Any chance you could commute by bike?
posted by mlle valentine at 9:25 AM on July 19, 2012

The answer is basically: figure out a) what you are spending your money on (which you have done/are doing), b) figure out what expenses are necessaries, which unnecessaries you can afford, and which are unnecessaries you can't afford or need to cut back on. Then you create a budget by first prioritizing your necessaries, and then dividing your money -- minus what you want to save - between the unnecessaries.

Everyone has different priorities and needs. I never take a cab, BUT I also pay a lot more rent to live within walking distance of where I work. It may be that given when and where you work, you need to take cabs - so this becomes a necessary that you need to budget for.

You will need to go through all of your expenses and really evaluate how important they are to you. I see several expenses that you have that I might not consider important for me, but maybe they are a big part of your life.

But here are some ideas for starting to reduce expenses:

- do you comparison shop, comparing different brands, sizes to each other?
- do you wait to buy more expensive things (meat, brand-name cereals) on sale?
- do you buy prepared foods (instant dinners, etc) when getting the ingredients might be cheaper? are there prepared foods that you can make for yourself, perhaps on the weekend, to the reheat on busy days?

food out (restaurant or take-out): I adore take-out, and can spend a lot of money on it. I work on reducing my take-out consumption by
- limiting myself to $6/day for lunch (the cost of a cheaper lunch near by work) - I'm allowed to spend $8 one day, but then only $4 the next day
- limiting special take-out (Indian food, etc) to no more than once per week, and usually more like once every 2 weeks - it stays specialler that way

cell phone:
- your monthly bill does look a bit high to me. Do you need all of your monthly services? Can you remove some? Or is there another provider available who could offer you the same service for less? (shopping around I found unlimited voice, text and data for $25/month - when with other companies it can cost $75).

grooming: is this cost for haircuts? I have saved money here by going for hair cuts less often (once a year - I have long hair), but if you are male this may not be easy. My SO gets his hair cuts from a cheap barber. $35 seems a lot for a man's haircut, but I know that you do get what you pay for. I also buy either store brand shampoo or shampoo on sale.

debts: keep credit card debt at a minimum - pay off expensive cards with lower interest loans. Try never to buy anything on credit that you can't pay off immediately, unless it is a choice between debt and not eating.

cab-rides: anyone from your work to taxi-pool with? Is it possible to use alternatives like cycling? (maybe it's too far).
posted by jb at 9:28 AM on July 19, 2012

1. If you spent 120$ in car rides since July 13th (so less than a week), you might as well start pricing a fuel-efficient car and car insurance. 120/w = at least 480$/month (that's 25% of your income). Some cars lease out for around 200$/month, add insurance and fuel and you might still come in under 480$. Also, 12$ for a transit fair? That sounds really steep. Do they offer monthly passes? (Note, I don't own a car and use transit myself. My pass costs me 90$/month).

2. Groceries: only go in once a month. Consult flyers and plan your menus around what's on sale.
posted by Milau at 9:30 AM on July 19, 2012 [2 favorites]

Food & cell phone jump out to me as the obvious places for cuts.

Is there ANYONE you could piggy-back with for phone? You could cut that bad boy in half by sharing a plan with someone. If not, is your life set up in a way where plan-less cell phones make sense? When my data use was still minimal, I got a Virgin Mobile phone for something pretty reasonable off-the shelf & paid a monthly of $25 for their minimum package + texts. Eventually it became too limiting (I was looking for work and Could Not run out of minutes), but there was a time it made sense.

With food, there's a couple ways to go: Are you a coupon-clipper type? There's folks who swear by that stuff. What about bargain shopping? When I was really tight, I knew exactly which stores had the cheapest meat, and which had the cheapest produce (and don't ya know, it's NEVER the same store for both), and which stores would break my wallet every time and which stores were safe for shopping. Knowing your stores really can save you a bundle (HINT: I never grocery shop at Walmart). Or there is bulk shopping at places like Costco & so forth. I'm guessing that's out due to car, but maybe not? Be careful with bulk shopping: It's easy to forget that the goal is to save money, not laying in such a ridiculous supply of stuff that you never have to shop again. I know folks who end up with a year's supply of toilet paper without making a dent in their food expenses.

Also: Eating out vs. in. Obviously you know which is cheaper. You can save a crapload of money by brown-bagging it & making your coffee at home. But there's also a middle ground: Take out. Food+drink+tip=expensive. If you take the food out, you're at least saving the price of tip. And maybe the price of desert & coffee, if you don't buy it for take-out. Plus you have a good chance of leftovers for later if you roll that way.

Last: Making your own instead of buying freezer-boxes can save you a chunk too. Eating leftovers instead of throwing out food. Making less if you know you're not a left-overs type --if that means you have half a package of steak left, try freezing it! Yes, foodies will tell you it does terrible things to the steak...if your not a foodie, don't worry about it. It reheats well enough for the rest of us.

Good luck. Don't forget with more general items: Buy used instead of new. The savvy consumer can get some remarkably new-looking things if they keep an eye out & learn where the best sources are.
posted by Ys at 9:33 AM on July 19, 2012

For groceries: where you shop can also make a huge difference. My mother lives near several working-class area bargain grocery stores; I'm in a much more trendy area with higher end grocery stores. She can get stuff for 75% to 50% of what I have to pay.

Sometimes, this reflects real quality differences (like cookies with trans fats versus none), but often it's just a matter of what the market will bear. Find out where the cheaper grocery stores are, if you can get to them without spending more money, and make trips there. My SO and I, for example, recently walked 30-45 minutes to hit a cheap grocery store and get stuff like meat, cereal, etc - when we have two grocery stores about 15 minutes walk away.

My mother also reads the weekly flyers, looking for sales on things she already buys, and uses that to decide which direction to go (she has three grocery stores all about 10-20 minutes by bus, in three directions). Don't be suckered in by sales on stuff you wouldn't normally buy, of course - that just costs more money. (Same with buying in bulk if you wouldn't use that much stuff).
posted by jb at 9:34 AM on July 19, 2012

I'm a big fan of Gail Vaz-Oxlade. Her budget worksheet allows you to set up a jar or envelope system so that you don't overspend and can visualize your money situation. When you feel like money is slipping through your fingers, you should use this system so that you can always be reminded of how much you've spent and how much you have left to spend. In fact, I love her entire website and think it provides lots of great tips and resources to build better financial skills.

The second issue I see is groceries. You need to create a menu and shop accordingly. Use menus that will let you get the most out of your purchases. If you need green peppers for s recipe one night, make sure your next recipe will use up your left over peppers. Whatever day is the flyer day where you live is your menu making day and create the menu around sale items to save money.
posted by GilvearSt at 9:34 AM on July 19, 2012 [9 favorites]

You might try the envelope method. You will need more envelopes than you have listed above, though.

Here's how it works: Get a stack of envelopes and label each one. For example, one of them says "gym payment $56". Make one envelope for everything -- that psychologist you see needs to be paid, sometimes you do buy clothing, and so on. On each one, write the category and the monthly amount.

Let's look at the clothing example. What if you do not buy a piece of clothing with every check, but instead you buy about $100 of clothing every 4 months. Write on the envelope "clothing $25".

Cash every paycheck and divide it into the envelopes. Pay each bill out of the envelopes. You want to take a cab home? Look in the cab envelope. No money means you don't take a cab.

Ok, but what if you add up all the envelopes and you don't make that much money? Look at each envelope carefully and evaluate what you can cut. Can you take up jogging and do situps and pushups and get rid of the "gym payment" envelope? Then do that. Be realistic -- you want to eat at home, but you really will order a pizza every now and then. Or, what about a frozen pizza instead? If you ate a salad with the pizza, you'd eat less pizza (and be healthier). Bagged lettuce? Or you wash it yourself to save the dollar or more? Continue to weigh each decision until you come up with what's right for you.

The first month you'll get it wrong. That's ok. Just readjust what's written on the envelopes until you get it right. To help with this, put your receipts in the envelopes when you take money out. This will help you see trends -- you order more take-out during finals, or you always buy pre-made items from the grocery store when they are things you could make yourself rather easily/quickly, or your roommate is pretty bad about paying their half of a bill.

Don't feel ashamed about this problem. LOTS of people do not manage their money well. Maybe even MOST people. You are younger, so you haven't had years of experience doing this and you are smart to want to learn how before you're older and this has snowballed into a huge issue.
posted by Houstonian at 9:35 AM on July 19, 2012 [3 favorites]

Nobody comes out of the womb clutching a budget. Some people, because of life circumstances or clever parents, learn to do this stuff before they leave home, but the rest of us end up reaching adulthood without much practice or wisdom. It is a skill. It has to be acquired.

This is a waste of shame, it really is. None of this is unusual, all of it is quickly fixable. The thing about the shame is that it gives you "permission" to stick your head in the sand instead of thinking, and that's where you run into trouble.

I get it - I've been depressed, I've done the thing where I wouldn't open the mail, I wouldn't check my bank statement, I wouldn't even really look at the amount as I paid for groceries. idea - shark attacks? I don't know, but I know I did it and it was compulsive.

So, start looking directly at things. You may occasionally be confronted with limits, but there is almost zero chance of sharks unless you shop/work somewhere quite unusual, so at worst you might have to deal with making a choice.

You can read all the books and have all the envelopes, but if you won't look directly at them they won't work. Please discuss this with your therapist. Find one of the city/county/local nonprofit agencies in your area that offer classes in budgeting. Find a friend who's preternaturally good at it and ask them how they do it (this is actually a thing adults talk about).

And do your math, do it about everything. When you work late hours and take a cab, are you earning more money than the cab ride? A lot more? No? Stop doing it, or find a way to make it economical. Sit down with your grocery receipt and figure out where that food is going, because I could not personally eat $244 worth of groceries alone before most of it went bad. I think (because I remember this) you're just flinging food in a basket and getting out before you have to think too hard, rather than deciding on 5 dinners, 5 lunches, and a breakfast routine, buying supplies to make those, and then purchasing those supplies. That's not just super expensive, but you've got to be either throwing out spoiled food or you have more canned goods than you have storage for.

Stop. Think. Calculate. Find resources to teach yourself. Beating yourself up over this is a distraction from just taking care of it.
posted by Lyn Never at 9:45 AM on July 19, 2012 [8 favorites]

We're on a tight budget too. I'm into comparison shopping and coupons.

The groceries and cab rides jump out at me as items that could be halved.

Bus or subway or walking can replace cab rides. Car pooling may also be an options.

As for food, cooking is the best way to save money on food. Do you cook? Are you interested in learning to cook.

From your post, I'm getting the idea that you're in the NY area. If so, may I recommend H-Mart as a great, inexpensive place to get meat, veggies and ramen that won't make you sad? The assortment will astound you.

I find the meat and poultry to be an excellent buy. Sign up for the little plastic dealy for your key ring, you'll save money that way.
posted by Ruthless Bunny at 9:47 AM on July 19, 2012

You should be grocery shopping daily, or every other day, and ONLY buying what you will eat immediately.

Do you buy a lot of processed or pre-made food??

Lots of info out there about how to shop at grocery stores, usually it includes, "shop the outer perimeter and avoid the inner aisles."

It sounds like a lifestyle problem, not a spending issue.

Is there someone you know that lives and spends well? Can you ask for their advice directly??

One place you can be doing better is groceries. The idea that you must buy 2 weeks worth of stuff every time you go to the store is false!! Yuck. Does food even stay edible that long? Unless you buy all frozen, you must end up throwing HEAPS away.

Do your marketing "European" style, daily or every few days, buy only what you will use and what you will need for those few days.
posted by jbenben at 9:51 AM on July 19, 2012

//You should be grocery shopping daily, or every other day, and ONLY buying what you will eat immediately.//

In my experience, you will spend way more doing it that way. Grocery shop 2X a month, at the most. Plan your menu, go in with a list, and buy only what is on the list. You may need an extra trip to restock milk and bread, but 90% of your grocery spend should be during the every other week shopping trip.
posted by COD at 9:54 AM on July 19, 2012 [4 favorites]

Another thought: If you are a student and working full-time, you are pretty busy! Too busy for lots of cooking and comparison shopping, and all that -- and no wonder you eat out a lot and probably make unwise decisions at the grocery store.

Make a list of foods that you can buy cheaply at the grocery store and fix super-quick. These are your replacements for eating out, and your replacements for whatever is expensive in your grocery bill. They have a longish shelf life, can be bought cheaply at any store, and require no real cooking skills. They are the "I'm too tired or busy to cook, and too poor not to" foods. For example:
- Peanut butter sandwiches (get generic PB and not-fancy bread)
- Cereal with sliced banana (get generic cereal)
- Hot dogs (you can freeze these, by the way)
- Oatmeal (generic and not the instant stuff)
- Pasta, to which you can add butter for buttered noodles, or a generic jarred pasta sauce
- Beans and rice (for ease get canned beans - heat up in microwave while boiling rice)
- Many fresh fruits, tomatoes, radishes, and similar produce need little more than a quick wash
- Eggs and bacon can be fried in minutes, in the same skillet so wash-up is easy
- Canned tuna fish plus a little generic mayo can be added to the bread for a sandwich, or on top of lettuce for a salad or to cooked macaroni for a pasta salad
- Canned sardines can be eaten right out of the can with some generic Saltine crackers
posted by Houstonian at 9:55 AM on July 19, 2012 [1 favorite]

Buy only on-sale grocery items, and buy a lot if the price is good.

Ditch your smartphone plan and go prepaid, you can go extremely frugal and get a X minute plan and use VOIP/Skype at home. Or get a prepaid unlimited plan which are around $50.
posted by wongcorgi at 9:57 AM on July 19, 2012

Seconding Gail Vaz Oxlade. She is awesome. One thing she does, which I like, is give you a free money category. So many other books I read focus on how spending is bad. Gail says it isn't bad, but it has to be balanced. So, if you have 25% to spend on 'life' (and that includes the gym and cell phone!) and given your income, that works out to x dollars, you can spend those dollars guilt-free.

As for meals, I am still working on this myself. But what helped me was to make a list of meals I liked and just stick to those for awhile. Then I turned them into general categories; for example, let's say that for the next little while, you decide your Monday night dinner will be pasta and tomato sauce. After a few weeks, you can change it up with a different pasta recipe. But knowing that the general category is pasta makes it easier to conceptualize.

Good luck!
posted by JoannaC at 10:06 AM on July 19, 2012 [1 favorite]

Honestly, it sounds to me like you are in excellent position to successfully manage your budget, and it's impressive that you want to get it under control at such a young age.
May I suggest that you reframe the "spending addiction" perspective? You are 21, and trying to manage $9,000, and learning how much things cost and how to budget. Give yourself some time before you consider it a crisis or an addiction or panicsville. In the olden days, this was the time of life you learned how to do stuff -- it's not just insta-knowledge 'cause it's searchable or there's an app for it or it turns up on a symptom list.
posted by thinkpiece at 10:14 AM on July 19, 2012

I'm actually going to give a stab at answering this but thinking about it from another perspective, because this implies life style, not just money. So if you were overweight and then dramatically stopped eating/exercising a lot, would it work? Not for very long. For that reason, I just want to give you some things to think about, which may or may not apply:

• Cabs (you mention leaving work): My first question is- if this is for safety, then have you asked about policies at work for transportation if you leave after time X? Some work places have a policy that anyone leaving after 10:00 (or whatever time) can take a taxi and charge it or get reimbursed for it. They often don't tell you about it unless you ask: Ask this question at work.

• More about cabs: Besides work, why are you taking them all the time? IS it ...the time (hours on the bus?) so it is not comfortable? Is it that you are running behind? Ask yourself why and try to make a plan around it. For example, if it is boredom, bring podcasts, whatever it takes. OR if you hate being confined, take a bike or whatever on other days. Or if it is time, prepack things for the day.

• Food - for the time period that you list ends up with this being really high. The question again is: why? Are you tired when you come back from work? Is it social? Identify the underlying reasons and make a plan around the underlying cause, too. If it is time, premake food for the week (or find cheaper premade meals). If it is social, have a night or two at your place with friends and trade off.

• Spend time revisiting the costs or negotiating. So for your cell phone: Have you done comparative shopping? OR....have you tried calling your cell phone company and ask to talk to the person who "disconnects the service" and tell them that you are considering changing companies because of the the goal is to get them to drop the price, not change services, but many people who ask get this for 6 mo/ or a year.

A couple other things to think about it. I don't think this should be black and white/instant strict austerity measures for you or you may fail. Rather, precook a meal for a week. Only take the taxi home X/days a week. Start making changes and measure the resutls.

Another idea that you could try but it would be self-imposed. Look at everything on your list and decide what you really value/do not value. Let's pretend that you buy Scooby snacks for $20/week and decided that it is stupid and not your goal. Then make a tax and set it at a percentage. Maybe the tax for Scooby snacks is 50% and if you buy them, immediately deposit $25 in savings. Continue playing with the price.

The other last idea that I am going to mention is to rethink your hourly wage. I would count everything else that goes into it if they do make you pay for taxi rides and the time to take the taxi. So in reality is it now $10 per hour? Look around for a higher paying job. It doesn't have to be a huge jump but if it were $20/hour and no commute, it would cut back, too. Just something to think about.
posted by Wolfster at 10:17 AM on July 19, 2012 [4 favorites]

We just started using SmartyPig for this purpose. We had been similar spenders, close to living paycheck to paycheck at times. I've set up the withdrawals to happen the day after my paycheck is direct deposited, so I don't get a chance to spend the money. We've been saving the most money we've ever saved with this method.
posted by disaster77 at 10:18 AM on July 19, 2012 [2 favorites]

When I shopped once a month, there was a massive amount of overbuying and spoilage. I now shop small, about 2-3 times a week focusing on items I can use for several meals in a week. I also liked Economy Gastronomy's advice to "use everything that you buy".

And get the absolute cheapest pay as you go phone plan as you can.
posted by wingless_angel at 10:32 AM on July 19, 2012

I don't want to live like this anymore, struggling from paycheck to paycheck.

While some control over your budget is probably a good idea, the only real way to avoid this is to make more money. You said you earned $9,000 this year? It's the middle of July. That puts you on track for earning about $15,000 this year. That puts you right on the edge of being eligible for food stamps. In other words, it would not be entirely unfair to describe you as "poor." Not destitute, certainly, but definitely in the category of "working poor."

And here's the thing: pretty much everyone in that category lives paycheck to paycheck, and they pretty much universally report that it's No Fun At All.

So yes, learn to live a bit more within your means. The most effective way of sticking to a budget that I've ever heard of is just paying for everything in cash. No question about how much you've got left, no ability to spend it when it's gone. But I think that it's probably more important that you get used to the idea that, making what you're making, you're never going to have all that much slack in your budget. This is not a moral failing, and the only thing it reflects on you is that you don't make as much money as you'd like. That's true of everyone, even people who aren't living paycheck to paycheck, so it doesn't say anything bad about you.

Welcome to real life.
posted by valkyryn at 10:41 AM on July 19, 2012

There probably is little that OP can do about the cabs, it's likely the buses in OP's city stop running before work is done, leaving no other option. Really the only way around this in a transit-poor city is fight for hours within the bus hours or find another job. It's likely the hours you work after the buses stop running combined with the cab fare are resulting in a net loss for you. This is not a moral failing of yours, it is a failing of our transportation priorities.

I don't know where you go to school, but finding free food on college campuses can be quite simple. If your school holds conferences, free breakfast can be easy to find. Check the master events calendar for promising leads. Learn to feign an interest in clubs that give away free food! You might become actually interested! (This is a serious suggestion, I got many free meals in my time at school.)

I would suggest cutting the gym payment. You don't need a gym to exercise.
posted by Hollywood Upstairs Medical College at 10:52 AM on July 19, 2012

I don't think you have a problem necessarily. I think you just haven't learned some tricks.
1. Get a pre-pay phone
2. Eat simple, easy to prepare meals
3. Stock up on frozen items of what you order out (e.g. pizza, burritos, etc.).
4. Arrive 1/2 an hour early to all meetings (so you don't take a cab).
5. If you use the gym, great. If not, take up jogging.
6. What is grooming? A haircut? Get your hair cut to grow, so you can get that done less often.

Paying off your credit card should be your highest priority. Consider getting a loan from your parents or a friend and pay them back monthly with interest lower than the credit card company's.
posted by xammerboy at 11:06 AM on July 19, 2012

I'm detailing my budgeting system in case it sparks an idea for you:

I struggled with budgeting for YEARS until I realized that, as I spent whatever money I had my hands on or that I could access with my debit card, I needed to take the envelope system one step farther and automate as much of my money as possible so it didn't pass through my hands. I set up separate bank accounts (my bank does this fairly easily), and had my paycheck deposited into one, which I didn't bother to set up a debit card on so I couldn't easily pull money from it.

I then worked out what my budget was in broad categories--monthly fixed expenses, savings and flexible expenses (groceries, gas, and fun money, for the most part)--and set up automatic transfers of the share for my savings into my savings account and the share for flexible money into my debit account. As my bank is lovely in that I can pay any bill electronically (if they don't have an account for electronic transfers to someone, they'll cut a physical check and mail it) I set it to pay all my bills, so that money left my deposit account without me getting my hands on it and spending it.

Anything left in the deposit account at the end of the month I'd sweep all at once into savings, or use it to pay on my credit card. Since I couldn't get to it easily without going home, sitting at my computer, and transferring the money, it was hard to spend on a whim so I met my monthly expenses. By removing money from easy access, in three years, I paid off $5000 of credit card debt and paid my car off nine months early.

This is all in past tense because I'm now married and we're set up slightly differently, in that we both pay our share of household expenses into a joint account from which all the bills including groceries come, but I still have a flexible money account that I dump "fun" money into each month that I use to pay for my clothes, lunches without my husband, gas, books, etc. He's got his own accounting system that he uses to cover his personal/fun expenses.
posted by telophase at 11:58 AM on July 19, 2012 [4 favorites]

Does your school have a gym? The rates could be lower than paying for an outside gym membership.

Does your school have a meal program? Mine had something where we could put money on our ID card basically and then could only be used on campus. That could be part of your food "envelope"

Can you ride the bus for free using your student ID? In my city you can (even if you aren't going to/from school) That could help with some transportation costs.

Are you truly "abusing" any student discounts that you could be getting? I could get a cell phone plan through my school that was cheaper than that one. Or, could you be on a family plan with your parents? Even if you are only paying the additional costs for you it is likely $10-15/month to add another line. You could even get together with a friend and do a family plan.
posted by magnetsphere at 11:58 AM on July 19, 2012

I think careful shopping and food preparation would help a lot.

And I would like to congratulate you for your savings category! Good for you!
posted by jgirl at 12:24 PM on July 19, 2012

The only part of your budget that really gives off giant "something is wrong here" warning signs is your food budget. As others have said, with the amount of money you're making, you're just plain not going to have a ton of wiggle room in your budget. But your food expenses are somewhere you absolutely can and should cut back on. Spending over $300 on food halfway through the month for one person is not reasonable. As a point of comparison, when my brother and I lived at home with our parents, that is approximately how much my family spent on two weeks' worth of groceries for a family of four (and that's even accounting for the spread out cost of buying rice and meat in bulk once every 5-6 weeks or so). As a single person, I generally spend between $50-80/week on food and groceries. I could cut that down if I really needed to be frugal, but I buy fresh fruit and vegetables, and that budget includes some indulgences (cookies, booze, ice cream, Starbucks, etc.). At the most, when I'm low on energy and/or time and don't cook for myself, I spend $120/week on takeout and Trader Joe's frozen dinners.

So what are you spending all that grocery money on? Are they impulse buys, like oooh, those chips look good, toss them in the cart? Are your cupboards still full when you go grocery shopping? Does a ton of your food spoil every couple of weeks? Do you cook for yourself, or are you buying all pre-packaged and prepared food? Where are you going shopping?

Grocery shopping, menu planning, and cooking for yourself don't have to be complicated or time-consuming. Going shopping every 2-3 days works for some, but I'm guessing you don't have the energy during the work week (neither do I). So shop on the weekend/your day off. You don't need to become a coupon cutter, but take a look at the store's weekly flyer when you walk in. What's on sale/in season? Build your menu for the week around that. Limit the number/type of items you're buying: like two types of non-water beverage, two snack-type foods, one indulgence (ice cream, alcohol, candy), 3 vegetables (frozen or fresh), 2 carbs, etc.

Speaking of your weekly menu, do you have one? Do you plan your meals at all? Some people are really organized about this and it works for them: choosing recipes for the week, then building their shopping list around them, and doing as much prep work and cooking for those meals in advance as they can. I'm not so organized, but I do plan: I take a look at what's on sale and in season, and build about 4 meals (at at least 2 servings each) around those items. These aren't complicated meals, because I don't want to spend any more than about 2-3 hours cooking on Sunday. They basically boil down to protein + vegetable + starch/carb (this part is optional). I do the cooking on Sunday, then box it all up and stick it in the fridge, and then I'm set for work lunches and dinners for the rest of the week. You can cut this time down even more if you make sandwiches for work meals, or use prepared items to build your meal. For example, I got lazy last Sunday and for one of my meal batches, I tossed some pasta and broccoli in a pot to cook, added premade pesto sauce after they cooked, and added some of those strips of precooked frozen chicken. Ta-da, 3-4 work lunches, and it took 10 minutes of actual prep time.

You really don't need to feel super ashamed about this. You're 21, this is exactly the time a lot of people are figuring out how to budget and cook for themselves and basically live like an adult.
posted by yasaman at 12:27 PM on July 19, 2012 [1 favorite]

It's awesome that you're addressing this now and it will save you many, many thousands if you can get a handle on things so early. I really mean that. At the same time, that's a scary amount of money (to me) to be spending without rent, tuition or huge sums going to your loans.

- The cab situation has you spending nearly 13% of your July income so far on getting home from work, if I'm reading that right. Bearing in mind that transportation is always going to cost something (even if just shoes!) unless you live right where you work, is this a good deal for you? Is the experience valuable enough or the job market hard enough?

- The grooming expenditure seems crazy high, and way beyond the lifestyle your income allows. Have a close look at this. Is it important enough that you'd sacrifice the gym for it? Replace meals with oatmeal for it? Or, if your family buys you gifts at birthdays/holidays, can you ask for gift tokens for grooming as a treat to yourself so that you can afford it that way?

- Do you really have no entertainment/socialising budget up there? Not even a cinema ticket or bringing beers when visiting friends? I realise you're getting started with budgeting (and that is GREAT) and the recommendations for the envelope method etc look ideal, but make sure you cover your actual costs. Budgets aren't punishment, they're just a written-down reflection of your intake and outgoings, and what you need to adjust to make that stress-free and stable. Make sure you include treats, budgeted to fit your means.

The grocery budget is your real problem, and I feel for you, because this was killing me for years. For me, part of it was that I work very long hours and was stressed, and meals became a thing to look forward to, a treat – not junk food or fancy food, just processed or prepared food. When I started setting an envelope-style limit to the cash I'd take out per week, I got a shock from how much I was spending and how much I was taking it for granted, and when I started budgeting and cooking all my meals, I felt a hell of a lot more like I was actually being good to myself. Maybe this isn't your situation, but I'm mentioning it just in case.

Don't suddenly go and buy a month's worth of food, that's terrifying and you need to see if it can work for you. Instead, the very first thing I'd do is plan a bunch of simple recipes you'll actually eat, and put them in rotation, and make an extra portion (or two, or three – whatever you can eat before it goes bad) for work/school. If you can't cook, buy pasta sauce and chop up some extra veggies into it. (Even if you assemble rather than cook, you'd save a good percentage, and you can work from there.) Plan for meals including what you eat and like to eat now, not some ideal version of you that's suddenly super-healthy as well as super-frugal. Plan back-up meals in case you're stuck, whether that's cooking things to freeze or always having peanut butter and bread in the house as a fallback. Notice the prices in different stores and try to avoid having to stop at the expensive ones. If you can drink only water and home-made (or work-made) coffee, that will help.

Seconding the comments above about there being no reason to feel ashamed. There's loads you can change, any bit of which will make things easier for you, and the independence of being in control of your money will feel absolutely great. Just be sure you find the balance between living like you're on 4x your salary and going so far the opposite way that it's untenably hard.
posted by carbide at 12:58 PM on July 19, 2012

I just want to underscore what's been said above: you do not have a spending addiction problem. Do not pathologise your spending - that is a really destructive (and unnecessary) thing to do. What you have is a budgeting problem.

Budgeting, shopping for groceries and cooking are all life skills. You do not need to carry shame about not having these skills at 21 years old; 21 years old is exactly when most people start developing them.
posted by DarlingBri at 3:19 PM on July 19, 2012 [1 favorite]

Since so many people have highlighted groceries as a possible place to cut back, I thought I'd mention Cheap Healthy Good as a starting point for ideas on how to make frugal, healthy, tasty meals.

You can totally do this. One step at a time. Good for you for making this a priority now!
posted by kristi at 10:31 PM on July 19, 2012

I know exactly where you're coming from, although my spending took the form of physical goods - the idea that I could be a better person through owning X or taking up Y - rather than what you're spending it on. I know the feeling of checking your bank account and hoping someone actually cloned your card, rather than the reality of you going through so much money so quickly. the irony is that I cut corners on food, and I didn't drink or go out much - the usual tips about bringing your lunch from home or not buying coffee didn't apply to me - but I would spend money by 'saving' it on things on sale or reduced priced things instead of the fewer things that I wanted and needed.

There were only two ways that made me feel the stark reality of it - keeping a spending diary, and (this doesn't work for everyone I know) transferring the money left after rent and bills to a trusted friend and asking them to give me it back in portions throughout the month. This forces you to budget and it soon becomes a game where you have to keep it under the limit. I tried this with separate accounts but there were too many ways to cheat!

The second thing you need to do is sort your groceries out. Make a list and buy what's on the list. Do this until you have an idea of how you eat for the week - what leftovers can be made into this, when is such a food in season and is therefore cheaper. Buy your meats from the reduced-price section where the food that's near expiry goes, divide it into portions and freeze it so you have some bits of protein handy (assuming you eat meat). Buying only what's on sale is good advice, but it's no good if you only buy things BECAUSE they#re on sale - you'll end up with a bunch of bargains that don't make any kind of meal.

In terms of cutting down time, I usually make a double-portion of meals so I can heat up the second the next day (this is great if you do it on a Sunday, because you get a nice meal on a Monday).Takeaways are not your friend. Learning how to cook from scratch will sometimes save you money, and almost always result in eating something nicer.
posted by mippy at 10:13 AM on July 20, 2012

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