this post was submitted on 01 Sep 2023
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Hey man, first off I'm sorry for the situation you're in. I'm not sure if you are looking for commiseration or advice, so if I offer some please know comes from a place of love.
I was in a similar spot to what you're describing. I am not going to suggest that you can budget your way out of poverty - that's absurd, the only long term solution (aside from fixing a lot of broken systems) is more money.
That being said, this is something that made my situation more bearable. I cut up all my credit cards. I created two checking accounts, one for bills and one for everything else. I added up all my monthly bills and divided them by the number of pay periods in a month. I split direct deposit so that one checking account got the bill money and the other the rest. I never touched the bills account outside of depositing money and paying bills - I kept the physical debit card locked in my closet.
This helped me keep on top of my bills and keep an eye on how much discretionary money I actually had to spend. I found the alternative was piles of late fees when I forgot that x bill was coming out of this pay check and I stupidly bought a donut that week or whatever (man it sure is expensive to be poor).
Like I said, it's not a solution and I don't know your situation. No amount of budgeting is going to help if you don't have the income to cover your expenses, and I wish that that fact wasn't treated as a moral failing by so many people.
Yep good advice, some services have no investment value loss e.g. short term insurance, life insurance, etc. You can switch elsewhere for a cheaper rate and lose nothing.
Unless you have a family or dependants, I'd cut out life insurance and focus on the essentials for now to recover. I also learn long ago to pay my credit card off every month to not have to pay interest on it..
I'm glad to read that! I hope it helps. I would also recommend joining a credit union if you're eligible and not already a member. They will typically have much better rates and lower fees on various services. Also, doing this math can be depressing - I remember having weeks where I had like $30 to cover gas and food. If you find yourself in that situation, dried beans and a second-hand pressure cooker are a much healthier alternative to the usual ramen packets.
lol me, every month at the end of the month.
There's a lot more column B on the personal finance lemmy if you want to go further!
Consider finding a budgeting tool to help. I use YNAB (though it’s gotten kind of expensive at $15/month) that keeps me in line. It’s a cash spending budget model that keeps me focused and away from credit card debt and ultimately saves me far, far more than the $15/month fee. It’s especially helpful if you have shared finances with a partner.
There are lots of good options out there from free to more expensive than YNAB, but a good tool can go a long way to helping you maximize what cash you do have.
One thing I’d change here is the credit card thing.
Not using a rewards credit card (like it’s a debit card) is leaving money on the table. I get 1-5% on every purchase I make and never pay interest because I pay the credit and as I go, never spending more than cash I have on hand.
Granted, this is a discipline thing and not everyone can trust themselves with a credit card, but if you can get that under control, you should absolutely be using a credit card for all spending unless the fee to do so is greater than the reward.
That's 100% true. After a certain point, I migrated from using my "bills" checking account for everything to using a credit card with cash back rewards, and paying that off every pay period rather than using the checking account. But, that is only useful advice if you are already out of debt - if you're carrying a balance on your credit card, rewards are likely not going to out pace your interest accumulation. It's also a good idea to try to fit in as much savings as you can - any little bit in a money market account making you money is a good thing, and invaluable when an emergency comes up. But again, that is very very dependent on your financial situation, and may not be realistic to many people.
Great callout on it working best when lm you’re already out of debt.
Studies repeatedly show people spend more with cards. It's often more than the cash back amount in the first place, and additional fees for credit cards is becoming more common. Cash is vastly superior at controlling spending.
Yes, I am keenly aware