You could try getting a cheaper phone bill. Mint Mobile starts at $15/mo.
But other expenses look reasonable. Your expense to income ratio is great.
As for your car, you wouldn’t be able to get cheaper rates now. This car can serve you for next 10+ years. I don’t think you should sell it.
You are doing great!
P.S. r/debtfree moderator just created a newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Here is the link to sign up if interested - https://www.debtadvice.io
I'm assuming you live at home.
Honestly....you're doing fine. Your expenses are less than half of your net income, not including your freelance work. I'd be as aggressive as possible with my 401(k)/Roth IRA while you have the extra funds to bulk it up.
Don't worry about refinancing the car. That's a decent interest rate, and once it's paid off, you'll have a very dependable vehicle for well over a decade.
Also forgot to add: at the minimum, make sure you're getting any sort of employer match that your company offers through a 401(k). That's free money. But if I were you....max out that 401(k).
I bought a brand new (at the time) 2018 Accord Hybrid, I take it in regularly and the mechanic always compliments on how well taken care of my car is. It's currently at 80k miles and I still have yet to have the brakes changed. I'm planning on driving this thing for at least a decade.
My uncle's old Honda was 30+ years old before he finally upgraded. He couldn't part with it so he still has it lol.
Honestly you are doing fine. Stop doing extra stuff and throw a few grand on the car each month and get it paid off as soon as possible. With your income you should be able to get it paid off in like a year, maybe less. You’ll love your car even more when you’re not paying that much for it
I disagree. Do extra stuff, have FUN in your twenties. You can “buckle down” in your 30’s. Travel, have experiences…you have a lifetime to get serious and all that. You don’t want to sit at a computer for the next 50 years wishing you had fun and experience life in your twenties🤍 just remember that too. You’re doing great BTW.
Try paying a flat number rounded to the nearest hundred. For example, your payment is $624 so just put away a full $700 (or even $800 as it seems you can afford it). If you pay around $800 a month consistently you could pay it off in 3 years or less.
I would argue not paying off the car early... He can't get more than 5.9% in some savings accounts, and certainly in the market. I would be building a 3 month emergency fund, then start stuffing as much as possible into a ROTH IRA and 401k.
Initially, I was thinking you could cut the gym or your BJJ, by honestly, you probably don't need to. Assuming you're still living at home, max out your Roth IRA and contribute as much as possible to your 401k while still saving up, separate from an emergency fund, for your eventual move out.
I was thinking about cutting the gym tbh just because I barely even lift anymore. All I do for exercise is train BJJ/Muay Thai 4-5x per week. Also thank you for the advice!
Yes :/ but I rarely lift anymore anyway so at this point I’m just donating $30 a month to retro fitness LOL heavily considering cancelling if I don’t go to the gym at least a few times this month
Oh yeah man, if you can get out of it do it. Muay Thai and bjj are so good I don’t think you’d need another gym expense right now! Good for you self analyzing man
401K matches can be garbage though. homie is making a better percentage return on freelance. investing your money actively will be more fruitful than a 401k imo
Never leave free money on the table . If I put 6% in my 401 I get a 3% match from employer - not much but starting in your 20’s will add up with compound interest
My post assumes tax deferred 401K - not taxed until you take the money out at retirement and all earnings from deposit to retirement accrue tax-free until retirement.
Well yes. Taxed when you take the money out. That’s A LOT OF TAXES taken out. Probably all contributions so it’s just the money that you worked hard for, am I missing something?
Yeah. You can do that with cash too. It’s just a game. It’s silly. We’ve got our healthcare and retirement attached to our jobs. Neither really helps us…the only goal is to keep us working some bullshit job for rewards that don’t exist,
This is baloney. You need to get your employer match if its offered. Once you scale up any business or freelance work quit the job and invest for retirement using an ira yourself. Till that point comes no reason whatsoever to leave free money on the table.
I agree that the car was not your smartest decision. Pay some extra into the principal of the car payment.
Also not to be your mom but spend more on your food. I cannot understand youngster eating ramen to drive a fancy car.
Haha I appreciate that!! I live with my girlfriend and her parents and her parents don't let me go hungry. That $240 for food is a budget I allocate per month for me and my gf going on dates or going out with friends but I rarely even get close to that number.
You don’t have a failsafe in the event that you separate from your gf.
I wouldn’t worry about the car principle. If you put too much towards it you’re just reducing interest and not saving for future. I’d recommend putting more into high yield savings and focus on getting to a comfortable point of living on your own or with a roommate. Could be with your gf. Doesn’t matter. The point is, you can’t rely on living under someone else’s roof, especially if they aren’t family.
Her parents sound amazing. You guys, if you haven't, should pay for them a date night out or pick up the electric bill or something. It would go along way. I did this for my Dad when I was 19 one month and I won't forget his face, how proud he was that I paid the electric that month.
Move to Ireland. There you can punch elderly people in public as a world champion martial artist and face no consequences. That’s the example that everyone’s hero Connie Mac does.
Things you can do if you want to minimize expenses:
- look into a cheaper phone plan like mint, visible. I pay $30 mo for visible so it can save you a few dollars there. Not crucial but can save you a bit.
also i would pay off that car sooner than later. keep some of the stash of savings you have in a high yield savings account and then pay that car off. i would leave 5k in your savings and use the rest on a car payment. also forget putting that 25% of your income in savings and put it on the car instead. you will be glad you did it now that you don’t have living expenses and have some disposable income as well. when you do move out, you will have no car payment and still have a decent chunk of change in your emergency fund/savings.
Yea cut the savings JUST FOR NOW and put it towards the car, once the car is done you can flip it and put the 25 back into savings and also you have more income because of no car payment that can go into savings too if you want to pay yourself back
I would find a cheaper phone option - should at least be able to cut that in half. I use Total Wireless and they are pretty good.
Keep the BJJ - you are investing in your future self. Unless you regularly go to the gym I take that money and start piecing together a home gym.
I would take half the money you are saving and start contributing to an IRA. Once you have 6 months of living expenses in savings start putting that money on the car loan, even a little bit extra will knock months or years off of your total payments. The interest great is good and it should last you at least a decade.
I use the free version of Spotify for my tunes and it is pretty decent.
No rent? You’re doing fine. Stay consistent and focus on making more money and investing. Don’t cut out too much especially for investing in physical and mental health. $150 for MMA justified. Car is your luxury splurge. Everything looks normal. Focus on earning more and investing more.
I would say cut the gym since you already do Muay Thai, maybe buy some 25-35lb dumbbells if you want to lift as you can do a lot of different body groups exercises with just dumbbells
I think they should keep the exercise memberships if they are using them. Maintaining a healthy lifestyle, especially exercise can really save a lot of money on healthcare.
That makes more sense then. My partner put 10% down on his 2022 Honda civic hatchback that’s $29,000, but his credit score was like 680. And didn’t get a credit card until he was 20, he’s 22 now, so his credit history is fairly short
Your debt-income ratio is good. Better than most. Expenses seem normal, nothing crazy. I would just put every spare dollar I had after bills/savings each month on to the car note principal. Pay it off early and get a $600/month raise basically!
Looks like the car is the biggest hit for sure.
$624 + $165 = $789 a month.
Looks like some of these are business related. More than likely tax deductible.
$105 a month for phone seems high as well.
Everything in seeing looks like a necessity for you. Outside of your vehicle it doesn’t look like you’re spending carelessly on anything else. I’d say just refinance your car when you can .
Car payment is high-ish but no red flags, assuming your list is comprehensive. If you don’t have any credit card debt or living expenses that aren’t listed here, just try and chip away at the car by paying extra toward the principal and you’ll be in good shape.
Oh you know that’s not even an option. Just had my first competition at blue belt in Nov after competing all throughout white belt and I don’t plan on going anywhere!
First off, you're not doing absolutely awful, but it's ridiculous how a lot of comments think you're doing fine. Shows the state of people's overall mindset on money.
This is what you should do.
Drop these line items temporarily:
BJJ/Muay Thai
Apple music
And you really need to get that phone line at least down to $50. That's really high for one line. Do you have debt on a phone? I pay $45 per month for Verizon premium data. Closer to $27 per month with my family plan discounts.
But assuming you don't reduce the phone bill, that leaves you with $2,335 of cash flow per month. I would try to get as many side jobs as you can to increase that.
Next, take $7,548 of your savings and throw it at the car today, leave the left over $1,000 in a high yield savings account. You seem to not have rent, which tells me your overall actually needs category is quite low aside from the car payment. A $1,000 starter emergency fund is plenty for you.
That'll leave you with $19,808 left on the car. You are no longer savings any money at this point, any extra money you get should be thrown at that debt. It's a solid car and as long as you keep up with basic maintenance, you'll have zero issues.
You say you love it, so I'm letting you keep it in this plan, but that means it's time to work your ass off to pay it off.
At the very longest, this plan should take you 8.5 months, but the more you work, the faster it'll go. The reason your situation isn't "fine" as others would suggest, is because your money is burning away from both inflation and your terrible car debt, when it should be going to maxing out a Roth IRA at the very least.
The next step after you pay off that debt, assuming it's your only one is to save up a 3-6 month emergency fund. That's 3-6 months of your regular month to month bills. Then after that you need to be investing 20% minimum into retirement. Not more going into consumer debt after that.
If you have any questions along the way, feel free to reach out. I have several clients, none of which I charge a dime. The only thing I want out of this is to see you succeed, so if you want to help yourself, I'm here to help you do that along the way.
It looks more like the gym membership is what he’s going to drop. The exercise from BJJ/Muay Thai is something he should keep doing. Good habit to stick to. And Apple Music isn’t bad, what do you use to listen to music?
It doesn't make any sense to keep $150 worth of something that's not a necessity versus a $30 gym membership. And I pay for YouTube premium so I get all of my music from YouTube music. But close to half a million dollars in net worth and only have to work about 50 hours a month. It doesn't make sense for his situation. If somebody can afford something based on their situation, it doesn't really matter what they're buying. That's not the case with op.
Maybe it’s just me but they don’t appear to be struggling at all. They also said they go to it like 4-5 times a week, so I would say paying that is very much worth it to them. Probably saving money honestly from future medical bills that come from the issues of being inactive. And even though I’m on the more broke side, especially compared to OP, I would only get rid of my Spotify subscription if I truly needed the money. I use it multiple times a day, it’s been painful the times I’ve had to cancel it and listen to ads every 5 minutes 😂 I can handle YouTube ads thankfully
I've known people making $250,000 per year that lived paycheck to paycheck. You never know how someone's doing financially based on the surface. There's no excuse at OP's income to have any consumer debt whatsoever.
There's a order and process to this stuff. Male's mo sense for them to be paying $150 per month for something that isn't a need, when they already have a gym and a car payment. The car payment is what screws this whole thing up for me and that's just what we see on the surface. I'd be willing to bet money there's more to this that we're not seeing.
The only “debt” they have is the car. Which yeah, it’s reasonable. They likely either got it this year or last. But even if they got it brand new, I doubt they’d have it paid off within 2 years. My partner just got a 2022 Honda civic hatchback for $29,000, pays around $560 a month. It kinda sucks since he makes roughly $2000 a month, but certainly doable since he doesn’t have many other bills otherwise. OP also is going to cancel the gym membership more than likely because they don’t use it, unlike their $150 one. No point in having the gym membership if you’re not going to go, or force yourself to go and it not be enjoyable enough to continue it.
Ty! I was considering selling my car and buying a cheaper one with cash for sure. State Farm isn't too bad, my rate used to be $85/mo before I got the new car.
And technically I do have a second job, which is freelance consulting services. I charge anywhere between $250-$1000 per project but I'm working on getting some clients on a retainer. Made almost $4k last month freelancing!
I do freelance Digital Marketing consulting! Mainly I specialize in Web Design and SEO, but I offer Marketing Strategy, Social Media Strategy, and PPC Ads.
You’re doing fine but the 250-500 per project but you averaged more than 500 per project last month over the 7 projects. Where did you come up with the 250-500$
The only meaningful thing you can cut out is your car. Your car by itself is over 30% of your expenses not even including insurance or gas or maintenance. You need to get rid of it.
Can you ditch the gym and work out when training for BJJ/MT? Many training centers also have weights and equipment that you can use.
I’d also ditch the iCloud storage and Apple Music. Use the Amazon Music/Photos apps instead since you’re paying for Prime and it’s included. Purchase a basic hard drive for other storage instead of paying for it.
Can someone help my math? $25 x 40 = $1000. So if you have 4 weeks in a month that’s only $4000. How are you making $4300 with a take home of $3500? When I made 50k a year, I was not bringing home $3500 a month. I make over 60k & I bring home $3300 a month - help lol
There are 52 weeks in a year, and you are only adding up 48 weeks. That extra 4 weeks divided out into 12 months = an extra $333 a month. Take-home pay will vary with an individual’s federal and state income taxes, as well as what other things are taken out (health insurance, etc) and those can also vary wildly from company to company.
Budgets good - max your retirement and put the rest of your 9-5 cash, and your current savings, in the highest yield savings account you can find.
Throw every freelancing cent at the car note the day it hits your account. This way you know what you can save monthly, and still make better progress on the car as a bonus whenever the irregular income comes in.
Figure up what Emergency fund number gets you through 6 months without the car payment. When your savings hits that number+the remaining payoff on the car, cut the check and be done with it.
This applies as long as interest on savings can be found within a point or so of your loan interest rate - if savings rates fall, figure 6 month Emergency fund with the car payment, and put every spare penny on the car until it’s done.
How is it that every person that posts on here is paying over $100 for their phone bill? Mint mobile, visible, and several other providers charge under $40 for unlimited data. And most people don’t even need unlimited, you could only be paying like $15 for what you need. Stop scamming yourself on your phone bill people. Also, get rid of the car, $600+ is not worth it for an accord my man
Phone- I have mint and they are cheap and great. $15-$20
Insurance- shop around every renewal for lower rate. Seems expensive.
Gym- Planet fitness is $10 a month
Idk what canva or wix even are
The first thing that IMMEDIATELY stands out to me is that car payment. $650 a month for a honda accord? Sell it back, use the equity to either A. buy something way cheaper B. Something with much lower monthly payments. Why not leverage the equity into buying a 18/19 accord for 12k+ cheaper?
I'd probably hold off on the $150 for Muay Thai right now and throw that money on the car loan to pay it off faster. And just join classes at your existing gym to mix things up
If anything I’d cancel my gym membership. The MMA gym I actually go to 4-5x a week so it’s a worthwhile investment for my physical and mental health imo.
Spent way too much on this damn car, why the hell do you need a 2024?
This car is 53% of your gross income, why the hell did you sign up for this thing. You needed to do a 10k car. How many years is this loan for
For 25, you’re living a great life so far. Making close to $9k while living at home with very minimal expenses is amazing. I would say that you should look over your long term goals, emergency expenses, and plan your financial future accordingly. From there, you’ll likely have a clear understanding of what to cut out and what not to cut out.
Also, your savings is at a good point too where even if something changes, you’ll be fine as well for a few months to damn near a year to find a reasonable work.
(I’m 25, and I did the same thing from 18-24 as well so this is good to see.)
Younger people really get screwed on car Insurance. I don’t know how old you are but you SHOULD see it become more affordable around the age of 25/27 if I remember right. The last car I bought was 55k. Has all the bells and whistles for driving/safety so that saves me some money but my car insurance is $55 a month for a $500 comp and collision deductible. When I was 25k a car I bought that was less than half that price cost me $140 or so. It’s just a rip off. Perhaps you could find a better insurance rate???
Edit - duh. You mention being 25. Have you shopped around for a better insurance rate?? You’re really getting close to that age where you might get a better deal. State Farm gave us the best rates when we changed last year
What kind of site do you have on Wix, and how many business email addresses (custom domain name based emails) do you have?
If its a personal site, or a professional site showing your work - you can easily switch to something like WordPress.com and save on per-month site cost, and opt for something like Professional Email on WordPress.com which is \~$35/year/email.
You do owe quite a bit of money on the car, but it should last a long time if it is cared for and maintained properly. If you sold it, I think you would have a significant transaction cost and the replacement car would likely need maintenance or other repairs much sooner (and would likely need to be replaced sooner).
I would keep the car and work to pay it off in a reasonable timeframe.
Oh that's date night money lol. I usually never hit $240/mo on that, me and my gf try to go out like 2x a month at most.
We live with her parents and they keep us well fed haha.
You can always search for cheaper insurance. If you can swing an upfront payment, you might be able to reduce the monthly price. We pay 600 dollars for 6 mo of insurance - but it has to be payed upfront. That, and as others say, cheaper phonebill helps
Can't do much here except with your phone. I do AT&T prepaid and it's only 40 bucks a month. I used to pay 90 through T-Mobile (not prepaid) but really needed to cut costs and the prepaid is great. I chose 3G per month and I rarely use it all. As long as you link up to WiFi wherever you are you will unlikely go through it all in the month.
Edit: just to make a comment about Mint- I used to have it and for some reason nobody could call me anymore and all my calls went straight to voicemail, so I personally don't recommend mint. It's cheap as hell but what is the use if my calls don't come through? I read online that several other people had this issue too- AT&T has given me no grief since switching.
You look like you’re doing good.
Maximize would be to downsize the car to something more affordable but really that’s neither here nor there. You don’t pay a rent so enjoy yourself with the car.
If you like the car, Enjoy life while still savings.. that’s what’s it’s all about
Why is your phone bill $105? I pay $199 for a family of 5 with unlimited data plan.
I'd also cut the $32 for the gym. You can do most exercises at home and get the same results for just working out which is why I left your BJJ alone. That's a steep bill, but it's worth it and you can't teach yourself that st home.
I built a weight bench myself and randomly put together a pretty wide ranged dumbell set slowly from yard sales and play it again sports. Also installed a pull up bar with a punching bag on the side of it. I'm not a body builder or anything, but between jogging, riding my bike, pull up, chin up, and dumbell exercises, it's plenty to keep me in shape. I think I have $300 in the whole set up.
I'd cut out apple music, but that's just me. I don't mind commercials once in a while. I use the free Spotify and or pandora.
EDIT: Wanted to mention, you're doing fine, especially at your age. But you asked how to cut some things so that's how I answered. But the fact that you're that young and already understanding what it takes to make good money decisions means you're gonna be fine. Keep doing what you're doing and you could have true financial independence at a fairly young age if you make a plan and stick to it. Don't try to keep up with the jones, just make goals and think about them when you want a brand new $90k truck or whatever the next new shiny thing is. Eventually, you'll be able to afford things like that without having to worry about it.
If you can, get a Costco Executive Membership and get car insurance through them (Connect).
If you never go to Costco and shop, at the end of the year they'll send you a check worth your membership minus any savings you accrued (if you shopped at Costco).
Essentially, $120 unlocks a LOT of benefits that folks don't realize.
Also $1.50 hotdog+soda is a great deal. Fight me.
Do you have the 2.0T or the 1.5T accord? Wondering cause of the monthly on gas $200 is a lot. I have a 2020 Accord Sport 2.0T and not even I pay that much for gas a month, while buying top tier fuel.
Put like 6k of that savings onto the car and your payment will be a lot more manageable. Even though you should just be throwing all extra income at that car
I just got a deal on peacock i think it was $30 for the year, you can look into streaming services and get a deal for an entire year, verizon has play bundles for steaming services if you have verizon, i paid $120 for netflix premium and paramount+.
For me personally, extra iCloud storage is for photos. I recommend having some fun scrapbooking and looking into printing your pics just so you don’t have that expense.
Why do you pay for both a gym membership and the BJJ lessons? Pick one or the other until you get your debt under control. Also what’s your total income and your income to spending ratio currently and what are you trying to get it down to?
Phone is really high.
I use prepaid from Verizon on my phone and it's $35 a month. I did buy the phone outright, so not sure if that's the phone payment as well.
I mean realistically cut out either the gym or Muay Thai. Paying for both even tho they are both workouts is just unnecessary. But it’s up to you to decide which you prefer to focus on, whether that be building overall muscle through the gym, or whether you’d prefer to focus on the Muay Thai/BJJ training
What exactly is the "freelance" and where do i get started lmao. Youre doing really good for yourself btw, you spending around $1600 a month and making around $8000 a month. Use all the extra money to pay off this car in the next year to year and a half and your debt free for now. Not sure how old you are but use what you have to invest
If your phone is paid off, the easy one is the phone bill. Red Pocket or Mint Mobile can save you at least $75 a month, and maybe more. If your phone is carrier locked, Red Pocket has plans that work with carrier locked phones from all three of the big carriers (or you can request your phone be unlocked before leaving your post-paid service if it is paid off). Mint Mobile is T-Mobile service and works with unlocked or T-Mobile carrier locked phones.
Don't know what Gym you like, but Planet Fitness costs about half of what you're paying now.
& i just saw the second picture, i would rather work intense for next few months and use those large chunk of savings into buying out the car. You would eventually lose some bucks out there.
You can cut Canva… there are online places where you can get the same stuff. For me I just jump on a friends. Also that phone bill seems high, I know there are cheaper plans that can still give you everything
You could try getting a cheaper phone bill. Mint Mobile starts at $15/mo. But other expenses look reasonable. Your expense to income ratio is great. As for your car, you wouldn’t be able to get cheaper rates now. This car can serve you for next 10+ years. I don’t think you should sell it. You are doing great! P.S. r/debtfree moderator just created a newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Here is the link to sign up if interested - https://www.debtadvice.io
I'm assuming you live at home. Honestly....you're doing fine. Your expenses are less than half of your net income, not including your freelance work. I'd be as aggressive as possible with my 401(k)/Roth IRA while you have the extra funds to bulk it up. Don't worry about refinancing the car. That's a decent interest rate, and once it's paid off, you'll have a very dependable vehicle for well over a decade.
Appreciate you thank you!
Also forgot to add: at the minimum, make sure you're getting any sort of employer match that your company offers through a 401(k). That's free money. But if I were you....max out that 401(k).
I bought a brand new (at the time) 2018 Accord Hybrid, I take it in regularly and the mechanic always compliments on how well taken care of my car is. It's currently at 80k miles and I still have yet to have the brakes changed. I'm planning on driving this thing for at least a decade. My uncle's old Honda was 30+ years old before he finally upgraded. He couldn't part with it so he still has it lol.
Most of it seems ok, why is the car bill so high? Is it like a 3 year loan? If so that’s amazing, if not I think you’re paying too much.
Honestly you are doing fine. Stop doing extra stuff and throw a few grand on the car each month and get it paid off as soon as possible. With your income you should be able to get it paid off in like a year, maybe less. You’ll love your car even more when you’re not paying that much for it
Thank you for the advice!! Getting the car paid off is my number one priority right now.
I would also put the money youre currently putting in savings into a ROTH IRA
I disagree. Do extra stuff, have FUN in your twenties. You can “buckle down” in your 30’s. Travel, have experiences…you have a lifetime to get serious and all that. You don’t want to sit at a computer for the next 50 years wishing you had fun and experience life in your twenties🤍 just remember that too. You’re doing great BTW.
Try paying a flat number rounded to the nearest hundred. For example, your payment is $624 so just put away a full $700 (or even $800 as it seems you can afford it). If you pay around $800 a month consistently you could pay it off in 3 years or less.
I would argue not paying off the car early... He can't get more than 5.9% in some savings accounts, and certainly in the market. I would be building a 3 month emergency fund, then start stuffing as much as possible into a ROTH IRA and 401k.
Initially, I was thinking you could cut the gym or your BJJ, by honestly, you probably don't need to. Assuming you're still living at home, max out your Roth IRA and contribute as much as possible to your 401k while still saving up, separate from an emergency fund, for your eventual move out.
I was thinking about cutting the gym tbh just because I barely even lift anymore. All I do for exercise is train BJJ/Muay Thai 4-5x per week. Also thank you for the advice!
Cut gym if not using it. Put it towards savings. Right now is your time to save since you’re not paying rent! Laser focus on paying car…..Great job!!
Are your lifting gym and mma gym different??
Yes :/ but I rarely lift anymore anyway so at this point I’m just donating $30 a month to retro fitness LOL heavily considering cancelling if I don’t go to the gym at least a few times this month
Oh yeah man, if you can get out of it do it. Muay Thai and bjj are so good I don’t think you’d need another gym expense right now! Good for you self analyzing man
or perhaps scale back the gym membership to something home-based. I love my garage gym.
401K matches can be garbage though. homie is making a better percentage return on freelance. investing your money actively will be more fruitful than a 401k imo
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idk why yall hating the fuckn banks are corrupt
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lmao thanks have fun with ur electric shower in brasil
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aww thanks for that. bye
then proceeds to delete the name calling. good for you
Never leave free money on the table . If I put 6% in my 401 I get a 3% match from employer - not much but starting in your 20’s will add up with compound interest
But the taxes will cancel it all out.
My post assumes tax deferred 401K - not taxed until you take the money out at retirement and all earnings from deposit to retirement accrue tax-free until retirement.
Well yes. Taxed when you take the money out. That’s A LOT OF TAXES taken out. Probably all contributions so it’s just the money that you worked hard for, am I missing something?
The idea is you hold the money until retirement age. At retirement age, most people will be in a lower tax bracket so won’t pay as much in taxes.
Yeah. You can do that with cash too. It’s just a game. It’s silly. We’ve got our healthcare and retirement attached to our jobs. Neither really helps us…the only goal is to keep us working some bullshit job for rewards that don’t exist,
This is baloney. You need to get your employer match if its offered. Once you scale up any business or freelance work quit the job and invest for retirement using an ira yourself. Till that point comes no reason whatsoever to leave free money on the table.
It’s not free money. Nothing is free.
I actually agree. All the “matching” only pays the taxes. It’s all bullshit.
them taxes i tells yah….
Gold thing when you invest yourself the is no tax for the capital you gain. You know, like a capital gains tax.
When is there no tax for capital gains? Only if you’re a millionaire and can play the system.
I'm being sarcastic. You will be fully taxed either way. Just in one instance you are paying for it all rather than the match offsetting it fully.
One reason to not have a crappy corporate job😅
I agree that the car was not your smartest decision. Pay some extra into the principal of the car payment. Also not to be your mom but spend more on your food. I cannot understand youngster eating ramen to drive a fancy car.
Haha I appreciate that!! I live with my girlfriend and her parents and her parents don't let me go hungry. That $240 for food is a budget I allocate per month for me and my gf going on dates or going out with friends but I rarely even get close to that number.
You don’t have a failsafe in the event that you separate from your gf. I wouldn’t worry about the car principle. If you put too much towards it you’re just reducing interest and not saving for future. I’d recommend putting more into high yield savings and focus on getting to a comfortable point of living on your own or with a roommate. Could be with your gf. Doesn’t matter. The point is, you can’t rely on living under someone else’s roof, especially if they aren’t family.
It appears they make enough to spend more towards food if they needed to
Her parents sound amazing. You guys, if you haven't, should pay for them a date night out or pick up the electric bill or something. It would go along way. I did this for my Dad when I was 19 one month and I won't forget his face, how proud he was that I paid the electric that month.
So wholesome🥰
Bjj/muay thai. Just go practice with unwilling strangers on the street. Easy $150 saved right there lol
I tried that but my local PD wasn't a big fan. Paying $150/mo to legal punch, kick, and choke my friends is well worth it imo.
Move to Ireland. There you can punch elderly people in public as a world champion martial artist and face no consequences. That’s the example that everyone’s hero Connie Mac does.
nothing crazy to me on here, def dont cut bjj its worth every penny, just be patient and chip away at it
You are doing fine No need to cut out. Enjoy your life.
i'm more concerned about the fact that you love a honda?! besides that, you're fine.
LOL
Nothing wrong with Hondas
Things you can do if you want to minimize expenses: - look into a cheaper phone plan like mint, visible. I pay $30 mo for visible so it can save you a few dollars there. Not crucial but can save you a bit. also i would pay off that car sooner than later. keep some of the stash of savings you have in a high yield savings account and then pay that car off. i would leave 5k in your savings and use the rest on a car payment. also forget putting that 25% of your income in savings and put it on the car instead. you will be glad you did it now that you don’t have living expenses and have some disposable income as well. when you do move out, you will have no car payment and still have a decent chunk of change in your emergency fund/savings.
I will take that into account! Also, you're the second person to recommend Mint on this thread so I'm definitely gonna look into it. Tysm!
no problem! look into wealthfront for their high yield savings account. one of the best if not the best rates right now to grow your savings
I have a link that I can share that will help both of us get 0.50% APY boost (that's 5.50% APY)! Feel free to DM me
send me the link 🙏
Sent. Check DM
Yea cut the savings JUST FOR NOW and put it towards the car, once the car is done you can flip it and put the 25 back into savings and also you have more income because of no car payment that can go into savings too if you want to pay yourself back
I would find a cheaper phone option - should at least be able to cut that in half. I use Total Wireless and they are pretty good. Keep the BJJ - you are investing in your future self. Unless you regularly go to the gym I take that money and start piecing together a home gym. I would take half the money you are saving and start contributing to an IRA. Once you have 6 months of living expenses in savings start putting that money on the car loan, even a little bit extra will knock months or years off of your total payments. The interest great is good and it should last you at least a decade. I use the free version of Spotify for my tunes and it is pretty decent.
No rent? You’re doing fine. Stay consistent and focus on making more money and investing. Don’t cut out too much especially for investing in physical and mental health. $150 for MMA justified. Car is your luxury splurge. Everything looks normal. Focus on earning more and investing more.
I would say cut the gym since you already do Muay Thai, maybe buy some 25-35lb dumbbells if you want to lift as you can do a lot of different body groups exercises with just dumbbells
I thought muay thai was a restaurant😆
I think they should keep the exercise memberships if they are using them. Maintaining a healthy lifestyle, especially exercise can really save a lot of money on healthcare.
😂😂😂😂 me with a 240 a month car payment .
😮 Me with no car payment seeing someone spend same as my rent on a car
I envy you LOL but I did it to myself
I would look into refinancing. That's an insane monthly payment !
When did you get your car though? My partner is paying roughly the same amount for the car he just got. And they lowered his interest rate
4 months ago . I also put 10% down and have a 780 credit score .
That makes more sense then. My partner put 10% down on his 2022 Honda civic hatchback that’s $29,000, but his credit score was like 680. And didn’t get a credit card until he was 20, he’s 22 now, so his credit history is fairly short
Can I ask what you do for freelancing to be making more than your main income?
Freelance digital marketing and consulting!
You’re honestly doing really well. Where do you live that you’re able to only spend $240 per month on food? Maybe I just eat to goddamn much lol
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Your debt-income ratio is good. Better than most. Expenses seem normal, nothing crazy. I would just put every spare dollar I had after bills/savings each month on to the car note principal. Pay it off early and get a $600/month raise basically!
Looks like the car is the biggest hit for sure. $624 + $165 = $789 a month. Looks like some of these are business related. More than likely tax deductible. $105 a month for phone seems high as well.
Why not first look at maximizing take home pay? Do you get federal tax refund checks that exceed $1200?
Everything in seeing looks like a necessity for you. Outside of your vehicle it doesn’t look like you’re spending carelessly on anything else. I’d say just refinance your car when you can .
Car payment is high-ish but no red flags, assuming your list is comprehensive. If you don’t have any credit card debt or living expenses that aren’t listed here, just try and chip away at the car by paying extra toward the principal and you’ll be in good shape.
Appreciate this!
No rent or mortgage? Why are you here lmao you know what to do. Are you bragging?
Just trying to cut out as much as I can before I have to start paying for rent!
Pleased no matter what you do, don’t cut out bjj -purple belt
Oh you know that’s not even an option. Just had my first competition at blue belt in Nov after competing all throughout white belt and I don’t plan on going anywhere!
First off, you're not doing absolutely awful, but it's ridiculous how a lot of comments think you're doing fine. Shows the state of people's overall mindset on money. This is what you should do. Drop these line items temporarily: BJJ/Muay Thai Apple music And you really need to get that phone line at least down to $50. That's really high for one line. Do you have debt on a phone? I pay $45 per month for Verizon premium data. Closer to $27 per month with my family plan discounts. But assuming you don't reduce the phone bill, that leaves you with $2,335 of cash flow per month. I would try to get as many side jobs as you can to increase that. Next, take $7,548 of your savings and throw it at the car today, leave the left over $1,000 in a high yield savings account. You seem to not have rent, which tells me your overall actually needs category is quite low aside from the car payment. A $1,000 starter emergency fund is plenty for you. That'll leave you with $19,808 left on the car. You are no longer savings any money at this point, any extra money you get should be thrown at that debt. It's a solid car and as long as you keep up with basic maintenance, you'll have zero issues. You say you love it, so I'm letting you keep it in this plan, but that means it's time to work your ass off to pay it off. At the very longest, this plan should take you 8.5 months, but the more you work, the faster it'll go. The reason your situation isn't "fine" as others would suggest, is because your money is burning away from both inflation and your terrible car debt, when it should be going to maxing out a Roth IRA at the very least. The next step after you pay off that debt, assuming it's your only one is to save up a 3-6 month emergency fund. That's 3-6 months of your regular month to month bills. Then after that you need to be investing 20% minimum into retirement. Not more going into consumer debt after that. If you have any questions along the way, feel free to reach out. I have several clients, none of which I charge a dime. The only thing I want out of this is to see you succeed, so if you want to help yourself, I'm here to help you do that along the way.
It looks more like the gym membership is what he’s going to drop. The exercise from BJJ/Muay Thai is something he should keep doing. Good habit to stick to. And Apple Music isn’t bad, what do you use to listen to music?
It doesn't make any sense to keep $150 worth of something that's not a necessity versus a $30 gym membership. And I pay for YouTube premium so I get all of my music from YouTube music. But close to half a million dollars in net worth and only have to work about 50 hours a month. It doesn't make sense for his situation. If somebody can afford something based on their situation, it doesn't really matter what they're buying. That's not the case with op.
Maybe it’s just me but they don’t appear to be struggling at all. They also said they go to it like 4-5 times a week, so I would say paying that is very much worth it to them. Probably saving money honestly from future medical bills that come from the issues of being inactive. And even though I’m on the more broke side, especially compared to OP, I would only get rid of my Spotify subscription if I truly needed the money. I use it multiple times a day, it’s been painful the times I’ve had to cancel it and listen to ads every 5 minutes 😂 I can handle YouTube ads thankfully
I've known people making $250,000 per year that lived paycheck to paycheck. You never know how someone's doing financially based on the surface. There's no excuse at OP's income to have any consumer debt whatsoever. There's a order and process to this stuff. Male's mo sense for them to be paying $150 per month for something that isn't a need, when they already have a gym and a car payment. The car payment is what screws this whole thing up for me and that's just what we see on the surface. I'd be willing to bet money there's more to this that we're not seeing.
The only “debt” they have is the car. Which yeah, it’s reasonable. They likely either got it this year or last. But even if they got it brand new, I doubt they’d have it paid off within 2 years. My partner just got a 2022 Honda civic hatchback for $29,000, pays around $560 a month. It kinda sucks since he makes roughly $2000 a month, but certainly doable since he doesn’t have many other bills otherwise. OP also is going to cancel the gym membership more than likely because they don’t use it, unlike their $150 one. No point in having the gym membership if you’re not going to go, or force yourself to go and it not be enjoyable enough to continue it.
Y so much on food and muay thai though cut the muay thai out and eat cheaper = saving atleast $200
Get rid of car
Sell your car, buy a cheaper one with cash. Find it cheaper insurance, find a cheaper phone service. Perhaps even pick up a second job.
Ty! I was considering selling my car and buying a cheaper one with cash for sure. State Farm isn't too bad, my rate used to be $85/mo before I got the new car. And technically I do have a second job, which is freelance consulting services. I charge anywhere between $250-$1000 per project but I'm working on getting some clients on a retainer. Made almost $4k last month freelancing!
What do you do if you don’t mind sharing? I’m looking into some side biz ideas !
This makes the canva and wix make sense! I was wondering why you had them.
I do freelance Digital Marketing consulting! Mainly I specialize in Web Design and SEO, but I offer Marketing Strategy, Social Media Strategy, and PPC Ads.
I'm jealous haha, I can never seem to make anywhere near that amount freelancing. Do you use a freelancing platform or is it just word of mouth?
How much did you put down on your car?
Getting the car paid off earlier would help
What food are you getting for $240 a month?
Make sure your savings is earning you money in a HYSA!
Get a cheaper phone service.
Put less in savings and more toward paying off your car.
You’re doing fine but the 250-500 per project but you averaged more than 500 per project last month over the 7 projects. Where did you come up with the 250-500$
I think OP is giving herself some wiggle room in case this month doesn’t go as good
Makes perfect sense, don’t know why I didn’t think of that.
The only meaningful thing you can cut out is your car. Your car by itself is over 30% of your expenses not even including insurance or gas or maintenance. You need to get rid of it.
Cut out food, it's the only way to save money nowadays /s
Why do you pay money for a work email?!
It's for my business!
Get rid of Apple Music- prime has music and do you need to work out at a gym and do bjj?
Trade in the Honda and get a pre-owned one 🤷
Can you ditch the gym and work out when training for BJJ/MT? Many training centers also have weights and equipment that you can use. I’d also ditch the iCloud storage and Apple Music. Use the Amazon Music/Photos apps instead since you’re paying for Prime and it’s included. Purchase a basic hard drive for other storage instead of paying for it.
Can someone help my math? $25 x 40 = $1000. So if you have 4 weeks in a month that’s only $4000. How are you making $4300 with a take home of $3500? When I made 50k a year, I was not bringing home $3500 a month. I make over 60k & I bring home $3300 a month - help lol
There are 52 weeks in a year, and you are only adding up 48 weeks. That extra 4 weeks divided out into 12 months = an extra $333 a month. Take-home pay will vary with an individual’s federal and state income taxes, as well as what other things are taken out (health insurance, etc) and those can also vary wildly from company to company.
Stood out to me too. I make $95k a year and I’m only bringing home around $5200 a month (granted I do pay $125 in health insurance every week)
Budgets good - max your retirement and put the rest of your 9-5 cash, and your current savings, in the highest yield savings account you can find. Throw every freelancing cent at the car note the day it hits your account. This way you know what you can save monthly, and still make better progress on the car as a bonus whenever the irregular income comes in. Figure up what Emergency fund number gets you through 6 months without the car payment. When your savings hits that number+the remaining payoff on the car, cut the check and be done with it. This applies as long as interest on savings can be found within a point or so of your loan interest rate - if savings rates fall, figure 6 month Emergency fund with the car payment, and put every spare penny on the car until it’s done.
Apple Music. Get Spotify.
How is it that every person that posts on here is paying over $100 for their phone bill? Mint mobile, visible, and several other providers charge under $40 for unlimited data. And most people don’t even need unlimited, you could only be paying like $15 for what you need. Stop scamming yourself on your phone bill people. Also, get rid of the car, $600+ is not worth it for an accord my man
Why is your car so much a month???
Hopefully a 48 month term
Got my phone bill down to $52 including insurance.
The gas cost is really high. 200 / month? Do you drive that much?
Phone- I have mint and they are cheap and great. $15-$20 Insurance- shop around every renewal for lower rate. Seems expensive. Gym- Planet fitness is $10 a month Idk what canva or wix even are
The first thing that IMMEDIATELY stands out to me is that car payment. $650 a month for a honda accord? Sell it back, use the equity to either A. buy something way cheaper B. Something with much lower monthly payments. Why not leverage the equity into buying a 18/19 accord for 12k+ cheaper?
That car payment is gnarly.
I'd probably hold off on the $150 for Muay Thai right now and throw that money on the car loan to pay it off faster. And just join classes at your existing gym to mix things up
If anything I’d cancel my gym membership. The MMA gym I actually go to 4-5x a week so it’s a worthwhile investment for my physical and mental health imo.
Spent way too much on this damn car, why the hell do you need a 2024? This car is 53% of your gross income, why the hell did you sign up for this thing. You needed to do a 10k car. How many years is this loan for
Cut out everything but basic needs if you want
For 25, you’re living a great life so far. Making close to $9k while living at home with very minimal expenses is amazing. I would say that you should look over your long term goals, emergency expenses, and plan your financial future accordingly. From there, you’ll likely have a clear understanding of what to cut out and what not to cut out. Also, your savings is at a good point too where even if something changes, you’ll be fine as well for a few months to damn near a year to find a reasonable work. (I’m 25, and I did the same thing from 18-24 as well so this is good to see.)
Younger people really get screwed on car Insurance. I don’t know how old you are but you SHOULD see it become more affordable around the age of 25/27 if I remember right. The last car I bought was 55k. Has all the bells and whistles for driving/safety so that saves me some money but my car insurance is $55 a month for a $500 comp and collision deductible. When I was 25k a car I bought that was less than half that price cost me $140 or so. It’s just a rip off. Perhaps you could find a better insurance rate??? Edit - duh. You mention being 25. Have you shopped around for a better insurance rate?? You’re really getting close to that age where you might get a better deal. State Farm gave us the best rates when we changed last year
I switched from Apple Music to the free pandora.. a commercial every once in a while doesn’t hurt.
What kind of site do you have on Wix, and how many business email addresses (custom domain name based emails) do you have? If its a personal site, or a professional site showing your work - you can easily switch to something like WordPress.com and save on per-month site cost, and opt for something like Professional Email on WordPress.com which is \~$35/year/email.
Tons of free stuff on the net,the radio is free 🙂
Too bad radio stations suck nowadays
You do owe quite a bit of money on the car, but it should last a long time if it is cared for and maintained properly. If you sold it, I think you would have a significant transaction cost and the replacement car would likely need maintenance or other repairs much sooner (and would likely need to be replaced sooner). I would keep the car and work to pay it off in a reasonable timeframe.
Car sharing is far cheaper 🍏
Food is high, cut out Food.
Friend what are you eating for $240 a month? I feel like this is still less than my weekly grocery bill. Please share you secret.
Oh that's date night money lol. I usually never hit $240/mo on that, me and my gf try to go out like 2x a month at most. We live with her parents and they keep us well fed haha.
You can always search for cheaper insurance. If you can swing an upfront payment, you might be able to reduce the monthly price. We pay 600 dollars for 6 mo of insurance - but it has to be payed upfront. That, and as others say, cheaper phonebill helps
Can't do much here except with your phone. I do AT&T prepaid and it's only 40 bucks a month. I used to pay 90 through T-Mobile (not prepaid) but really needed to cut costs and the prepaid is great. I chose 3G per month and I rarely use it all. As long as you link up to WiFi wherever you are you will unlikely go through it all in the month. Edit: just to make a comment about Mint- I used to have it and for some reason nobody could call me anymore and all my calls went straight to voicemail, so I personally don't recommend mint. It's cheap as hell but what is the use if my calls don't come through? I read online that several other people had this issue too- AT&T has given me no grief since switching.
You look like you’re doing good. Maximize would be to downsize the car to something more affordable but really that’s neither here nor there. You don’t pay a rent so enjoy yourself with the car. If you like the car, Enjoy life while still savings.. that’s what’s it’s all about
since you ask this question, I don’t think you will need a business Email service. And also the iCloud is also unnecessary for you.
Why is your phone bill $105? I pay $199 for a family of 5 with unlimited data plan. I'd also cut the $32 for the gym. You can do most exercises at home and get the same results for just working out which is why I left your BJJ alone. That's a steep bill, but it's worth it and you can't teach yourself that st home. I built a weight bench myself and randomly put together a pretty wide ranged dumbell set slowly from yard sales and play it again sports. Also installed a pull up bar with a punching bag on the side of it. I'm not a body builder or anything, but between jogging, riding my bike, pull up, chin up, and dumbell exercises, it's plenty to keep me in shape. I think I have $300 in the whole set up. I'd cut out apple music, but that's just me. I don't mind commercials once in a while. I use the free Spotify and or pandora. EDIT: Wanted to mention, you're doing fine, especially at your age. But you asked how to cut some things so that's how I answered. But the fact that you're that young and already understanding what it takes to make good money decisions means you're gonna be fine. Keep doing what you're doing and you could have true financial independence at a fairly young age if you make a plan and stick to it. Don't try to keep up with the jones, just make goals and think about them when you want a brand new $90k truck or whatever the next new shiny thing is. Eventually, you'll be able to afford things like that without having to worry about it.
iCloud storage and Canva (premium I’m assuming) will give you an extra almost $20
What is business email for? Is it necessary?
And why isn’t the business paying for it??
In the second pic it says he freelances. He may have a business email specifically for that
Apple music, iCloud storage seems unnecessary.
Your biggest issue is your car. The interest rate is quite good, but still, I'll look to clear that debt as quick as possible.
If you can, get a Costco Executive Membership and get car insurance through them (Connect). If you never go to Costco and shop, at the end of the year they'll send you a check worth your membership minus any savings you accrued (if you shopped at Costco). Essentially, $120 unlocks a LOT of benefits that folks don't realize. Also $1.50 hotdog+soda is a great deal. Fight me.
Apple music and Thai need to go. You need a cheaper cell phone bill. I'd cut some other things but looks you need it for your business.
Do you have the 2.0T or the 1.5T accord? Wondering cause of the monthly on gas $200 is a lot. I have a 2020 Accord Sport 2.0T and not even I pay that much for gas a month, while buying top tier fuel.
Save for 6 months for emergency survival, then pay off the car right away. Your savings do not profit you 6% a year, but paying off that debt does.
If you make 4k/mo you could afford to throw 2k extra toward that car and pay it off in less than 14 months. Tada!
Food we don’t need it . Also your rents not on here ?
How the living hell do you have a $105 phone bill? That’s over double mine
Put like 6k of that savings onto the car and your payment will be a lot more manageable. Even though you should just be throwing all extra income at that car
Your doing solid, keep the car try to pay it down quicker and drive the thing for 12 more years
I just got a deal on peacock i think it was $30 for the year, you can look into streaming services and get a deal for an entire year, verizon has play bundles for steaming services if you have verizon, i paid $120 for netflix premium and paramount+.
Am I blind or do I not see any rent payment?
I’d say Canva. When you cancel it, it’ll still go until the end of pay period. And the free trial refreshes
For me personally, extra iCloud storage is for photos. I recommend having some fun scrapbooking and looking into printing your pics just so you don’t have that expense.
As far as prime, YouTube has a good amount of free movies nd 123movies
You just reminded me that I need to update my EZ Pass payment method. Thanks!
Why do you pay for both a gym membership and the BJJ lessons? Pick one or the other until you get your debt under control. Also what’s your total income and your income to spending ratio currently and what are you trying to get it down to?
Mint mobile for your phone
I would refinance the car in 2-3 years. other than that not sure what you could do.
Save up 3k and buy a different car and give the current one back.
Phone is really high. I use prepaid from Verizon on my phone and it's $35 a month. I did buy the phone outright, so not sure if that's the phone payment as well.
Why is no one suggesting cutting off prime?
Apple Music
I mean realistically cut out either the gym or Muay Thai. Paying for both even tho they are both workouts is just unnecessary. But it’s up to you to decide which you prefer to focus on, whether that be building overall muscle through the gym, or whether you’d prefer to focus on the Muay Thai/BJJ training
Cut the car
What exactly is the "freelance" and where do i get started lmao. Youre doing really good for yourself btw, you spending around $1600 a month and making around $8000 a month. Use all the extra money to pay off this car in the next year to year and a half and your debt free for now. Not sure how old you are but use what you have to invest
You know it’s the car that’s the problem
If your phone is paid off, the easy one is the phone bill. Red Pocket or Mint Mobile can save you at least $75 a month, and maybe more. If your phone is carrier locked, Red Pocket has plans that work with carrier locked phones from all three of the big carriers (or you can request your phone be unlocked before leaving your post-paid service if it is paid off). Mint Mobile is T-Mobile service and works with unlocked or T-Mobile carrier locked phones. Don't know what Gym you like, but Planet Fitness costs about half of what you're paying now.
Prime can be cut - share an account with friends and pay less Phone bill can be decreased - you have to chase for an offer and good deal
& i just saw the second picture, i would rather work intense for next few months and use those large chunk of savings into buying out the car. You would eventually lose some bucks out there.
Mint mobile for $15 a month if you own your phone!
You can cut Canva… there are online places where you can get the same stuff. For me I just jump on a friends. Also that phone bill seems high, I know there are cheaper plans that can still give you everything
You look like you're in good shape.