Anxiety Spending Money

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cjwarri0r
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Anxiety Spending Money

Post by cjwarri0r » Mon Jul 02, 2018 10:59 pm

I'm 23. I have a degree in Finance and making a yearly salary of 45k. Actively looking to increase this. (first year working within my degree)

I have about 25k saved up. from previous jobs and side hustles
- 20k cash ******* (correction)
- 5k stocks

I have 30k of student loan debt - I start making payments next month. Average interest on all loans is about 5%.

I am very calculated with how I spend and I am taking advantage of the fact that I'm still living with my parents so I have no real expenses yet.
^^^^^^^^Just to add context ^^^^^^^^^

At the end of every month, I create an excel spreadsheet of my monthly income and expenses.

I'm caught in an emotional battle with myself: I'm trying to be responsible by paying off my debt as quickly as possible while also saving and increasing my income by any means. To supplement my low income, I've been selling items on eBay and Amazon for about a year, doing odd jobs on the weekend, taking part in paid study groups, etc. Sometimes I'll be cheap and not feed myself enough for lunch just to save a few bucks.

It is not fun living like this

I want to enjoy my money sometimes as well....nothing extravagant. At the same time, I want to be responsible, save my money, eliminate my debt, rebuild that capital, and finally carve the path of building my wealth; I'm dying to get into real estate but this loan is looming over my head and stresses me out because it feels like its putting my life on hold. I want to put money in my 401k, but this loan is stressing me out. I want to treat my girlfriend sometimes, but the anxiety of unnecessarily spending money slaps me in the face.

I know I'm being a bit dramatic but it seriously stresses me out and sometimes I feel stuck. Maybe I'm impatient.

Anyone have any input or words of wisdom to a kid just trying to build his wealth and eliminate the stress of worrying about money in the long run?
**********************************
I appreciate everyone's replies and genuine words of wisdom/advice. To just answer a few things:

My employer currently does NOT match
I own my car and it costs me very little money in maintenance every year.
I understand real estate may not be the wisest...guess the idea of monthly cash flow sounds attractive to me
I'm not exactly thrilled about the idea of getting my masters, I hated school. Unless my employer pays for it partially, I probably would not do that.
I'm located just outside of NYC
Last edited by cjwarri0r on Wed Jul 04, 2018 6:48 pm, edited 1 time in total.

chattyanne
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Re: Anxiety Spending Money

Post by chattyanne » Wed Jul 04, 2018 8:39 am

I smile at your name CJ. I wonder if you meant CJ worrier or CJ Warrior. Hopefully you see yourself as a Warrior. :sharebeer

Congrats with completing your studies and landing a position in the same field. First I want to ask you to erase "low income" from your vocabulary. It is really how we see ourselves and our situation. You are very wealthy. You have the opportunity to start knocking down that loan w/o other expenses. There is huge wealth in that, so I ask you, please take advantage of it and be grateful. At your age I was sharing rent, working in a low wage ($10.00 hr) factory, going to night school, which took 4 years just to get an Associates in Business Management degree which then I had to pay for. It was tough, especially when all of my friends were doing, going, buying and being.

You mentioned you have approx. 25k saved up and show 15k cash and 5k stocks = 20k. Where is the other 5k? Just curious.

Good job with the spreadsheet of monthly funds and budgeting. The main life saver for me was a program called YNAB, which I have the classic version meaning I paid approx. $30 once and it keeps going like the energizer bunny. I don't think they offer the classic anymore, I'm unsure but the main point is to get yourself a month in advance. (I totally can't explain it like they can) Basically, all of this months income is for next months budget. By doing this you have much wiggle room and have time for adjustments. This gets you away from living check to check and even month to month. Check them out and take time to learn. You can totally do this w/ your own spreadsheet. I think this will make it easier for you to budget some money for yourself which will include your friends. I wish I had this when I was your age.

You mentioned, "Sometimes I'll be cheap and not feed myself enough for lunch to save a few bucks.", how are you going to think straight and stay focused when your not feeding yourself? Food is the nutrients to our mind and body. Where I live lunch meat, salad, and fruit isn't that expensive. I have always made my lunch to take to work and I watch everybody else go out for lunch. I get a head of lettuce, tomatoes, green/yellow/red pepper, carrots, chop them up and put in a large bowl which will last me a week. Eat well if you want a strong mind.

It does take patients and purpose. Figure out realistically how long you want to take to payoff that loan and when you have extra money you can knock it down quicker. I do think it's important to have a fun fund for yourself in your budget. I give myself $100 a month and if I don't spend it all then the balance transfers to the next month etc. Eventually I will spend it all on a fun spree or move the extra elsewhere...savings or investments.

Honestly, I think you are on the right track. You may have a degree in Finance but you are in the right place to become an expert in finance.

I understand that you are "dying" to get into real estate. Remember this one thing, if you get a loan for property, the banker is still the landlord but they don't have to fix anything...you do. The banker "landlord" will be happy to give you a loan to fix things that break down but you won't see them step foot on your property to help out. I only say this because so many of us have gotten mortgages and then turn around and say we "own" our own home. I think we are taught this. Just see it for what it is. When we are young (including my young self), we think we "made it" when we get a nice car, or we "made it" when we purchased real estate, or "made it" when...

I am 47 yrs old
Income approx. 33k (the most I have ever made)
Debt free including a very lovely home and property
Take note: I couldn't live in California very well w/ my same income. Where we live makes a difference.
Just learning about retirement. I did things the hard way.

You're not stuck. You didn't get your degree in one day. I think you're on the right track, especially by asking others for opinions. Keep reading, learning, searching and don't feel like you have to live like others by buying worthless stuff. Sorry, this got lengthy and I wasn't able to give specific direction other than encouragement. I tend to have a lot to say when I hear people say they have "low income". Face it, you make more than me and I think that's awesome! :happy

You are CJ...our future Warrior!

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BL
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Re: Anxiety Spending Money

Post by BL » Wed Jul 04, 2018 8:56 am

What interest rates are your student loans? If high, you will want to get them paid off soon, or at least try to get a lower rate.

There may be a trade-off between paying down loans and investing in 401k or Roth IRA. I would at least plan to invest enough to get a match if offered at work. Real estate can wait, at least until you have a positive net worth.

Consider networking with professional organizations and things like LinkedIn.

Bring a healthy lunch to work. Use savings to have inexpensive experiences like hiking, biking, walking, an occasional eating out or picnic, etc. Learn to cook some basics.

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ruralavalon
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Re: Anxiety Spending Money

Post by ruralavalon » Wed Jul 04, 2018 9:07 am

Welcome to the forum :) .

Congratulations on completing your degree, and starting your job. It's good that you are living frugally.

cjwarri0r wrote:
Mon Jul 02, 2018 10:59 pm
I'm 23. I have a degree in Finance and making a yearly salary of 45k. Actively looking to increase this. (first year working within my degree)

I have about 25k saved up. from previous jobs and side hustles
- 15k cash
- 5k stocks

I have 30k of student loan debt - I start making payments next month.

I am very calculated with how I spend and I am taking advantage of the fact that I'm still living with my parents so I have no real expenses yet.

^^^^^^^^Just to add context ^^^^^^^^^

At the end of every month, I create an excel spreadsheet of my monthly income and expenses.

I'm caught in an emotional battle with myself: I'm trying to be responsible by paying off my debt as quickly as possible while also saving and increasing my income by any means. To supplement my low income, I've been selling items on eBay and Amazon for about a year, doing odd jobs on the weekend, taking part in paid study groups, etc. Sometimes I'll be cheap and not feed myself enough for lunch just to save a few bucks.

It is not fun living like this

I want to enjoy my money sometimes as well....nothing extravagant. At the same time, I want to be responsible, save my money, eliminate my debt, rebuild that capital, and finally carve the path of building my wealth; I'm dying to get into real estate but this loan is looming over my head and stresses me out because it feels like its putting my life on hold. I want to put money in my 401k, but this loan is stressing me out. I want to treat my girlfriend sometimes, but the anxiety of unnecessarily spending money slaps me in the face.

I know I'm being a bit dramatic but it seriously stresses me out and sometimes I feel stuck. Maybe I'm impatient.

Anyone have any input or words of wisdom to a kid just trying to build his wealth and eliminate the stress of worrying about money in the long run?
I suggest not buying real estate as an investment.

Does your 401k offer good low expense ratio funds? What are the 4-5 funds offered with the lowest expense ratios?

Does your 401k offer an employer match, and if so what is it?

Are you contributing enough to your 401k to get the full employer match offered each year?

What is the interest rate on your student debt?

About how much total (in dollars) do you believe you may have annually (for investing, debt payment and spending for enjoyment) above your current living expenses?

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

In general I think the priority should probably be:
1)if the funds offered in your 401k are decent, the contribute enough to your 401k to get all of any employer match offered each year;
2) pay extra on the the principal of the student debt; and
3) overspending for enjoyment of life.
Last edited by ruralavalon on Wed Jul 04, 2018 12:51 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

champion_ham
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Re: Anxiety Spending Money

Post by champion_ham » Wed Jul 04, 2018 9:14 am

Hello CJ,
I think that since you live with your parents and have no real expenses, take the $25k in cash/stocks you’ve saved and put it towards your student loan balance. It would take a huge weight off your shoulders. Paying off the remaining balance of $5k shouldn’t take too long after.

Download a budgeting app. Some people suggest Mint, YNAB or EveryDollar. I personally use EveryDollar. Using a budget will help you understand where exactly your money is going each month. It usually takes about 3 months to really fine-tune your budget, so stick with it and keep grinding.

You definitely don’t need to get into real estate right now. Focus on paying off your loan, building your emergency fund and saving for retirement.

Everything is okay. You’re on track, so stay focused and enjoy life.
Last edited by champion_ham on Wed Jul 04, 2018 9:24 am, edited 2 times in total.

rixer
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Re: Anxiety Spending Money

Post by rixer » Wed Jul 04, 2018 9:19 am

You might try to pick a certain percentage of your income to devote to savings/investments and another to paying off debt. Every paycheck, take that amount and put it in savings/investments and pay down debt accordingly. Live on what's left at your discreation.
It works. :sharebeer

mortfree
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Re: Anxiety Spending Money

Post by mortfree » Wed Jul 04, 2018 10:18 am

If you don’t like spending money, real estate may be the last place you want to “invest”

Payoff your debts now and get a clean start

Flyer24
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Re: Anxiety Spending Money

Post by Flyer24 » Wed Jul 04, 2018 10:22 am

This is basically the Dave Ramsey way. Take your savings except for $1k and put it towards your student loan. You will be debt free in no time that way. Don’t scrimp too much on your girlfriend. You don’t have to be extravagant but the little things go along way in a relationship. You should have your debt paid off in 6 months if you follow this plan. At that point, it is time to move out from your parents and get an apartment. There is no point living at home if you are debt free and have a steady job.

jjface
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Re: Anxiety Spending Money

Post by jjface » Wed Jul 04, 2018 10:44 am

You make $45k and live at home. Seems like you are in a good position to wipe out those student loans very quickly (get that off your shoulders first) and then start your investing. What you want is a simple 4-6 line budget to plan out what you are going to do with your paycheck. If you know what everything is for and where it is going it should relieve you anxieties.

Budget yourself $X a month to spend. That is for spending. Living is part of life as well as saving. No need to feel anxious if you stick to your budget. Whatever your first instinct is for the $X I would recommend you double it since you are struggling here.

A line for food. You need nutrition to live.

A line to pay your parents for bills. And another if you have bills of your own like cell phone. A lot of people overspend on monthly cellphone bills so if you are spending a lot here then there are ways to cut it down without impacting your life.

And the largest chunk will be to pay student loans off. I'd take the $25k and pay of the student loans and then you'd pay off the remaining 5K in 2-3 months. Then once paid off you can change this line to investing.

The odd job income after taxes can then be directed to student loans/investing.

browndog
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Re: Anxiety Spending Money

Post by browndog » Wed Jul 04, 2018 11:42 am

CJ,
Rixer's suggestion above may help you to loosen the emotional grip that money has over you. If you do what Rixer is suggesting, you are essentially automating your relationship with and distancing yourself from the money you wish to save and accumulate. That may be a good thing for you and allow you to let it go and focus on other things in your life. It can be hard to develop the mental and emotional flexibility to be able to spend (and enjoy spending) the percentage that you've made available for spending. When you are already so disciplined and money-oriented, it is very important to learn how to spend without self-recrimination. It is very important to learn how to share in a way that feels as though you are giving freely. You need to practice these activities the same way that you've practiced saving. It saddened me to read that you've unnecessarily denied yourself food to save money and that you're conflicted about treating your partner. Your saving skills will serve you well, to be sure. But I hope you'll devote yourself to stretching and learning how to be more open to other values, too. I've never known an emotionally intact and happy miser! Enjoy a balanced life!

pennylane
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Re: Anxiety Spending Money

Post by pennylane » Wed Jul 04, 2018 11:47 am

Use the 15k cash towards the debt, pay the rest off over the course of a year

nyclon
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Re: Anxiety Spending Money

Post by nyclon » Wed Jul 04, 2018 12:24 pm

I've been there. Except my first job required me to relocate to a VHCOL. So I couldn't save any money for years due to high rent, recession, helping parents etc. But I had to take the job.

I had $53k in student debt when I graduated. It took me 12 years and $16k of interest to pay it off. Even though the interest was only about 2.4% apy, the interest added up on such a large number - $70k total paid off.

If I were you I would take most, it not all of your savings and apply it to your debt tomorrow. You're in an ideal position to do so.

On your income your take home pay may be around $2.5-3k/mo. Maybe if you are aggressive for 6-9 months about cutting expenses, you can pay the remaining $5k off during that time. And in 9-12 months you'll start building wealth especially with your low monthly expenses.

Congratulations!

2015
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Re: Anxiety Spending Money

Post by 2015 » Wed Jul 04, 2018 12:28 pm

cjwarri0r wrote:
Mon Jul 02, 2018 10:59 pm
I'm 23. I have a degree in Finance and making a yearly salary of 45k. Actively looking to increase this. (first year working within my degree)

I have about 25k saved up. from previous jobs and side hustles
- 15k cash
- 5k stocks

I have 30k of student loan debt - I start making payments next month.

I am very calculated with how I spend and I am taking advantage of the fact that I'm still living with my parents so I have no real expenses yet.

^^^^^^^^Just to add context ^^^^^^^^^

At the end of every month, I create an excel spreadsheet of my monthly income and expenses.

I'm caught in an emotional battle with myself: I'm trying to be responsible by paying off my debt as quickly as possible while also saving and increasing my income by any means. To supplement my low income, I've been selling items on eBay and Amazon for about a year, doing odd jobs on the weekend, taking part in paid study groups, etc. Sometimes I'll be cheap and not feed myself enough for lunch just to save a few bucks.

It is not fun living like this

I want to enjoy my money sometimes as well....nothing extravagant. At the same time, I want to be responsible, save my money, eliminate my debt, rebuild that capital, and finally carve the path of building my wealth; I'm dying to get into real estate but this loan is looming over my head and stresses me out because it feels like its putting my life on hold. I want to put money in my 401k, but this loan is stressing me out. I want to treat my girlfriend sometimes, but the anxiety of unnecessarily spending money slaps me in the face.

I know I'm being a bit dramatic but it seriously stresses me out and sometimes I feel stuck. Maybe I'm impatient.

Anyone have any input or words of wisdom to a kid just trying to build his wealth and eliminate the stress of worrying about money in the long run?
Others will provide much better advice than I on your financial situation. I just wanted to thank you for your post. To see someone having as much going for them as you at 23 years old made my day (and my day needed making). You are not being dramatic or impatient. You are on the right track in questioning and soliciting advice. Excellence is never perfection. Excellence is doing exactly what you have been and are doing.

aristotelian
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Re: Anxiety Spending Money

Post by aristotelian » Wed Jul 04, 2018 12:37 pm

Seems like you know what you're doing financially. You are living within your means and have good habits. If you are stressed and anxious about money, that is just as much a mental health issue. Consider getting some help and talking to a professional. You are in the prime of your life. You should be enjoying things and not worrying about something as unimportant as money.

bloom2708
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Re: Anxiety Spending Money

Post by bloom2708 » Wed Jul 04, 2018 12:42 pm

Set aside "fun money" and spend it on what you deem as "fun".

You eventually have to escape the nest and renting an apartment will bring a new string of expenses and bills.

Save "enough" and live life. As your salary grows, you get up your savings goals.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

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Starchild
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Re: Anxiety Spending Money

Post by Starchild » Wed Jul 04, 2018 1:12 pm

I wouldn't worry about a 30K loan. That's nothing. Most people have mortgages 10x that or more. If it's bothering you and don't want to be cash short, you can always double your payments. You have a good salary :-)

bltn
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Re: Anxiety Spending Money

Post by bltn » Wed Jul 04, 2018 2:12 pm

I think your two biggest financial concerns, saving/investing and loan repayment, are valid.

Living at home for a short while is a great way to save money. But I would work out something with my parents to pay them a monthly sum to help with your expenses.

In your position, I would work at my current job and live at home for a year before I start to think about changes.
I would make debt repayment a priority in the following manner. I would take 25% of my take home pay to repay the student loan. I would save 15% of my take home pay, in a 401k to take advantage of an employer match if there is one, or in a Roth IRA if there is no match. A bit of savings can go to your bank account.The other 60% I would use to live on.
By the way ,I agree that eating lunch out can be too expensive. Take your lunch to work, maybe a sandwich or a bagel. Don t skip lunch entirely.
In a year look at your future with your current job. Then you can think about other opportunities if that seems desirable.

Once your debt is being paid at a rate of 25% of take home and a year has passed, think about moving into a modest apartment. Still try to save 15% of take home money. Try not to borrow money. Start saving for a car before you make the purchase. Buy furniture only as you can pay cash for it. When your debt is paid , cut that 25% to 15% to start saving for a house.

Be patient. Stay away from real estate investing for the next 10 years, until you have accumulated a nest egg. Then decide if real estate is really any better than equity investments.
.

JHU ALmuni
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Re: Anxiety Spending Money

Post by JHU ALmuni » Wed Jul 04, 2018 2:29 pm

You are still young and seems ambitious. Instead of trying to save few bucks and do odd jobs, invest in YOURSELF. Get a master degree in MBA, economic, or whatever you feel will benefit your career the most. Your employer may even pay for part of it. Look for online degrees for added flexibility... :sharebeer

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Sandtrap
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Re: Anxiety Spending Money

Post by Sandtrap » Wed Jul 04, 2018 2:32 pm

1 increase your income
2 pay off your debt
3 make a budget that brings you peace, a balance between earning, saving, and spending.
4 save up to get a place of your own
5 reimburse your parents for expenses
6 consider leveling up from your present degree to a masters, and/or leveling up from your present position at work to a higher one as a plan going forward.
j

averagedude
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Re: Anxiety Spending Money

Post by averagedude » Wed Jul 04, 2018 2:52 pm

Alot of people are giving you good advice on what to do, but remember what Warren Buffet says. "You only have to do few things right in life, as long as you don't do too many things wrong. These are two mistakes that i have witnessed young people do.
1. Having an unplanned pregnancy.
2. Spending too much of their income on transportation.

slim
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Re: Anxiety Spending Money

Post by slim » Wed Jul 04, 2018 3:33 pm

Peace of mind is underrated and anxiety over the long term causes all sorts of detrimental effects.

I'm not sure you'd come out SO far ahead by trying to over optimize right now and, as you've mentioned it's affecting your eating lunch.

If you wipe the debt out tomorrow then the anxiety will be gone. After that if you continue to save and side hustle you can rebuild your investments in no time.

The opportunity to do this now won't last forever and since you're able to live at home right now it makes sense to remove all liabilities as soon as possible so you can start thinkiglng about the future.

Congrats on finishing school and saving diligently. Now wipe the debt and with that leave the past in the past where it belongs.

EnjoyIt
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Re: Anxiety Spending Money

Post by EnjoyIt » Wed Jul 04, 2018 3:53 pm

You have some awesome advice up there and I just want to reiterate a few items I think are very important:

Create a budget for all those items including a monthly food budget. Do not go hungry it will actually cost you more in the long run either through decreased productivity or health reasons by not getting enough nutrients. Save money by bringing your own lunch which should be healthier than purchasing food.

Make sure you have a budget for dating and a budget for fun things for yourself and feel comfortable spending that money every month. Yes, saving money is important, but you only have 1 life and you need to enjoy it. By devoting money for fun and yourself you should be able to separate the spending from savings. The way I see many people do this including myself is to take cash out of every paycheck for debt, savings, and necessary expenses. Then use the rest for whatever you want. Don't be a miser. It sucks and it is no fun.

maria10
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Re: Anxiety Spending Money

Post by maria10 » Wed Jul 04, 2018 4:49 pm

I am nearing retirement but if I were just starting out like you are, I would make sure I had a good handle on my budget. About 8 years ago I discovered an incredible budgeting software tool called YNAB (www.ynab.com) and quite simply it changed my financial life. It costs money -- not very much -- but is well worth it. In fact, I will be urging my college aged son to start using it as soon as he gets a job and has to support himself fully. The benefit of using something like YNAB, to me, is that is eliminates (or greatly cuts down) on the money-related anxiety because it gives you the info you need BEFORE you spend any money.
Note- I do not work at YNAB -- I am just a very satisfied customer!

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Wed Jul 04, 2018 6:52 pm

Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.

keepingitsimple
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Re: Anxiety Spending Money

Post by keepingitsimple » Wed Jul 04, 2018 8:00 pm

cjwarri0r wrote:
Wed Jul 04, 2018 6:52 pm
Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.
To some degree, the amount you allocate to retirement and fun money is subjective. Others on this forum will likely chime in with specifics and percentages. What I would like to point out and encourage you to do is figure out the general cost of the fun things you and your girlfriend might like to do (vacations, weekend trips, date nights, eating out, etc.). Figure these costs out, give each a little padding and assign them a line in your budget. Don't under fund this line item. I say this because you are young, you need to enjoy life and the habits you establish now can influence your happiness in the future. Since you are stressed about spending money, I think the best thing you can do is give yourself permission to spend some on fun things. The risk of not doing so? Burnout.

As far as what to do with the money you've saved. I would put 50% to 75% towards the student loan, keep the remainder for an emergency fund and then make extra monthly payments to pay off the student loan early.

keepingitsimple
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Re: Anxiety Spending Money

Post by keepingitsimple » Wed Jul 04, 2018 8:04 pm

maria10 wrote:
Wed Jul 04, 2018 4:49 pm
I am nearing retirement but if I were just starting out like you are, I would make sure I had a good handle on my budget. About 8 years ago I discovered an incredible budgeting software tool called YNAB (www.ynab.com) and quite simply it changed my financial life. It costs money -- not very much -- but is well worth it. In fact, I will be urging my college aged son to start using it as soon as he gets a job and has to support himself fully. The benefit of using something like YNAB, to me, is that is eliminates (or greatly cuts down) on the money-related anxiety because it gives you the info you need BEFORE you spend any money.
Note- I do not work at YNAB -- I am just a very satisfied customer!
I think Maria10 makes an excellent point about budgeting and its reduction of money-related anxiety. Tracking income / expenses (which is extremely important) is not the same as creating a budget. Tracking shows where money went, budgeting shows where you intend it to go.

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ruralavalon
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Re: Anxiety Spending Money

Post by ruralavalon » Thu Jul 05, 2018 9:08 am

cjwarri0r wrote:
Wed Jul 04, 2018 6:52 pm
Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.
It's great to see that you have the monthly budgeting and general expenses under control.

Are there any very low expense ratio index funds offered in your 401k? Please give fund names, tickers and expense ratios. (The quality and expense of the funds influences how much to dedicate to investing.)

How much do you have extra from your paycheck monthly, beyond your living expenses?

What is the interest rate on your student debt? (Because you have no employer match offered in your 401k, paying off the student debt should probably be a priority if the interest rate is high.)
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Fri Jul 06, 2018 9:25 am

ruralavalon wrote:
Thu Jul 05, 2018 9:08 am
cjwarri0r wrote:
Wed Jul 04, 2018 6:52 pm
Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.
It's great to see that you have the monthly budgeting and general expenses under control.

Are there any very low expense ratio index funds offered in your 401k? Please give fund names, tickers and expense ratios. (The quality and expense of the funds influences how much to dedicate to investing.)

How much do you have extra from your paycheck monthly, beyond your living expenses?

What is the interest rate on your student debt? (Because you have no employer match offered in your 401k, paying off the student debt should probably be a priority if the interest rate is high.)
I have not actually put anything into my 401k yet...want to now though. My plan was to just put it in a few vanguard funds for now until I study up on a better way to allocate that money. - any suggestions?

Im bringing in roughly $2800/month from my job and on average another $500 from side hustles. Out of that $3300 I've been able to stow away at least $2600 of that....but that'll all change now that my loan payments are starting.

Interest rate on my student debt is about 4.5% i believe.

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Fri Jul 06, 2018 9:36 am

keepingitsimple wrote:
Wed Jul 04, 2018 8:04 pm
maria10 wrote:
Wed Jul 04, 2018 4:49 pm
I am nearing retirement but if I were just starting out like you are, I would make sure I had a good handle on my budget. About 8 years ago I discovered an incredible budgeting software tool called YNAB (www.ynab.com) and quite simply it changed my financial life. It costs money -- not very much -- but is well worth it. In fact, I will be urging my college aged son to start using it as soon as he gets a job and has to support himself fully. The benefit of using something like YNAB, to me, is that is eliminates (or greatly cuts down) on the money-related anxiety because it gives you the info you need BEFORE you spend any money.
Note- I do not work at YNAB -- I am just a very satisfied customer!
I think Maria10 makes an excellent point about budgeting and its reduction of money-related anxiety. Tracking income / expenses (which is extremely important) is not the same as creating a budget. Tracking shows where money went, budgeting shows where you intend it to go.
Thank you. I use Mint to help my budget and track. I also put some money aside every month for unplanned emergencies or maintenance... stuff like that

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ruralavalon
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Re: Anxiety Spending Money

Post by ruralavalon » Fri Jul 06, 2018 10:16 am

cjwarri0r wrote:
Fri Jul 06, 2018 9:25 am
ruralavalon wrote:
Thu Jul 05, 2018 9:08 am
cjwarri0r wrote:
Wed Jul 04, 2018 6:52 pm
Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.
It's great to see that you have the monthly budgeting and general expenses under control.

Are there any very low expense ratio index funds offered in your 401k? Please give fund names, tickers and expense ratios. (The quality and expense of the funds influences how much to dedicate to investing.)

How much do you have extra from your paycheck monthly, beyond your living expenses?

What is the interest rate on your student debt? (Because you have no employer match offered in your 401k, paying off the student debt should probably be a priority if the interest rate is high.)
I have not actually put anything into my 401k yet...want to now though. My plan was to just put it in a few vanguard funds for now until I study up on a better way to allocate that money. - any suggestions?

Im bringing in roughly $2800/month from my job and on average another $500 from side hustles. Out of that $3300 I've been able to stow away at least $2600 of that....but that'll all change now that my loan payments are starting.

Interest rate on my student debt is about 4.5% i believe.

Because there is no employer match offered in your 401k, the top priority should be accelerated pay off the $30,000 of student debt at 4.5% interest.

For a second priority open a Roth IRA at a low cost provider like Vanguard, contribute the maximum $5.5k per year, and invest in a low expense, very diversified, balanced fund such as Vanguard LifeStrategy Growth Fund (VASGX), ER 0.14%.

What are the 4-5 funds offered in your 401k which have the lowest expense ratios. Please give fund names, tickers and expense ratios. Using your tax-advantaged 401k will be a good idea for additional investments if decent funds are offered. (The quality of the funds offered in your 401k influences how much of your extra $2,600 per month to allocate to investing.)

Third I suggest budgeting some fun money for enjoyment of life and treating your girl friend, and paying your parents some money for room and board.

With $2,600 per month ($31,000 per year) you should be able to allocate money to all three.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

tribec07
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Re: Anxiety Spending Money

Post by tribec07 » Fri Jul 06, 2018 10:24 am

I'd recommend doing some reading on abundance vs scarcity mindset. Believing in abundance doesn't have to mean you don't make wise financial decisions, but it's a mindset shift that will serve you well. This is a marathon, not a sprint, and you need to have some fun along the way.

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Fri Jul 06, 2018 10:49 am

tribec07 wrote:
Fri Jul 06, 2018 10:24 am
I'd recommend doing some reading on abundance vs scarcity mindset. Believing in abundance doesn't have to mean you don't make wise financial decisions, but it's a mindset shift that will serve you well. This is a marathon, not a sprint, and you need to have some fun along the way.
After reading a few articles on abundance vs scarcity... I'm definitely not in the scarcity corner. I think this stress comes from the fact that I KNOW how much money is out there. I'm just looking for the solution as to how to obtain more of it... until I find a way to obtain more, managing my expenses wisely is all I can do. I just dont know what that solution is and it upsets me because I have tried plenty of things. Anyways, thats for a whole separate thread. Thanks

cjwarri0r
Posts: 11
Joined: Mon Oct 23, 2017 2:30 pm

Re: Anxiety Spending Money

Post by cjwarri0r » Fri Jul 06, 2018 10:51 am

ruralavalon wrote:
Fri Jul 06, 2018 10:16 am
cjwarri0r wrote:
Fri Jul 06, 2018 9:25 am
ruralavalon wrote:
Thu Jul 05, 2018 9:08 am
cjwarri0r wrote:
Wed Jul 04, 2018 6:52 pm
Thank you everyone for your input, advice, wisdom, and kind words.

I have to admit, this post originated from pure emotion. I would LOVE to pay my parents for my expenses; though limited, I still want to give something back.

So question for you all: With my current income, how much should be allocated to retirement & "fun money". I think I have the monthly budgeting and general expenses under control.
It's great to see that you have the monthly budgeting and general expenses under control.

Are there any very low expense ratio index funds offered in your 401k? Please give fund names, tickers and expense ratios. (The quality and expense of the funds influences how much to dedicate to investing.)

How much do you have extra from your paycheck monthly, beyond your living expenses?

What is the interest rate on your student debt? (Because you have no employer match offered in your 401k, paying off the student debt should probably be a priority if the interest rate is high.)
I have not actually put anything into my 401k yet...want to now though. My plan was to just put it in a few vanguard funds for now until I study up on a better way to allocate that money. - any suggestions?

Im bringing in roughly $2800/month from my job and on average another $500 from side hustles. Out of that $3300 I've been able to stow away at least $2600 of that....but that'll all change now that my loan payments are starting.

Interest rate on my student debt is about 4.5% i believe.

Because there is no employer match offered in your 401k, the top priority should be accelerated pay off the $30,000 of student debt at 4.5% interest.

For a second priority open a Roth IRA at a low cost provider like Vanguard, contribute the maximum $5.5k per year, and invest in a low expense, very diversified, balanced fund such as Vanguard LifeStrategy Growth Fund (VASGX), ER 0.14%.

What are the 4-5 funds offered in your 401k which have the lowest expense ratios. Please give fund names, tickers and expense ratios. Using your tax-advantaged 401k will be a good idea for additional investments if decent funds are offered. (The quality of the funds offered in your 401k influences how much of your extra $2,600 per month to allocate to investing.)

Third I suggest budgeting some fun money for enjoyment of life and treating your girl friend, and paying your parents some money for room and board.

With $2,600 per month ($31,000 per year) you should be able to allocate money to all three.
I'd have to get back to you on the types of funds later on today when I have time to properly look. Thank you for the input. Paying off the debt is my top priority at the moment. Any suggestions for particular growth funds by the way?

Im working on the "fun money" part. Its a little difficult

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Pajamas
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Re: Anxiety Spending Money

Post by Pajamas » Fri Jul 06, 2018 11:49 am

Focus on advancing your career vs. the side gigs. That has the greatest potential return over your lifetime for your current time and effort.

It might be helpful for you to get short-term, problem-focused counseling to help with your anxiety.

getthatmarshmallow
Posts: 148
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Re: Anxiety Spending Money

Post by getthatmarshmallow » Fri Jul 06, 2018 12:22 pm

The challenging thing about budgeting for you, is that you don't really have any expenses! There is no reason you should be skipping lunch to make money (and if lunch at your office is about networking with senior partners, it might be an expense you want!)

Here's what I would do, were I in your shoes.

Suze Orman's 50/30/20 is a good place to start. Let's say just to have a round number that you make $3000 per month. Now, you don't have any expenses, if you did, mandatory must-pay-every-month expenses shouldn't be more than 50% of your income. So, take $1500 and set it aside into a savings account. Pretend, for the moment, it's gone. But this would go toward housing, food, insurance, and minimum payments on any debt.

20% goes to savings. That's $600 per month that you put in your 401K. While you're learning what you want to do with investments, put it in one of the Vanguard Target Date funds available to you and ignore it.

30% is for all of your wants. That's $1000 a month. You have a lot of freedom with what you do with this, but keep in mind that it includes all expenses that can wait a bit, like clothing, and all hobbies, so it's not $1000 of lattes or bar money. Especially because you want to knock out these loans fast.

Don't sweat a percentage here or there, but it's a good target to keep in mind.

So now let's look at the numbers again:

It's wise to keep 3-6 months of expenses on hand. You don't have any expenses! But it's still nice to get in the habit of having one, so let's say 3 months of expenses is three times that 50% number, so in my example, $4500. Since you're at home, you can even keep that invested if you like.

You have $25K in assets, and $30K in debt. Put $20K toward the loans. Now you have $10K in debt, and an emergency fund.

Now it's up to you how fast you want that gone. But here's where the fact that you're living at home really helps. Let's say you give yourself $500 per month of discretionary money, your *must* expenses are $500 and put the other $1500 toward your debt. You'll be out of debt practically by the end of the year, and you'll have put money aside for retirement. Then you can figure out what you want to do next -- move out? You can accelerate that even more if you like (move retirement savings into debt payment), but you sound like you're spending your free time stressing about spreadsheets instead of enjoying life, and spreadsheets just ain't worth it.

I'd worry less about selling things on eBay and more on improving your career, fwiw. "Side hustles" are trendy but also a way to glam up "poorly paid part-time job."

TL;DR: you're fine.

mkawasaki
Posts: 32
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Re: Anxiety Spending Money

Post by mkawasaki » Fri Jul 06, 2018 12:36 pm

Congrats on moving to the next stage of your life!

My quick summary: Write down a one-page financial strategy so you can revisit whenever making an investment, saving or spending decision.

I, like you, stress about spending money. I'm in a different situation (50's, very good income, kids off to college, save a lot) but my personality struggles with spending money and think about it all the time.

Best practice for me is to write down a one-page financial strategy (everyone's will be different and should only have meaning for you). I take it out monthly, especially when struggling with a decision. Unbelievably after reading it the decision becomes clear and only takes a few minutes.

A simple book that was very helpful for me One Page Financial Plan by Carl Richards. He writes a column for the NYTimes and it is a very easy read.

Good luck.

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ruralavalon
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Re: Anxiety Spending Money

Post by ruralavalon » Fri Jul 06, 2018 2:40 pm

cjwarri0r wrote:
Fri Jul 06, 2018 10:51 am
I'd have to get back to you on the types of funds later on today when I have time to properly look. Thank you for the input. Paying off the debt is my top priority at the moment. Any suggestions for particular growth funds by the way? [emphasis added]

Im working on the "fun money" part. Its a little difficult
For the IRA initially I suggest Vanguard LifeStrategy Growth Fund (VASGX) ER 0.14%.
Last edited by ruralavalon on Fri Jul 06, 2018 3:16 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

JoeRetire
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Re: Anxiety Spending Money

Post by JoeRetire » Fri Jul 06, 2018 2:47 pm

cjwarri0r wrote:
Mon Jul 02, 2018 10:59 pm
I'm 23. I have a degree in Finance and making a yearly salary of 45k. Actively looking to increase this. (first year working within my degree)

I have 30k of student loan debt - I start making payments next month. Average interest on all loans is about 5%.

It is not fun living like this
Sorry, but being in debt is not supposed to be fun. Fun is for people who have money.

Since you live with your parents, have no real expenses, and have a decent income, you should be able to make short order of your debt. Then you can start having fun again.

barberakb
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Re: Anxiety Spending Money

Post by barberakb » Fri Jul 06, 2018 3:11 pm

I think we come from the same cloth... I wouldn't say it makes me anxious but I do worry about it. A lot.

For instance, I love golf and golf equipment. New stuff is very expensive.

I am 40 and even though i can now afford whatever new club I want, I always buy my stuff used on ebay.

I get it at least 50% off and still in great condition. I would feel guilty if I bought it new. Not sure why, haha. But I actually do get pleasure out
of hunting on ebay for clubs and finding a great deal. Plus I use the savings to pay for the actual golfing.

First off, you should feel good. You don't have that much debt, you have a job, you have savings and you have very little expenses.

My advice is stay in that situation and pay off all of your debt as fast as you can. But also, live a little.

Find out what you really enjoy. Don't spen money on the stuff that doesn't make you happy.

So if you really like going to the movies with your friends, spend on that. Or going out to eat or art or whatever.

But definitely don't skip lunch etc... just to save a few bucks.

-buzz-
Posts: 75
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Location: USA

Re: Anxiety Spending Money

Post by -buzz- » Fri Jul 06, 2018 3:51 pm

cjwarri0r wrote:
Mon Jul 02, 2018 10:59 pm
I'm caught in an emotional battle with myself: I'm trying to be responsible by paying off my debt as quickly as possible while also saving and increasing my income by any means. To supplement my low income, I've been selling items on eBay and Amazon for about a year, doing odd jobs on the weekend, taking part in paid study groups, etc. Sometimes I'll be cheap and not feed myself enough for lunch just to save a few bucks.

It is not fun living like this
You've got a lot going for you right now. Your degree is finished, you have a nice starter income, and your expenses are very low. Most importantly, you are paying attention.

Creating a plan and sticking with it will relieve a lot of stress and anxiety around handling money.

Read Dave Ramsey's book The Total Money Makeover. (Support bogleheads.org using the Amazon link up top or check it out at the library.) He has a good plan on how to work through debt, build an emergency fund, and then save for retirement in that order.

Every month, create a spending plan so that you are intentional about how you use your money. YNAB is the one I luse and like best. For example, budget enough to eat reasonably for the month. This takes the stress off of skipping meals to save. Every day, you already know that you've set aside money in your budget so you can have a reasonable meal. If you splurge one day, then you might need to pack a sandwich later that week. That is fine.

If living with your parents is workable for 12 months, throw almost all of your current $25k in savings on the student loan debt. Ramsey would say all except the $1k. If you're not comfortable with that, then I'd say to throw $20k at it and hold onto $5k. Budget enough to have some life but keep your expenses low. Throw every other penny at that student loan. You could have it paid off in a couple of months if you are willing to get down to $1k savings.

megabad
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Re: Anxiety Spending Money

Post by megabad » Fri Jul 06, 2018 4:59 pm

cjwarri0r wrote:
Mon Jul 02, 2018 10:59 pm
Anyone have any input or words of wisdom to a kid just trying to build his wealth and eliminate the stress of worrying about money in the long run?
Everyone's situation is different but here is what I would do:
1) Save money and live like pauper (check for you)
2) Pay off loans at blistering pace (since they are affecting your mindset)
3) Move (your poor, generous parents...)
4) Get new, higher paying job in lower cost of living area

I find the hardest thing for the younger folks to get on board with was the moving thing. But in my own life, moving and changing jobs was the single biggest factor in raising my networth in the early years. NYC area (even pretty far out) is obviously a very expensive area as you know.

If the girlfriend is serious, I would treat her often, but in my experience most good partners would not be upset if they had to go without the filet mignon dinners for a while so you can pay down your student loans (I speak from first hand experience here). Not to get too far ahead of myself but, marriage is also typically a good way to reduce living expenses (and sometimes marginal tax rates).

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Cycle
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Re: Anxiety Spending Money

Post by Cycle » Fri Jul 06, 2018 5:36 pm

I skip breakfast and lunch 5 days a week. I don't own a car (DW has one). Don't call it frugality, call it minimalism. we travel often with credit card churning points, or tack vacation time onto work trips. Just booked a trip to Bilbao / San Sebastian Spain with chase points. You can live an "extravagant" life and still save a lot of money.

I was making 50k when I started in engineering in 2006. By jumping from one company to another (and moving cities) I got to 75k by 2008. Currently at 125k as an individual contributor, but at 34 net worth is 1.3MM (.8MM from my half).

I'd just focus on getting raises so you can max out retirement accounts in your 20s, and if you are broke after doing so, so be it.

I bought a condo when I was 24 but got a roommate to allow me to still max out my 401k/roth. We now live in a duplex and rent out the other half, so our housing cost is a profit. Renting is often cheaper than buying. In my case, I definitely should have rented with a roommate until I got married.

tribec07
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Re: Anxiety Spending Money

Post by tribec07 » Tue Jul 10, 2018 1:27 pm

cjwarri0r wrote:
Fri Jul 06, 2018 10:49 am
tribec07 wrote:
Fri Jul 06, 2018 10:24 am
I'd recommend doing some reading on abundance vs scarcity mindset. Believing in abundance doesn't have to mean you don't make wise financial decisions, but it's a mindset shift that will serve you well. This is a marathon, not a sprint, and you need to have some fun along the way.
After reading a few articles on abundance vs scarcity... I'm definitely not in the scarcity corner. I think this stress comes from the fact that I KNOW how much money is out there. I'm just looking for the solution as to how to obtain more of it... until I find a way to obtain more, managing my expenses wisely is all I can do. I just dont know what that solution is and it upsets me because I have tried plenty of things. Anyways, thats for a whole separate thread. Thanks
Look how much interest your post has generated! It seems like a lot of wish we had been you earlier and have become interested in your story... maybe there's a signal about a side hustle in there somewhere. A blog?

Also, my initial response to gifts for a girlfriend was "ugh". When I pause and think about that, it's because gifts aren't my love language, nor are they my spouse's, so we benefit financially because the things we most appreciate from each other aren't material. I really recommend all couples read "The Five Love Languages!"

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Tue Jul 10, 2018 9:59 pm

tribec07 wrote:
Tue Jul 10, 2018 1:27 pm
cjwarri0r wrote:
Fri Jul 06, 2018 10:49 am
tribec07 wrote:
Fri Jul 06, 2018 10:24 am
I'd recommend doing some reading on abundance vs scarcity mindset. Believing in abundance doesn't have to mean you don't make wise financial decisions, but it's a mindset shift that will serve you well. This is a marathon, not a sprint, and you need to have some fun along the way.
After reading a few articles on abundance vs scarcity... I'm definitely not in the scarcity corner. I think this stress comes from the fact that I KNOW how much money is out there. I'm just looking for the solution as to how to obtain more of it... until I find a way to obtain more, managing my expenses wisely is all I can do. I just dont know what that solution is and it upsets me because I have tried plenty of things. Anyways, thats for a whole separate thread. Thanks
Look how much interest your post has generated! It seems like a lot of wish we had been you earlier and have become interested in your story... maybe there's a signal about a side hustle in there somewhere. A blog?

Also, my initial response to gifts for a girlfriend was "ugh". When I pause and think about that, it's because gifts aren't my love language, nor are they my spouse's, so we benefit financially because the things we most appreciate from each other aren't material. I really recommend all couples read "The Five Love Languages!"
You know, I was considering starting a financial blog of my "journey". When I say "side hustle" btw, I really meant things that require little time and is convenient, such as retail arbitrage; I simply find things online for a discount and sell it for full price elsewhere. Takes zero energy and a quick 2 min trip to the post office.

Lol your reaction is understandable. Gifts aren't our type of love language neither... It's more of me wanting to do something nice for her occasionally. Shes very supportive and on the same page as me financially. Me being a good guy, I feel obligated to show my appreciation sometimes & I would like to do that in a variety of ways (weekend trips, simple dinner and movie dates, etc. nothing extravagant) . I'll check out the read though, thanks!

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Tue Jul 10, 2018 10:12 pm

-buzz- wrote:
Fri Jul 06, 2018 3:51 pm


You've got a lot going for you right now. Your degree is finished, you have a nice starter income, and your expenses are very low. Most importantly, you are paying attention.

Creating a plan and sticking with it will relieve a lot of stress and anxiety around handling money.

Read Dave Ramsey's book The Total Money Makeover. (Support bogleheads.org using the Amazon link up top or check it out at the library.) He has a good plan on how to work through debt, build an emergency fund, and then save for retirement in that order.

Every month, create a spending plan so that you are intentional about how you use your money. YNAB is the one I luse and like best. For example, budget enough to eat reasonably for the month. This takes the stress off of skipping meals to save. Every day, you already know that you've set aside money in your budget so you can have a reasonable meal. If you splurge one day, then you might need to pack a sandwich later that week. That is fine.

If living with your parents is workable for 12 months, throw almost all of your current $25k in savings on the student loan debt. Ramsey would say all except the $1k. If you're not comfortable with that, then I'd say to throw $20k at it and hold onto $5k. Budget enough to have some life but keep your expenses low. Throw every other penny at that student loan. You could have it paid off in a couple of months if you are willing to get down to $1k savings.
Thank you for the suggestions. I watch Dave Ramsey all the time on youtube, probably seen every video of his. Haven'y gotten around to reading his book but I imagine its probably all the same material that I've learned from watching. If i can find a cheap copy maybe I'll pick it up one day.

I've started packing sandwiches and I'm going to try to do so more frequently. I currently use Mint but after seeing people's suggestion maybe I'll try YNAB.

Honestly, after really analyzing my stress and reading people's input (which I appreciate) maybe the source of the stress is because I do not feel like I make enough? After seeing some individual's salaries on here, It's hard not to be impatient and want more, you know? Maybe this is why I'm stressing the loan so much...because making big monthly contributions is harder to swallow at the moment compared to if I was maybe more? Realistically, I'm probably going to throw 20k into the loan & keep 5k for emergency. I dont know. I think I worry too much

cjwarri0r
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Re: Anxiety Spending Money

Post by cjwarri0r » Tue Jul 10, 2018 10:13 pm

ruralavalon wrote:
Fri Jul 06, 2018 2:40 pm
cjwarri0r wrote:
Fri Jul 06, 2018 10:51 am
I'd have to get back to you on the types of funds later on today when I have time to properly look. Thank you for the input. Paying off the debt is my top priority at the moment. Any suggestions for particular growth funds by the way? [emphasis added]

Im working on the "fun money" part. Its a little difficult
For the IRA initially I suggest Vanguard LifeStrategy Growth Fund (VASGX) ER 0.14%.
Thank you for the suggestion. I'll check it out. Any particular reason why you suggest this specifically?

cjwarri0r
Posts: 11
Joined: Mon Oct 23, 2017 2:30 pm

Re: Anxiety Spending Money

Post by cjwarri0r » Tue Jul 10, 2018 10:20 pm

getthatmarshmallow wrote:
Fri Jul 06, 2018 12:22 pm
The challenging thing about budgeting for you, is that you don't really have any expenses! There is no reason you should be skipping lunch to make money (and if lunch at your office is about networking with senior partners, it might be an expense you want!)

Here's what I would do, were I in your shoes.

Suze Orman's 50/30/20 is a good place to start. Let's say just to have a round number that you make $3000 per month. Now, you don't have any expenses, if you did, mandatory must-pay-every-month expenses shouldn't be more than 50% of your income. So, take $1500 and set it aside into a savings account. Pretend, for the moment, it's gone. But this would go toward housing, food, insurance, and minimum payments on any debt.

20% goes to savings. That's $600 per month that you put in your 401K. While you're learning what you want to do with investments, put it in one of the Vanguard Target Date funds available to you and ignore it.

30% is for all of your wants. That's $1000 a month. You have a lot of freedom with what you do with this, but keep in mind that it includes all expenses that can wait a bit, like clothing, and all hobbies, so it's not $1000 of lattes or bar money. Especially because you want to knock out these loans fast.

Don't sweat a percentage here or there, but it's a good target to keep in mind.

So now let's look at the numbers again:

It's wise to keep 3-6 months of expenses on hand. You don't have any expenses! But it's still nice to get in the habit of having one, so let's say 3 months of expenses is three times that 50% number, so in my example, $4500. Since you're at home, you can even keep that invested if you like.

You have $25K in assets, and $30K in debt. Put $20K toward the loans. Now you have $10K in debt, and an emergency fund.

Now it's up to you how fast you want that gone. But here's where the fact that you're living at home really helps. Let's say you give yourself $500 per month of discretionary money, your *must* expenses are $500 and put the other $1500 toward your debt. You'll be out of debt practically by the end of the year, and you'll have put money aside for retirement. Then you can figure out what you want to do next -- move out? You can accelerate that even more if you like (move retirement savings into debt payment), but you sound like you're spending your free time stressing about spreadsheets instead of enjoying life, and spreadsheets just ain't worth it.

I'd worry less about selling things on eBay and more on improving your career, fwiw. "Side hustles" are trendy but also a way to glam up "poorly paid part-time job."

TL;DR: you're fine.
Sincerely appreciate you breaking it down and giving your input. I'll take your template of numbers / percentages and plug in my own preferences and see how it pans out. You're right though, I can have it banged out by the end of the year. This is just scary to me which is why I think I put so much focus on the spreadsheets and having it all planned out; everyone around me, family, friends, etc. are drowning in debt and have very little education on managing their expenses and it saddens me. I dont want to be like that.

I'm a financial analyst right now and I'm not really sure If I'm enjoying what I'm doing. (This can be a whole other thread) I want to advance my career of course, but at the expense of my happiness? not really. I'm still trying to figure this part out because I know my career can have high income potential one day. The "Side hustles" usually fund my spending money for the month. Gives me a little relief to spend money when I know the money I'm spending is "extra" income, you know? Most of them take very little time.

Momus
Posts: 293
Joined: Tue Feb 21, 2012 9:23 pm

Re: Anxiety Spending Money

Post by Momus » Tue Jul 10, 2018 10:50 pm

I would try to do whatever you can to get a better paying job. Finance is a great degree, try to get promoted or jump from company to company taking extra responsibilities. The feeling that you can't spend money is because you just don't make enough, so every little purchase becomes a mental tug of war of saving and spending. You need at least 75k/yr to feel you bring enough money to be happier, it's actually probably more than that since you live close to NYC. 45k/yr is really tough to live on and accomplish a high savings rate. Rent, student loan, savings for retirement gonna eat a ton of chunk of that, so I feel you there...

TBH, I eat once a day only, and I eat whatever I want at dinner time. I don't eating breakfast and lunch (waste of time, making you mentally clouded if you down a bunch of carbs).

mikeyzito22
Posts: 34
Joined: Sat Dec 02, 2017 5:42 pm

Re: Anxiety Spending Money

Post by mikeyzito22 » Tue Jul 10, 2018 10:50 pm

chattyanne wrote:
Wed Jul 04, 2018 8:39 am
I smile at your name CJ. I wonder if you meant CJ worrier or CJ Warrior. Hopefully you see yourself as a Warrior. :sharebeer

Congrats with completing your studies and landing a position in the same field. First I want to ask you to erase "low income" from your vocabulary. It is really how we see ourselves and our situation. You are very wealthy. You have the opportunity to start knocking down that loan w/o other expenses. There is huge wealth in that, so I ask you, please take advantage of it and be grateful. At your age I was sharing rent, working in a low wage ($10.00 hr) factory, going to night school, which took 4 years just to get an Associates in Business Management degree which then I had to pay for. It was tough, especially when all of my friends were doing, going, buying and being.

You mentioned you have approx. 25k saved up and show 15k cash and 5k stocks = 20k. Where is the other 5k? Just curious.

Good job with the spreadsheet of monthly funds and budgeting. The main life saver for me was a program called YNAB, which I have the classic version meaning I paid approx. $30 once and it keeps going like the energizer bunny. I don't think they offer the classic anymore, I'm unsure but the main point is to get yourself a month in advance. (I totally can't explain it like they can) Basically, all of this months income is for next months budget. By doing this you have much wiggle room and have time for adjustments. This gets you away from living check to check and even month to month. Check them out and take time to learn. You can totally do this w/ your own spreadsheet. I think this will make it easier for you to budget some money for yourself which will include your friends. I wish I had this when I was your age.

You mentioned, "Sometimes I'll be cheap and not feed myself enough for lunch to save a few bucks.", how are you going to think straight and stay focused when your not feeding yourself? Food is the nutrients to our mind and body. Where I live lunch meat, salad, and fruit isn't that expensive. I have always made my lunch to take to work and I watch everybody else go out for lunch. I get a head of lettuce, tomatoes, green/yellow/red pepper, carrots, chop them up and put in a large bowl which will last me a week. Eat well if you want a strong mind.

It does take patients and purpose. Figure out realistically how long you want to take to payoff that loan and when you have extra money you can knock it down quicker. I do think it's important to have a fun fund for yourself in your budget. I give myself $100 a month and if I don't spend it all then the balance transfers to the next month etc. Eventually I will spend it all on a fun spree or move the extra elsewhere...savings or investments.

Honestly, I think you are on the right track. You may have a degree in Finance but you are in the right place to become an expert in finance.

I understand that you are "dying" to get into real estate. Remember this one thing, if you get a loan for property, the banker is still the landlord but they don't have to fix anything...you do. The banker "landlord" will be happy to give you a loan to fix things that break down but you won't see them step foot on your property to help out. I only say this because so many of us have gotten mortgages and then turn around and say we "own" our own home. I think we are taught this. Just see it for what it is. When we are young (including my young self), we think we "made it" when we get a nice car, or we "made it" when we purchased real estate, or "made it" when...

I am 47 yrs old
Income approx. 33k (the most I have ever made)
Debt free including a very lovely home and property
Take note: I couldn't live in California very well w/ my same income. Where we live makes a difference.
Just learning about retirement. I did things the hard way.

You're not stuck. You didn't get your degree in one day. I think you're on the right track, especially by asking others for opinions. Keep reading, learning, searching and don't feel like you have to live like others by buying worthless stuff. Sorry, this got lengthy and I wasn't able to give specific direction other than encouragement. I tend to have a lot to say when I hear people say they have "low income". Face it, you make more than me and I think that's awesome! :happy

You are CJ...our future Warrior!
Superb!

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aspirit
Posts: 90
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Location: Bos/Mia-south

Re: Anxiety Spending Money

Post by aspirit » Tue Jul 10, 2018 11:40 pm

Without platitudes one way to optimize your steadfast revenue stream is to barter, trade, buy, sell and such for whatever you can w/o using your income. Good luck!
Time & tides wait for no one. A man has to know his limitations.

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