I recently had a chat with the daughter of a friend who just got a raise. But she cannot figure why she is now making double what she made two years ago and still has no money. Let’s talk about this very common dilemma, with a little help from a recent article.
Lifestyle creep – Things that you previously considered luxuries are not weekly necessities. Massages, spa treatments, work-out sessions with a trainer, upgrades on basic services can’t all be purchased on that little raise, bud. Going without is not my dream for you, but you likely can’t afford ALL this.
Too many dinners – According to an article, Americans ages 18-29 spent $173 PER WEEK on food and they eat out more than other age groups. If the purpose is social, I get it, but you can do this cheaper. About 15% of your income should be spent on food.
Monthly auto-pay – It was great idea to put bills on auto-pay until you failed to use those services. Time passes and your needs and interests change. Four years ago this monthly service seemed invaluable. Check your bank info or credit card statement and see what you are paying for every month. You may not use several of the services and might be able to save some real money.
You’re a generous pal- I know how happy it makes you to see your friends have fun and so maybe you are ‘lending’ money with more frequency than you realize. Start noticing how often you are paying $20 here and more there and come up with a way to change this. You don’t have to be confrontational. But you work hard for your money, so hard for it honey. So maybe you should start saving for your emergency fund instead of helping that friend so often it is almost expected.
Glamour October 2013
Marion Syversen, MBA
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