Making a Good Salary and Never Having ANY Money

[jrwilheim]

Is anyone else out there in this boat? I feel like I make a decent enough salary ($35,000 a year base, maybe around $40,000 with overtime), admittedly not a huge salary by New York City standards but still a good chunk of money, and I feel like I never HAVE any money. It all goes to savings, student loans, my IRA, rent, and food. I am so SICK of it being a big struggle to raise the money for anything that costs more than $100. I really need a new suit for going to court and/or going on interviews, and I can't raise $200-$300 to buy one. When I needed a kitchen table, I had to borrow the $300 for it from my grandmother. Argh! I don't spent money on crap like going to Starbucks every day or expensive vacations or clothes I don't need, so why is raising $300 on a $40,000 salary such a problem?

[pisces2473]

Can you not put so much into your IRA/savings right now? Give yourself some money for YOU, now?

[LakeJay]

How about for those bigger purchases you use a credit card? It sounds like you're disciplined enough to not get carried away with using it.

[jrwilheim]

Can you not put so much into your IRA/savings right now? Give yourself some money for YOU, now?

Yeah...I've thought about this. The thing is, I'm trying really hard to build up at least a 3-month emergency fund, and I have about 2 months' salary in savings. I'm putting aside $55 a week into that, just raised it from $45 because I had to take some money out to pay extra rent when my roommate bailed in September. I'm contributing $140 to my IRA each month, but could chop it down to $100. And I probably don't need to eat out as much as I do.

[pisces2473]

Yeah, try that and see what happens. Also, saving loose change adds up FAST.

[wordsmith]

Sorry, I'm in the make crap salary and never have any money boat.

really, though, your cost of living is high by virtue of where you live, and, as the adage goes...if you make more money, you tend to spend more money...not save the surplus of what you were making previously. Is it possible to think of ways to live more frugally than you have been? Like, for instance...instead of getting a $300 table you needed to borrow money for, could you have found a second hand on, or a thrift store one that would suffice for a while? Just rethinking how you approach stuff like that can, when it adds up, make something of a dent.

[pisces2473]

Jess makes a good point. I'd rather put $300 towards work clothes over a table anyday.

[pisces2473]

LOL just saw this on MSN:
http://moneycentral.msn.com/content/Savinganddebt/Savemoney/P132570.asp

Spare change = big bucks
# 1. Stash a dollar in a jar every time you do the laundry, says blogger LBL.

# 2. Save all your $5 bills in a coffee can. (My husband and I do this so we have extra fun money.) Or save all your $20 bills in shoe box ("I saved for a trip to Europe this way," says Bowers, who earns $1,800 a month working in a cafe.) (Jen's note: I made that much working at an Ivy League university, which was considered excellent pay, so that lady needs to STFU.)


# 3. Cash in your spare change. Many banks and credit unions will sort your change without charging a fee. Or, do it yourself: "We invested in a $30 coin sorter, which has paid for itself three times over," writes a reader who calls herself darcie1590.

# 4. Salt away all those little rebates, refunds and reimbursement checks.

# 5. Take free money. Now some institutions, like Bank of America and even PayPal, are offering what you might call "spare change" savings plans. Bank of America will round up any purchase you make and deposit the extra change in a savings account for you. For a limited time, they�ll even match your spare change up to $250. If you use the PayPal debit card, they'll refund 1% of your purchase immediately, wrote Kit on the blog. Other cards may offer similar deals; don't let free cash pass you by (but beware of hidden fees).

Don't even think about it
# 6. Even if you love to save, it can be hard to sock away that cash -- unless you let Mother Technology do it for you. Nearly everyone on the blog -- and in the WIR -- has an automatic transfer set up from their checking to their savings.

You can do this anywhere you bank, but a number of readers favor ING Direct.

* At 3.4%, ING pays a lot more interest than you can get on most no-minimum savings accounts.
* Because the account is online -- and there's no direct ATM access -- you can't touch your savings without thinking about it.
* Savers can set up multiple sub-accounts at no extra charge -- for different purposes (vacation, new roof, Sally's sweet 16).

To test-drive ING's basic savings plan, I set up an account in 15 minutes to have $25 a week taken out of checking and put into a little account I nicknamed "Happy Money." I'm richer already!

Play little money games
# 7. Create bank errors in your favor. "If I spend $2.16 on a coffee, I deduct $3 (in my check register)," writes AJ. "It really adds up." Several readers share AJ's strategy, including a blogger named Natalie, who even rounds down her paycheck. A $425 check would become $400 in the check register -- and the $25 is saved.

# 8. Make a fair trade. One reader swapped her cleaning skills for day-care time for her child; Beth of the WIR recently helped a neighbor build a fence in exchange for some pocket money; in exchange for some editing, a friend is going to organize my messy apartment. The swaps are endless -- and the savings can be huge. "You can get together with friends and have a clothes or furniture/house item swap," adds Nancy.

# 9. Switch from paper to plastic. A surprising number of women are mega-advocates of relying on credit cards as a way of controlling spending. Some get cash back or miles; some just feel handling cash is too risky. "I don't carry cash, I don't use cash," writes Chris. "This has helped to curb impulse spending, which equates to effective saving."

Caveat: These responsible souls pay the card balance in full each month, often depositing the cash for purchases in advance. Ahem!

# 10. Divide and conquer. Divide the total amount of your car insurance (or other irregular expense) by 12 and sock away that amount each month so you don't get caught short. Lea says she won't blow her holiday budget this year because she's used this system to save each month for gifts.

Never pay full price
# 11. Buy non-perishables in bulk (i.e., cereals, rice, pastas, dried fruit and canned goods); bulk prices are much lower.

# 12. Share the savings. Bowers says one friend will buy toiletries and such at a warehouse store and divvy the spoils up with friends. (Jen's note: JR, don't you live with roomies? You guys could do this.)

# 13. Buy generic instead of brand-name products. "I've stopped eating Cheerios in favor of Toasty-O's -- my paycheck loves me for it, and my tastebuds don't know the difference," writes Chada.

# 14. Research before you buy. Most readers say bargains can be found for any item if you put a little time into finding discount Web sites, clearance centers, warehouse outlets and the like.

# 15. "Look at the Pottery Barn catalog, shop at Goodwill," writes Chada again. "You'd be amazed at what you can turn into a masterpiece with a little paint and stain."

# 16. Fly cheap. Renee recommends mobissimo.com and itasoftware.com -- both travel search engines that comb the Web to find the lowest of the lowest possible prices.

Build it, grow it, make it, cook it yourself
A big way to save on a small income is to embrace DIY as your financial salvation. In addition to sewing, making gifts and homemade cards, cooking at home, and baking everything from scratch, here are some other creative ways to save:

# 17. "We've made lamps, a window seat, a bar, our headboard, a corner sofa and various tables and shelves," writes Kelly. "It's saved us a fortune."

# 18. "There is little that can't be cleaned with (a mix of) vinegar and baking soda," writes ylm23. "We use the mix throughout the kitchen, bathroom, dining room -- and have scrubbed pots and pans with it."

# 19. "Don't forget gardening as a money-saving venture," writes a green-thumbed reader. "One year, I fed the four of us and a neighbor for almost four months from a 10-by-15-foot garden."

[jrwilheim]

Sorry, I'm in the make crap salary and never have any money boat.

really, though, your cost of living is high by virtue of where you live, and, as the adage goes...if you make more money, you tend to spend more money...not save the surplus of what you were making previously. Is it possible to think of ways to live more frugally than you have been? Like, for instance...instead of getting a $300 table you needed to borrow money for, could you have found a second hand on, or a thrift store one that would suffice for a while? Just rethinking how you approach stuff like that can, when it adds up, make something of a dent.

I agree, in theory. I probably could have found a good second-hand kitchen table and chairs and would have been happy to buy a (reasonably nice) second-hand kitchen table and chairs. The problem with that in New York City, though, is that you'll probably have to rent a van to pick up the item, which is $100 in and of itself. So let's say you buy a $100 table used from someone on Craigslist, or at Good Will, and $100 for the van to pick it up. Cheaper than a $300 table, sure, but the savings isn't necessarily worth the hassle.

I also would prefer to spend $300 on work clothes than on a table, but realistically, I can't come up with $300 all at once for EITHER (once in a great while, I'll go into Jos A. Bank and get 2 or 3 things for $100-$150), and it's easier to tell my grandmother I need money for furniture (which I do) than for clothes.

I also feel like this is just generally true of living in the city--that a lot of the ways people save money out in suburbia or the country aren't feasible here. You can't go out and buy 100 rolls of toilet paper at Costco or Big Lots because a) there is no Costco or Big Lots in New York and b) you have no way of getting 100 rolls of toilet paper home.

But I do save loose change, and I do stash my emergency fund in a Capital One account that now gets 3.75% (up from 2.25% when I first got it a year ago).

[jrwilheim]

Regarding paying plastic instead of cash to control spending: a good idea in theory, but I think it doesn't work out very well in fact. Studies have shown that people will be willing to spend up to twice as much for any item if they intend to pay on a credit card than if they have to pay cash up front. So while there's some value to having the plastic keep track of your monthly expenses, it will encourage you to spend more.

[pisces2473]

Yeah, I didn't really agree with that one either...it doesn't work for me.

[winneythepooh7]

I rarely eat out anymore for my meals during the week. I try to bring food with me. That's where the money goes. I was spending on average $10 a day on breakfast and lunch.

There was also a good thread recently started about budgeting. What I thought was good advice is to leave the ATM card and credit card home. Budget out cash you will need on hand for the week. Once it is gone, it's gone. It will help you think twice about your purchases.

I also don't make that much more than you do JR, and I am always able to have money left over at the end of the week/month for fun stuff. Granted right now I am not focused on savings though. My last big debt is my car and my goal is to pay that off completely in the next 6 months.

[shimmer728]

Regarding paying plastic instead of cash to control spending: a good idea in theory, but I think it doesn't work out very well in fact. Studies have shown that people will be willing to spend up to twice as much for any item if they intend to pay on a credit card than if they have to pay cash up front. So while there's some value to having the plastic keep track of your monthly expenses, it will encourage you to spend more.

This has been totally true for me.

Hey Jen--you were the one who gave me the idea to start saving all my change. You're right, it really does add up!

I don't make lots of money at all, but I make enough for where I live. I still run out of money by payday, and I think it's because I nickle and dime myself to death--a drink here, a magazine here, etc.

[PVD99]

35K is not a lot these days. It's decent, but I'd call it enough to just get by. I make more than that in Boston and I can't move out of my parents house on it. I could, but I'd have to live in a nasty, tiny apartment.

[jrwilheim]

35K is not a lot these days. It's decent, but I'd call it enough to just get by. I make more than that in Boston and I can't move out of my parents house on it. I could, but I'd have to live in a nasty, tiny apartment.

I hear you. Part of my trouble is that I'm a Midwesterner and I still (even after 6 years in New York) judge money by Midwestern standards. In Kansas and Missouri, $35,000 a year is a decent wage, more than just getting by, which would be like $20,000 a year for one person.

[wordsmith]

Could you ever live in a less expensive area? Is that even worth consideration?

I've got the midwestern cost of living ingrained in me, too. It makes the prospect of moving to a more costly region (which I will probably inevitably end up doing, and hopefully sooner rather than later) very frightening from a financial standpoint.

[Kitty]

Dude, I make a good amount of money..have a pretty low rent..and I have no money. ever. But, I look good :)

[MetFanL]

Dude, I make a good amount of money..have a pretty low rent..and I have no money. ever. But, I look good :)

I make damn good $$, but I'm always broke. It's b/c, when I wasn't making great money, I still pretended I made my current salary, so I'm paying off debt... Like $500/month and it'll still take me 5 years kinda debt. But, I look good, too, so I don't sweat it. :)

[wordsmith]

For most of us...the more we make, the more we spend.

[Kitty]

I make damn good $$, but I'm always broke. It's b/c, when I wasn't making great money, I still pretended I made my current salary, so I'm paying off debt... Like $500/month and it'll still take me 5 years kinda debt. But, I look good, too, so I don't sweat it. :)

Sigh. I totally relate. When I first got out of college I was making decent money - but I was living like I was making A LOT more. Plus, I had to pay the expense of living in the City. I racked up some fatty debt.

I'm still living like a rock star, and its not helping the debt much. I also pay off about 300-500 a month. For some reason, it doesn't seem to be going down too fast.

[LakeJay]

I'm like you two, Met and Kitty. I started out of college with a pretty good starting salary and no concept of money. Kept using the plastic with the idea that I'll have the money to pay it off later...and yeah I have the money but the debt to exceed it :p . I know I'l eventually have it paid off but it will take a year or so. I'm still having fun going out and travelling but more with cash/not so much credit and I still look...alright? :confused: :D

[lilyflower]

Is anyone else out there in this boat? I feel like I make a decent enough salary ($35,000 a year base, maybe around $40,000 with overtime), admittedly not a huge salary by New York City standards but still a good chunk of money, and I feel like I never HAVE any money. It all goes to savings, student loans, my IRA, rent, and food. I am so SICK of it being a big struggle to raise the money for anything that costs more than $100. I really need a new suit for going to court and/or going on interviews, and I can't raise $200-$300 to buy one. When I needed a kitchen table, I had to borrow the $300 for it from my grandmother. Argh! I don't spent money on crap like going to Starbucks every day or expensive vacations or clothes I don't need, so why is raising $300 on a $40,000 salary such a problem?

You live in New York, you're not going to have lots of extra income unless you make double your current salary.

Yeah, I know the feeling, I live out in Jersey but the cost of living here is insane.

[Kitty]

I'm like you two, Met and Kitty. I started out of college with a pretty good starting salary and no concept of money. Kept using the plastic with the idea that I'll have the money to pay it off later...and yeah I have the money but the debt to exceed it :p . I know I'l eventually have it paid off but it will take a year or so. I'm still having fun going out and travelling but more with cash/not so much credit and I still look...alright? :confused: :D

The thing is, you're only young once...and you might as well have fun while it lasts. :D

I could never be one of those people that sacrafices fun, excitement, whatever - for the sake of saving a bit of money. It's just not me.

[coll214]

I could never be one of those people that sacrafices fun, excitement, whatever - for the sake of saving a bit of money. It's just not me.
Same here, and that's why my CC debt is larger than i'[d like. But i figure I pay towards it every month, i'm never late and have tried to curb the spending a wee bit... but i'll always take the trip first and worry about paying for it later :p

[MetFanL]

Same here, and that's why my CC debt is larger than i'[d like. But i figure I pay towards it every month, i'm never late and have tried to curb the spending a wee bit... but i'll always take the trip first and worry about paying for it later :p

Me three, ladies. That's my problem. I'm young-ish, single... I just don't see the point of denying myself. I'd like a house, but I'm not a freak about it, so I don't stress. I'm trying to pay it off and my raise has given me flexibility to do that, save and have some play money, too, so I should be in good shape now. It just s*cks that it's going to take this long -- if not longer.

[shimmer728]

I'm another one, girls. Racked up a few thousand in credit card debt right out of college because I was used to living off my parents and having the freedom to blow my money on whatever. But I'm like coll. I'm never late with payments, I pay at least double my minimum payment, my credit is good......I'm only 25......it's cool.

I could pay it all off if I sold my handbags and jewelry, but fuck that! :p

[analogman]

jrwilheim,
I know exactly how you feel. We live paycheck to paycheck too. So much of my paycheck goes into taxes and savings; we have nothing left at the end of the month. It baffles me how money just disappears :eek:

I think WordSmith gave you some good ideas about buying cheaper furniture. You can definitely save money buying used though it is not necessarily always the best idea. Sometimes it is worthwhile to pay more for something you really like that you know will last for a while. It can also be considered a treat for yourself :)

Piesce's post also had some good ideas. For things that are paid periodically (i.e. Christmas presents), divide the budgeted amount by 12 and save that amount each month. It's much easier than coming up with a pile of money to pay for presents at the end of the year.

I also extend an interest free loan to the US Treasury by claiming less withholdings than I am entitled to. This way I get an annual tax refund that we can use for a vacation, buy furniture, or some sort of other large purchase. I am VERY worried that if I have money I'd spend it, so I do a good job of hiding it from myself.

Edited to add:
I use my credit card to pay for just about everything and pay it off in full at the end of the month. If you use a shopping list and only stick to the list, you can not overspend. It is possible to not be part of the statistics ;)

I also like ING Direct for saving cash. Getting access to the money is inconvenient and takes a few days, this really helps with large impulse purchases :D

[MetFanL]

I've started to try to take any "windfall" money and put in immediately in my savings. Like checks for travel expenses, birthday checks, any random refunds, that kind of stuff... It's little but it adds up.

[red]

jrwilheim,

i bring my lunch everyday. that saves a lot of money. i bring bottled water too, snacks, everything. it all adds up. don't order take-out for dinner, cook instead.

keep a list of where all of your money goes. you are making about what i make, so i know it's not easy here. here is where my money goes:

mortgage, maintenance fees
Con Ed
Cable/internet
Cell phone
home phone
car payment
car insurance
etc.

then see what you can eliminate. i hear you though. until a few months ago we were eating off of a folding table and sitting on couches that were older than i am (27yrs). i rarely have money to buy clothes. when my husband was out of work we just cut back on all that stuff as much as possible. in some ways it was good that it happened bcs we got used to living poor.

i think putting money into savings is a good thing for you to be doing. it might suck now but if something happens, you'll be glad you did! seriously, my husband's company went out of business, and then of course a couple of weeks later he needs a root canal. i was glad we had savings, otherwise it would have killed us.

ETA: we also have an ING account and the money goes in automatically. i love it!

[PVD99]

I agree with the whole "you might as well have fun, you only live once"...but if it's going to send you into five figure debt, it's probably not the right thing to do.

[wordsmith]

It IS possible to have fun and live a good life without racking up massive debt.

[PVD99]

^I know. Like people who have to go on an expensive vacation will just put it on their card. Why not just wait a year and save up for it? Then you won't have debt. I agree with using credit cards as a float, but I just don't think credit cards are cash. I've learned my lesson the hard way. I paid all my credit card debt off, and I'm not using them if I don't have the money. The interest and long term ramifications just aren't worth it to me.

[MetFanL]

I agree with the whole "you might as well have fun, you only live once"...but if it's going to send you into five figure debt, it's probably not the right thing to do.

Well, of course not, but at least I'm not as bad as this (http://timesunion.com/AspStories/story.asp?storyID=411337&category=&BCCode=&newsdate=10/21/2005) guy.

[jrwilheim]

jrwilheim,

i bring my lunch everyday. that saves a lot of money. i bring bottled water too, snacks, everything. it all adds up. don't order take-out for dinner, cook instead.

keep a list of where all of your money goes. you are making about what i make, so i know it's not easy here. here is where my money goes:

mortgage, maintenance fees
Con Ed
Cable/internet
Cell phone
home phone
car payment
car insurance
etc.

then see what you can eliminate. i hear you though. until a few months ago we were eating off of a folding table and sitting on couches that were older than i am (27yrs). i rarely have money to buy clothes. when my husband was out of work we just cut back on all that stuff as much as possible. in some ways it was good that it happened bcs we got used to living poor.

i think putting money into savings is a good thing for you to be doing. it might suck now but if something happens, you'll be glad you did! seriously, my husband's company went out of business, and then of course a couple of weeks later he needs a root canal. i was glad we had savings, otherwise it would have killed us.

ETA: we also have an ING account and the money goes in automatically. i love it!

Yeah...I've made stabs at brown bagging lunch. What typically happens is I forget I made the lunch the night before and don't grab it out of the fridge on my way to work. But I'll try this again. I don't order much take-out for dinner, and when I do I make it last two days.

[red]

jrwilhelm, maybe write yourself a note on the door about the lunch the night before?

buying lunch where i work costs like $10 a day. that is $200 a month. it adds up!

[Kitty]

It IS possible to have fun and live a good life without racking up massive debt.

I have expensive taste and like to travel, pay for my hair, etc. I am living somewhat beyond my means..but I don't really want to sacrafice the type of lifestyle I have.

Also - I'm not going to rack up serious debt. It's not like I'm going crazy or anything.

[wordsmith]

Sure. But, I bet if it became an inevitability, you could still have a good time on the cheap.

[Kitty]

I could still have a good time - but I wouldn't be dressed as well doing it ;)

[wordsmith]

I have no doubt... ;)

[analogman]

Well, of course not, but at least I'm not as bad as this (http://timesunion.com/AspStories/story.asp?storyID=411337&category=&BCCode=&newsdate=10/21/2005) guy.

As a shareholder, I'm thinking maybe I should get out of their stock soon... :eek:

[ebruening]

It IS possible to have fun and live a good life without racking up massive debt.

I agree, Words.

Jrw - you might consider getting a weekend job. I work a weekend job, in addition to my full time teaching position, and it has helped me keep my finances in order...especially with the acquisition of a new car this past week.

[Mn84evR]

After reading through this thread i feel even worse about my situation. I live in Toronto, and make just under 30K and am DYING to move out!!!! Trying to figure out my expenses, and i don't have that many, but rent is expensive. All of your cost saving tips are great, but i guess i'll have to up my salary very very soon. :(

[jrwilheim]

I agree, Words.

Jrw - you might consider getting a weekend job. I work a weekend job, in addition to my full time teaching position, and it has helped me keep my finances in order...especially with the acquisition of a new car this past week.

Taking a night or weekend job isn't really a possibility for me because my boss occasionally needs me nights or weekends when there's an urgent deadline in a case, and I can't really tell him, "Sorry, I can't be there because I'm due at my night/weekend job"...one of the disadvantages of being in a professional job, I guess.

[wordsmith]

Yeah, I can't work a part-time job, either, because of the on-call aspect of what I do. Plus, there aren't THAT many more hours in my week.

[jrwilheim]

Yeah, I can't work a part-time job, either, because of the on-call aspect of what I do. Plus, there aren't THAT many more hours in my week.

And even if there were, we're all entitled to some R&R some of the time.

[wordsmith]

Yeah, I'm bad w/ that. That's why I escape to the internet, frequently. But I need some real R&R. Right now, my R&R consists of grabbing a couple of hours to watch a DVD now and then.

[shimmer728]

I've thought of getting a second job......but frankly, that would cut into my weekend time with WB. I'm really not THAT hard up. If I ever got to the point where I couldn't pay my bills, that would be another thing.

[wordsmith]

Don't you every have to cover stuff on weekends, shim? Or is that only moi?

[shimmer728]

Don't you every have to cover stuff on weekends, shim? Or is that only moi?

Actually, my current job is pretty sweet. There's 12 reporters, and each of us have to work a weekend shift (Friday, Saturday and Sunday night, 3-11 p.m.) about every 2.5 months. It's quite a change from my last job, which required me to work every third weekend. So no, I don't often have to cover stuff on the weekends. If something happens to be going on in my coverage area over the weekend (and believe me, hardly anything ever is!), then the weekend reporter takes care of it.

However, I have to work a fair amount of evening on-call shifts, plus night meetings. So that would interfere with a second job.

[wordsmith]

Yeah...there are two of us. And one doesn't live in town. So I get it all after hours. Blah.

[winneythepooh7]

What about Per Diem work? That way you are not obligated to go in, however, you can pick up a shift here and there for extra cash if need be?

[lilyflower]

What about Per Diem work? That way you are not obligated to go in, however, you can pick up a shift here and there for extra cash if need be?

Unfortunately that doesn't work for everyone. For example, I work more than 40 hours a week most weeks and I also go to grad school two nights a week. I don't have time for everything as it is, never mind picking up a shift every once and a while, though I guess if I wasn't in school I could probably do unit secretary stuff per diem again. At the same time though, it feels not even worth it because even at the highest point of what I'd get paid doing that I'd probably only make half what I do an hour at my day job, max.