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In debt, in school and want to buy a home and live comfortably!
Hello, I am 22 and will be attending my last year of school an hopefully get my social work diploma. So far there have been some budget cuts to the social services sector in Ontario (Canada) and I am concerned about the quality of work I will be able to get when I graduate. I anticipate I will be about 4000 in debt when I finish school, as I have saved all my life and have been able to pay for most of everything myself (school, braces, books, clothes etc). My family was never really financially "comfortable" and so I have never been the spoiled child. I have been dating someone for 6 yrs and he too comes from a similar background and not financially comfortable. I love to go out and do things with him (travel, camp, shows etc) but it is really hard to afford and so lately we have been trying to compromise about where we can cut our expenses. The thing is I am not cutting on my savings and he will not cut his car expenses which I respect because we are still individuals an have the right to spend on whatever we desire. My problem is I would love so ideas on what I can do for free!!! And what I can do to feel better about myself financially. I help my mom out at home and btw do not like living at home (my mom smokes in the house and I have asked her to stop or smoke outside and it is a constant fail so I gave up) . Do right now I make 900 monthly (255-bills such as home phone, cell, cable & Internet, 125-savings, 200- debt, 80-120 on transportation which leaves about 200 for food, school medical and everything else monthly including entertainment.) I just would really love to be spoiled right now and have someone pay for everything for me! I am So frustrated with being poor!!! Please help, there really isn't much I can cut down on. The bills are mostly to help my mom out! Should I tell her I can afford to help her out anymore? What are some things I can do for free to give me time to relax and enjoy myself and my bf!!! Please help, any ideas are better than no ideas. THANKS
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Maybe give some free advice about: Personal Finance?
You chose social work for a major and career, and I must ask, what the hell were you thinking? Social work, really? How do you expect to make any money in your lifetime with that career choice? I would suggest changing your major to something that will at least pay a living wage.
In the short term have you ever thought about a part-time job or full-time career in the performing arts? There’s this great place down the road from me called “Pole Position”, and I hear that people throw money at the performers. Seriously though, you should do what most sane clear-thinking women would do in today’s society, dump the bum! If you have a job that isn’t going to be self-supporting, then you need to find a sugar daddy that does. Stop thinking of things you can do for free and find someone who has some serious cash. However, if you chose to go the boring route and stick with your bum, I do have some good suggestions for free entertainment.
Take a trip to one of your local smut stores with your boyfriend, preferably one with peep booths, but when you get there, don’t go in. Instead, open the door and laugh and point at everyone you see, and then run! Another activity involves spending some money, but great fun is guaranteed. Take your parents for a ride. Make your next stop a convenience store, but park on the side or somewhere you won’t be seen by many other patrons. Have your boyfriend go in for snacks and offer to buy your parents a snack or drink too. When your hubby comes back, have him run to the car wearing a ski mask, get in, and tell you to floor it. Do this after you have told your parents you’re pregnant and getting married because you have to. Maybe not the greatest of activities for a future social worker, great fun nonetheless. A social worker, seriously?
Mother Theresa would appreciate your career choice, but your ‘bank’ won’t. Yes I said bank and not bank account. You can be one of two people when you go through the drive-thru at the bank: the one who barely gets a greeting and a smile from the snotty teller who can see your finances on the screen in front of them, and then your given some cheap dollar store suckers for your kids; or you can be the person that gets smiles and adulation from the gold-digging tellers, not only that, they just may break out the big candy bars for your screaming little brats in the back seat. The choice is yours, who do you want to be?
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Many people are not financially literate and then they find themselves in very serious problems. It's not your fault or etc. People in general are afraid to talk about money. They let it control them instead of them controlling it. I believe it is a good thing to help out your mom with her expenses, but if you are struggling with debt you should be honest with her about finances and talk to each other. I'm going to tell you what I think you should do. This is only advice, but I want to tell you how I actually paid off over 26000 in less than 18months. First thing is that you actually have a better mind set than most people do about money. At least you do not go overboard and pay everything on credit or loans or etc. Those are the worst things you can do.
I found out after reading hundreds to even a thousand economic and personal finance books of what it really takes to become financially literate. Im not becoming rich as in money. I just want enough money to be comfortable. What will make me rich is having a good life and good family. That's where social media lead everyone wrong. Im glad that you are similar to me in your respect for life and your values. It took a lot of research and reading for me to conclude to what actually helped me out and now I am glad to help out others. I want to see others succeed. So here's what I did. One person I think is a financial genius in getting out of debt is a person called Dave Ramsey. He has a plan of getting out of debt called the debt snowball. You should review that. I followed his plan and am almost done. I made poor decisions in my life, but unlike certain things he says to do, I didn't sell anything to get out of debt. I made a small emergency fund of 1000 dollars and beleive me it comes in very handy. You don't know how many times I have needed it. Next I cut some expenses on things I didn't need. I looked at my budget and saw where I spent a little too much on eating out or even having coffee or etc. I freed up some extra money monthly. Even if it's only 10 to 25 dollars, beleive me it makes a difference. Next i made sure I paid all my bills even the minimum payments. Then I took the one that had the smallest balance and I added that extra 10 or 25 dollars to the minimum payment. So pretend that we talk about you loans. Say yoour student loans were 3 of them them to equal the full 4000. So one is 500. Another is 1500 and the last is 2000. I would pay the minimum on all three to make sure they were current, but I would start with that 500 one. If the minimum was say 25 dollars. I would pay 25 and add 25 (25+25=50) So my new payment would be 50. Now I increased my payment by more and then The bill would go away quicker. What happens is once you finish that one and move to your next one. The next one is 1500. So say the min. amount for that was 100 per month. I would pay that every month while I paid off the first. Then when I finished I would take the 50 i was paying on the first and add it to the next one to = 150. So now that payment went up. Then I paid that until I finished. See how the process works. The reason you start with smaller to bigger is that it is more a psycological impact. You feel better with your accomplishments. Next thing is that you do not go into debt again. Always spend less than what you make and don't go into debt again. Once you do that plan of the debt snowball, I suggest you save a big emergency fund of at east 3 to 6 months of income. I myself and saving while paying down debt now. I started with little being able to pay on my bills but now I am saving alot and putting a lot on debt. Sacrifice for your debt as it is only temporary. Once you save your emergency fund you should invest for your future. Im also not saying give up all fun too while you get rid of your debt. Sacrifice enough that makes you comfortable. When you save for your future, think about your retirement and also things you want in the future like a house or etc. When you invest use a retirement account or IRA. Im not sure exactly what Canada uses but research your area. Use the power of compound interest and passively invest for your retirement. Also make money work harder for you. The emergency fund should be place in something we call liquid. No I don't mean water. LOL. It should be someplace safe that you can easily get to it if you need it fast for an emergency, but not so easy that you are tempted to just grab it and spend it. Don't boyfriend control your money either. No offense. I'm sure he is a good guy, but until you are married, be careful. Once you are married you guys should respect each other and share certain income for bills you have together but also have your own spend income for things you like to do. Anyways back to the emergency fund. I suggest you save it and put it into an online high yield savings account where you will get more return on your interest on your money than a regular bank. Right now most economies are pretty bad, especially in the financial sector so interest rates are really low. Be careful on the accounts you find. Make sure these accounts do have hidden charges or fees. Also when investing diversify, I suggest index funds that are mutual funds and are no load funds. These give you more bang for your buck and allow you to be diversified upon diversification. Educate yourself on basics of investing. If you do a passive approach to investing, then you are more conservative and not trying to beat the market. Let your money sit there and go in. The market will go up and go down Let it work automatcally, but what you have on your help is time my friend. Over 30 years until you retire. This will help you financially and you will be way ahead of your peers if you can start while you are younger. But first get out of debt. That is one first way you are saving for the future. Things work a little different here in the states then canada, but some things work for most apsects of finance. The other thing you can do is keep working and get out of debt meanwhile, but do try to increase your income. I hope you find a good job as a social worker. My cousin is one ehre in the states. She loves it and I think its a great field. If you can earn more then better. Just supplement your budget accordingly and contiue to live like a college student until you get out of debt and build the emergency fund. Trust me you will thank me later for it. Make sure you know your rules and laws for the retirement and handling money. Always look for ways the finanical institutions can take money from you. Don't be paranoid, but search for the hidden fees. Read the fine rpint. My other suggestion, and no offense to your boyfriend, but don't finance or lease a car if you can. That's a bad investment. Sure you need a car, but if you reall the millionare mind and other financial books they will tell you that most millionares don't lease or finance cars, and most actually drive simple cars such as a toyota or something. Not the flashy BMWs or ferraris or etc. Sorry for any mistypes or spelline errors. I'm just trying to write all this really quick while things come back in my mind. Hmm. So lets see. The next thing to know is rules on mortgages. Know the rules for Canada. I know over here in the states that if you want to be financially successful that eventually you should own your own home. Here I ould not even think of mortgaging a home unless I had no debt, a full funded emergency fund, and started my retirement savings, and most important had 20% downpayment to avoid the PMI fees . I woud also make sure I had enough to pay the mortgage with out it taking more than 1/4 to 1/3 of my take home income. Also rememebr that with everything comes more responsibility. What I mean by that is for every action there is always a consequence. What I like to do is think about it in terms of Assets and Income vs. Expenses and Liabilities. Read R. Kiyoski's "Rich dad poor dad". You will understand it better, but what he says is to increase your income and assets and decrease your expenses and liabilities. So with the mortgage as an example this is what happens. If you are paying rent say like 300 or what you stated, but now you mortgage goes to say 600 a month, you have now increase your expenses and now your liabilities too. Here in the states, with a mortgage comes other things, such as taxes, HOA fees, utilities, insurance, etc. So now your expenses and liabilities increased even more.Liabilities are anything that takes money from you or has the ability to take it from you. You will always have some sort of liability and some expense, like food, cell phones, etc. But dont get too crazy over spending on things. The other thing is to increase the income and assets. If you can make it to the point where you have you assets create a postive cash flow to make more income. What i mean by that is later when you are older and have no mortgage or etc, rent out your paid for house or etc and then move to another house. Have the mortgage be paid for on that one from the rent of your old house. See people in the real estate business make major mistakes by spreading themselves too thin. Don't look for quick rich schemes. Don' spread yourself too thin. Make it so you create a passive income without putting yourself at risk. First off your first house would be paid in full so now if anything you decreased your liabilties and expense a little bit, but you should still have property taxes and etc. Always decrease your risk to things. Having a plan and following it. Some things you will need to readjust along the way. I pull from all these books different things i like. I don't listen to dave ramsey on investing but his getting out of debt plan is almost genius. So simple yet we don't use our common snese. I diversify using passive approach in both bonds and stocks. But research what you are investing in and understand the terminology. Most people are just too lazy to get out of debt and learn to invest and etc. If you want a list of things I studied and books I like I can send you some awesome lists and the best ones that i like personally. So, before I mention the last thing, I just wanted to show that with the mortgage you created a safety net by having your first mortgage paid in full and lowered your risk while lowring your expense and liability. When your mortgage is paid in full you actually own something and now have a positive asset. Now to create a passive cash flow to create a passive income can be through real estate by then turning around and renting out that house while you go and live in another house. Then hopefully the rent on that place will cover the mortgage on your new place, so now someone is practically paying you to live in your newplace. Another way is to be an entrepeneur. Start a business on the side. Find and do something ou enjoy doing etc. The list goes on and on. My point is that you create a passive income so other than your work as a social worker you have another source of income stream coming in. Passive meaning you doint have to go out and physically work for it. Like to rent on the first place. It now comes to you without you having to go out to earn it. That's how the rich become rich. The other thing is to not be greedy. Donate and help others, but don't be a sucker. Give a man a fish and you feed him for a day, but teach him how to fish and you feed him for a lifetime. Knowledge is power. Don't make rash judgements. Learn not to be greedy. make money work harder for you. Money is just a tangible object made by man but a necessity to survive. Your actions and judgements on what yo do with your money are what is going to lead you. Don't let it control you. Also do protect it enough. Understand the true value of trusts and corporations. People are stingy and very greedy. If you don't educate yourself and become financially literate, then you are no different than anyone else. I proud of you for doing those things and asking these questions. I used to be really poor and ignorant. I blamed the rich and etc and said life is unfair. But no it was my own fault. Rich people are very intelligent. They learned what was necessary to earn it. IF you want to be a millionaire, do what a millionaire would do. The real ones don't go and act like hollywood and etc. Sure its ok to buy nice toys and things, but remember they are all just tangible objects mad by man. Real richness lies in your beliefs ad what you feel is rich. By the way, I actually live in Los Angeles. I was born and raised here and I went to good private schools, but then my high school year we lost everything. So I have seen the best of all worlds. I hope to see you guys successful at life and anyone else who reads this LOL. If don't understand this post then it's on you. I did my part. I tried to give suggestions.
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stop spending your money 4 fun and pay the money 4 how owe you .It will take 1 year and months then your free or you should work extra work.Good luck =)
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Right now, your options are going to be limited. You don't want to take on more work while still in school, because getting through school is the most important thing.
I would not suggest stopping paying bills for your mom: if you're an adult living at home, you should be contributing somewhat to the household expenses.
This is a rather location-dependent suggestion, but if you're spending $255 monthly on bills at home, plus $80-$120 on transportation, it may be less expensive and less time consuming for you to move out of your mother's house. I'm in Hamilton, and the average room in a student house will run you about $300-$450. If that's not your cup of tea, you could try finding a roommate online to share a smaller apartment. Another option is to discuss the possibility of moving in with your boyfriend. It's not like your relationship is new and fragile at 6 years. Depending on what his living situation is, it could save you both money.
You are absolutely correct in refusing to lower your savings. It's a great idea to have savings in place in case something happens and you lose your job or are out of work. Really, I don't think you should be feeling at all bad about yourself financially! Do you realize that you're better off than most new grads? The average grad leaves school with $17000 of debt in Ontario. I have co-workers who have had to go back to school, taking on more debt, just to avoid having to start making OSAP payments because they couldn't find full-time work. Your smart thinking has kept you out of the pit. Being poor is a temporary situation for you. Even if you have trouble finding work in your field right away, you have the right money sense in place to keep you out of trouble, and that's something not a lot of people have. You don't learn smart spending by having excess amounts of money! Trust me, those skills you're learning now will carry you through life. I am so glad that I learned how to feed us both on $30 a week, because it means that bumping our budget up to $75 a week makes us feel like royalty :)
Some things that my husband and I did a lot while we were in our poor student phase: picnics, walks in the park, free events in our city (no matter how weird they sounded). If you live in a larger city, you'd be surprised at how many free or very inexpensive things are around this time of year: concerts, film festivals, street fairs, buskers. All lots of fun and easy on the wallet! We also made sure to budget for entertainment, even if it was only $20 per week for the both of us. It meant that there was always money for us to go see a movie, or we could save up for something bigger. It made sure that we weren't splurging on bigger things that we couldn't afford.
Stay strong. It's just a little longer, and you'll be out of school and able to take charge of your finances. If you keep being resourceful and responsible, you will do just fine.
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