Help! My living costs are CRAZY!!!

[thearcheologist]

Seeking some advice on current personal budget breakdown as I feel I live very frugal, however, I just cannot wrap my head around how a single person with a dog needs $100,000.00 a year to just live???

Salary [AU] $100,000.00 p/a + super
Fortnightly take home pay: $2,932.04
Fortnight expenses: $2,948.05

Breakdown:
1. Salary has just been risen, so another pay rise won’t be on the cards for a while.
2. I drive Uber some evenings and weekends to assist, but I haven’t included the amount in this as 3. I don’t rely on the Uber work (more so doing it for tax purposes).
4. Rent $840.00 a fortnight, 8 months left on lease. I live in an expensive city, and sharehousing isn’t much cheaper, and this way I have gotten a place walking distance to work, so I save on petrol there.
5. Home (bills + cleaning supplies + clothes washing) $80 p/f
6. Gym $48 p/f
7. Car (repayments, petrol, servicing cost, insurances, rego, cleaning) $615 p/f
8. Dog (insurance, medicine, food, cleaning) $180 p/f
9. Food (groceries, eating out) $250 p/f
10. Drinks $50 p/f
11. Electronics (phone + watch bill) $64 p/f
12. Tolls and fines $50 p/f
13. Self maintenance $150 p/f
14. Health (insurance, health care, vitamins) $165 p/f
15. Entertainment $150 p/f
16. Gifts $75 p/f
17. Subscription $5.55 p/f
18. Bank fees $15 p/f
19. Pay back partner ($1500 owing) $60 p/f
20. Pay back parent ($4000 owning) $150 p/f
21. Divorce costs $40 p/f

 

[shawnab]

@thearcheologist You're bleeding money all over. Tackle housing and car first. Get a roommate if need be and find a cheaper car or other alternative.

$150 on "self-maintenance"? What does this even mean? Ditch that baby seal oil or whatever is so freakishly expensive.

$50 on fines? You are clearly doing something wrong if this deserves its own line item.

Good news is there is lots of room in all areas to really turn this around.

Check out MrMoneyMustache for some heartfelt advice about dealing with first world lifestyle creep. Life should be easy with your pay!

 

[joemiller]

@shawnab Baby seal oil! I’m dying!

 

[jnxt]

@shawnab Definitely agree with your points.

I know from experience if they’re in Sydney then they could save heaps by using public transport over having the car.

Lifestyle creep is definitely a thing, so cutting back on luxuries that don’t make a big impact can make all the difference.

Also, perhaps the private healthcare is not needed in their situation.

 

[briantheguydude]

@thearcheologist Oh boy. You’re spending $1200/mo on car-related expenses (while walking to work) and $300/mo on drinks/entertainment plus $500/mo on food. You’re in debt yet you keep living way above your means.

 

[kewiesterrock]

@thearcheologist It’s simple - get rid of your car.

Your car is costing you $615 p/f. That’s over $1,300 per month. That’s around 20% of your paycheck. Get rid of it and you’ll be fine. Especially since you paid a premium on your housing rental to be in walking distance to work. Additionally, you wouldn’t have to pay $50 in tolls and fines p/f as well.

From that $665, carve out an Uber budget. Not sure which city you’re in, but if it’s either Sydney or Melbourne, you can definitely get away without needing a car.

You’re in decent shape, honestly. Once you pay back what you owe to parents and partner, you’ll have an additional $210 p/f as well. That’s $875 p/f in total for reallocation once you do 2 simple things: get rid of the car and pay people back.

Also, I’m seeing comments here saying you’re living above your means by spending $50 p/f on drinks? Lol wtf. No … that’s a completely reasonable amount in an expensive city.

 

[gibson]

@thearcheologist I agree with @hubadub

For me it helps to remove a chunk from each category, where applicable

e.g. reduce gifts from $150 p/m >> $100 p/m

Some suggestions:

1. I believe a roommate could help reducing your rent (if not 50% maybe 30%)
2. You could find a gym subscription with $50 p/m
3. the car... with such costs it's like buying a new car every year. As suggested, you could buy a more affordable one and reduce the cost to $500 (which, still, I believe is too much) You may even start using public transportation, with significantly lower cost
4. Now as far as, Drinks, Tolls, Self Maintenance, Entertainment, Gifts are concerned you pay total $950 p/m. Easily can be cat in half

All these together (worst case scenario) add up to: $500+45+730+425= $1700 (costs that can be reduced)

If my math are correct you can reduce your costs for $1500 - $2000 p/m

Though, imo don't cut everything the same time. Give your mind the time to think and digest the new "life". One step at a time

Start the 1[sup]st[/sup] month with the gym subscription, the 2[sup]nd[/sup] with Drinks, etc.

As far as your debt is concerned, look for 2 methods

• Debt Avalanche (pay the bare minimum for all debts and then pay the one with the highest interest)
• Debt Snowball - (pay the bare minimum for all debts and then pay the one with the smallest amount)

 

[hubadub]

@thearcheologist

I just cannot wrap my head around how a single person with a dog needs $100,000.00 a year to just live???

Look into the 50/30/20 plan as well as some of the basic personal finance ratios.

Couple of observations:

1. Your housing is at the higher end of what is recommended (25% of gross income for all housing related expenses) but it isn't unreasonable
2. Your transportation expenses come out to 16.6K a year (615 * 27), which is - very - high for someone with your income. This should be around or less than 10% of your gross income, or 10K a year.
3. You're paying off 5.5K worth of personal loans. It also looks like you have other consumer related debt or obligations (car payment, phone payment, watch payment).
4. Your 'wants' also look rather high. 96 AUD a month for a gym membership, 300 a month for entertainment, 360 a month for your dog, &c.

Anyway, here's what you may want to do:

1. Read the /r/personalfinance wiki and the Bogleheads.org wiki's front to back.
2. Watch Dave Rasmey's YouTube content.
3. Add up all of your debts. Make a plan to have everything paid off within a year.
4. Figure out what to do with the car. This should likely go and be replaced with something more affordable.
5. While you're doing 3 and 4, identify all of the other 'wants' you can cut out. Your goals are a. to be debt free and b. to have a 20% savings rate once you've paid off your debts.

 

[elv]

@hubadub To me the 50/30/20 plan is backwards. Should be 50% Savings, 40% living expenses, and 10% for “fun” (but even then that might be too high).

 

[idliketohelpyou]

@thearcheologist this probably isn’t what you want to hear, but since you asked…

invest in some personal financial software and start tracking every. single. penny. unless and until you do this, you won’t ever truly understand your finances.

cancel your gym membership and get some used exercise equipment on craigslist. not a day goes by i don’t see multiple exercise equipment for free on this site. or take up running or hiking (again, free) this is an expense you cannot afford.

cut down on leisure (drinks, coffee, dining out, etc.) gifts, self maintenance (perhaps a euphemism for thc?)

stop buying the latest phone/watch/ipad upgrade. your electronics can last years and the notion that everyone needs the latest model is ludicrous (don’t know if this applies, only that i see a lot of folks fall into this trap and bankrupt themselves in the process.)

 

[anora]

@thearcheologist Get rid of the car or get a cheaper car. You walk to work anyway. Problem solved.

 

[resjudicata]

@thearcheologist Drop the dog insurance. That’s pretty silly.