9 Brutally Honest Reasons Why Your Finances Suck

It seems like everyone is struggling to make ends meet, especially in this day and age where the 35 and younger demographic are have to work multiple jobs, move back in with their parents, take on roommates, and delay the things they’ve wanted to do in their lives (like marriage, kids, vacations, luxuries etc) because they have become wage slaves. The US has over 800 billion in credit card debt and over 1 trillion in student loan debt. Hopefully some of this information will help you to remove yourselves from such statistics.

1. You don’t know where your money is going

I think this is one of the biggest steps to figuring things out. First and foremost, you need to write down everything. Take a look at your income, and subtract from it obligatory expenses. Then you need to see what you’re doing with any money that’s left over. One of the issues here is what do people consider “obligatory.” I know that in this day and age, for instance, everyone needs a phone. Do you need the latest and the greatest phone on the market, or can you manage with a crack-dealer flip phone that doesn’t have a whole lot of features? Maybe you can just switch to a cheaper plan.

There are online programs out there that help you manage your money so that you can get a bigger picture of what’s going on. Three that come to mind (all of them free) are Mint, Personal Capital, and You Need a Budget. When you’re managing student loans, monthly bills, trying to save, and just leisure expenses, it gets hard to keep track of it all. These programs will help alleviate that.

One thing that rings true is that there is stronger effect psychologically if you use cash instead of a credit/debit card. It’s easy to swipe your card, but with cash, you actually see your wallet getting a little emptier with each purchase. It will make you think a little bit harder before you make the next purchase.

2. You don’t work enough

I know the job market sucks right now, so working more is easier said than done. Additionally, there’s stuff like school (and the homework that goes with it), possible childcare, and of course time for yourself. That being said, the benefits of working more (especially more than 40 hours) is two-fold. Firstly, you’re making that much more money. Secondly, you have less time/energy during the day to go out and spend that money. It definitely would be nice to have one good job as opposed to multiple crappy jobs, but until you get to that point, utilize your time to the best of your ability.

3. You don’t do your homework with your shopping

Someone is always having a sale, especially if it’s close to a holiday. Some companies benefit certain demographics (teachers and military for instance). Sometimes going on sites like craigslist/ebay for certain merchandise is the best course of action. Online shopping in general tends to be beneficial because you can get things straight from the warehouse, and it’s easier to compare prices of various items. Also, sometimes it’s as easy as talking to your friends and coworkers. Someone may be trying to get rid of something that you’re trying to buy, or they may know of some particular location that sells things a lot cheaper than your typical go-to places.

4. You love your name brands

Store brand stuff is always cheaper. I know that store brand soda might not be as awesomely delicious as that Coke/Pepsi product, but if you’re trying to get your numbers in order, this is another way to cut corners. You would be surprised how much people really DON’T care about how up-to-date you are with the trends. Me, for instance, I couldn’t care less about your $200 Air Jordan 4s when you already have them in another color…along with having the 6s, 11s, and 13s. Having dollar tastes on a dime budget is just going to create a lot of heartache.

5. You give in to peer pressure

I’ve had plenty of friends tease me about not wanting to do things that involved spending money. But when we compare notes, I’m doing better than they are. I know people want to enjoy life to the fullest and don’t want to feel like they’re “missing out,” but there should be some significant planning for the future. 1-2 years of sacrifice now will make for a world of difference.

6. You’re stretched too thin

You are out on your own and, you’ve got your big boy pants on, so you want to conduct yourself like one. You get married, get a house, have your 2.3 kids, and get the latest cell phone, the fastest internet, cable TV with a million channels, and the 2 cars, and of course insurance for all over the place. SLOW THE FUCK DOWN. Maybe put a good chunk of those things off for a while. I personally believe that someone shouldn’t look into the whole family life (aside from marriage) until their student loans are paid off.

7. You’re not aggressive with your debt

Let’s crunch a few numbers. $25000 student loan with 5% interest rate paying $250 a month. With just the minimum payments, you pay $7283 in interest and it takes you almost 11 years to pay off. An extra $100 a month (probably about the amount you spend on eating out) saves you 45 months in payments and $875 in interest. Maybe the $875 isn’t all that big of a deal, but going almost 4 years without having that thorn in your side should be enough. I don’t know about other people, but I am not exactly a fan of getting a monthly reminder by some company telling me that I owe them money.

8. You’re trying to date (more targeted at men)

Let’s be honest here. As much as we’d love to delude ourselves in thinking that women are our equals and all that cultural Marxist mumbo jumbo, we know fully well that (as Chris Rock once said) nothing dries up a woman’s vagina faster than her having to open up her purse. So you spend all this time, money and energy trying to date and essentially get laid on a regular basis. Before you start talking about companionship and having someone in your corner, etc. You probably have plenty of deep and meaningful relationships already. Even if she actually is comfortable being with paying for herself, all the money spent going out as opposed to being boring and staying home adds up.

9. You don’t understand finance

This is probably the biggest one out of all of them. All these terms like subsidized/unsubsidized loans, interest rates, compounding, stocks, bonds, mutual funds, etc. The language in and of itself can be quite daunting, and it seems like everyone is a guru (even me). I have found that the easiest give-away that someone doesn’t have a clue what they’re talking about regarding money is when they start talking about trying to save AND pay off debt at the same time.

A Quick Financial Crash Course: Once you’ve saved up an emergency fund ($1-2k), you need to stop trying to save and start focusing on grinding away at your debts (not including the mortgage). If you have a specific short term goal, then you pay the minimums on your debts and save for that goal, and once your goal is paid in full, go back to your debts. When you get to the point where all you have left is your house payments, 6-8 months’ worth of expenses should be saved up, which should be easy by then because you don’t have all those other thorns in your side.

The overall trend that I tend to see is that people want to live a certain lifestyle and maintain a certain standard of living. This being despite not nearly having the means to afford it. I think one of the common saying that I hear is that people want to live to the same standards as their parents. However they forget how long it took their parents to get to where they are now. Have a sense of perspective. Have a little humility. Unless you were born with a silver spoon in your mouth, you’re probably going to have to struggle. Don’t make things harder on yourself for longer than they have to be.