Ppl in high cost states - How do you save money?

[Sho'Nuff]

I love how simply ATOT makes life seem. Why didn't I think of this?!?!
This is more of a gauge to see if folks around my age truly are able to save money or not. If they are, yes of course make more money, but it's not THAT simple. Cut costs, yes, but what specifically? Move, sure.. but then income may go down, plus my g/f is only licensed to practice in this state, and she's locked in for another year. Furthermore, her mom will give us free kid care once that time comes. If we move any further away, I highly doubt she's going to leave the husband behind just to come take care of our chillunz.

Lots of people have chimed in so I guess I will join in as well.

First things first, Kaido's post(#109) is both truth and a plan. Saving is something you have to actively seek to do. People are conditioned to try and make their lives easier or more fun. Spending money generally scratches that itch. Saving money doesn't. Which is precisely why saving is hard. Doing it automatically (as Kaido suggests) makes it easier, but it is never *easy*.

You mentioned you lived in a 2 bedroom but its just the two of you and no kids. You might want to consider downsizing into a 1BR that is cheaper but still not in a craphole. Use the extra money to attack any debts you have. Attack the car loan first (it does nothing for you), then attack student loans (the interest is tax deductible so it is less of a priority). Since you are young, I would even consider cutting out any 401k/retirement contributions that are not needed to obtain an employer match. E.g., if your employer will give you a 3% match if you put 5% of your income in, do that but not any more until you kill your debts.

As for other ways to save money consider the following:
- Move to cheaper cell plan (i.e., no-smart phone)
- Cut cable - your SO can live without it (she really can)
- Join or create a carpool to save on gas money
- Use credit cards to your advantage (assuming you are disciplined enough to stay on a budget and pay off the balance each money, using a card that provides 1-2% cash back is like getting a discount on everything)
- Always eat in - I know you said you only go out 2x a month but dinners for two are about $50 a pop and you could use the $100/month elsewhere - there are a lot of free things to do with your GF (museums, parks, hiking, urban exploration, having sex (avoid kids or else that becomes really expensive LOL) etc.
- Save your change - it is amazing how much money adds up if you keep track of your coins. My wife and I still throw all of our spare change in a huge jar we keep in our bedroom every night before we go to bed. Every 4-6 months there seems to be $300-400 dollars in that jar. All from a stupid habit I learned from my parents (particularly my father - aka - the cheapest man to have ever existed on this planet).

Another thing - ESTABLISH GOALS - What is it exactly that you want to achieve? Early retirement? Nice vacation? House? Kids? Etc. How much do you think it will cost? Once you have goals established, set a plan for achieving them. A coach of mine once told me that "a goal without a plan is just a wish." That is as true for athletic achievement as it is for monetary achievement. It is good to plan using a conservative estimate of raises you expect to receive, but don't ever plan on not receiving a raise. If you find yourself in a job where you aren't receiving a raise that is at least equal to the annual rate of inflation - start looking for a new job because you are being given a loss.

Finally - start investing, even if you can only spare a small amount. Compound returns are a beautiful thing. I started investing at 19 and for the first five years I could only save $2500 a year (~$210/month). I earned about 6.5% per year on those investments, so after five years I had about 15,000. If I invested nothing further for for the next 15 years and achieved the same return, that $15,000 would have turned into $40,000. If I invested $210/month over that entire 20 year period and earned the same 6.5%, I would have just over $100,000

Moral of the story - even small investments with reasonable rates of return can turn into big sums of money. (Note - before someone chimes in - avoid investment costs like the plague - they eat up your returns).

Good luck. FWIW it IS possible to get ahead these days. Work hard, be honest, and don't be afraid to change in order to tip the scales in your favor.

 

[Sho'Nuff]

Yes, I was being kind of a dick to make a point... but the point is still valid and really IS that simple.......
Have you asked for a raise? Have you asked what you have to do to reach your income goal? Companies rarely just give large raises out, as it makes business sense to pay what they're happy with. If you don't say anything, then they assume you're happy with what you get and any more would just be an extra cost for them. Once you bring up that you have a specific income goal and you're very serious about meeting it, you might be surprised how much they're willing to work with you. People who just ask for more money don't have as much success as those who come in with "I need to be making $XXX,XXX by July for my family to remain happy here, what do I need to do to get there?"

This is good advice. Don't be afraid to ask for a raise, but make sure its warranted and be ready to justify why you are worth it. If you are a mail clerk and there is no basis for you to be asking for more money, asking for a raise can be equivalent to asking to be shown the door.

To give a personal example, a few years ago I approached my then boss at my firm about a raise. I explained to him that I thought that my billable rate was too low given my experience level. I then suggested that the partners in the firm increase my billable rate by X, and give me a raise equivalent to 0.66 of X. They gave me the raise. Why? Because my experience level vs. billable rate argument was correct, and I explained how we both could make more money by taking the action I was suggesting. At the time, I was also the most profitable associate in the firm for the prior three years, despite being at a much lower billing rate than other attorneys. Anyway, the point is that if I hadn't broached the subject I would probably have remained underpaid for my experience level for the next several years. Don't be afraid to ask for a raise, provided there is a good basis for you asking for it.

 

[Sho'Nuff]

I have a mint.com account but I feel like just skimming the credit card bill is enough. I mark out utilities, gas stations, eating out (even McD's), and groceries (eating in). Mortgage is not on the CC obviously. Everything else is pretty much extra that we can cut if needed. For some odd reason, this Amazon.com entry seems to be repeated a lot.

Mint is pretty terrible as a tracking tool IMO. I've been on it since its inception, and it always says that my monthly income is negative. Yet, my bank balances are always around the same amounts and my investments keep on growing and growing.

 

[MrSquished]

NJ? a lot of people have money. I'm a real estate agent in Jersey City and all my clients have high budgets. And a lot of folks are very active in the Jersey City real estate market as investors. We are talking about investing 500K plus in a second home purely as an income generator. Whether it's by luck, heritage, or pure hard work or a combination of the three, there are a lot of people out there with quite a bit of money to splurge on real estate. I'm looking for a small 2 bedroom condo in a nice but not as trendy neighborhood for under 400K.

I can only hope to profit from them in ever increasing numbers. And then be able to afford to live among them. Because please god, don't take me to some totally suburban and rural state. That would suck. That's like emotional suicide.

 

[jlee]

Mint is pretty terrible as a tracking tool IMO. I've been on it since its inception, and it always says that my monthly income is negative. Yet, my bank balances are always around the same amounts and my investments keep on growing and growing.

A lot of people like You Need a Budget - they have a free trial, too.

 

[woodman1999]

I am in river edge now, so as the crow flies I am not far from the city. Sadly, the buses don't fly like the crow. We have to go through the "express" bus lane, which is anything but express. Takes me 20 minutes to get to that lane and 40 to go the last 3 miles into the city.

 

[RockinZ28]

Mint is pretty terrible as a tracking tool IMO. I've been on it since its inception, and it always says that my monthly income is negative. Yet, my bank balances are always around the same amounts and my investments keep on growing and growing.

For income/expenses I believe it only tracks what goes in/out of bank accounts. That includes moving money out of bank accounts into investment accounts, which is an "expense". If you moved money from investments into bank accounts, it would be income.

A better picture for you may be net worth over time, since that tracks everything combined.

Since my only investments currently are retirement accounts, I just choose "hide from budget & trends" for all transfers into retirement. This way it doesn't show as an expense.

Also don't like that it counts my HSA accounts as cash.

 

[QueBert]

So Cal here, my method is a weekly poker game. The dudes I play against are horrible players, and on top of that they always get drunk. While you can't win every game, at the end of the year I'll always be way ahead. I put all my poker winnings into savings.