TL;DR – Young Adult, consistently in overdraft, debt to pay, need a fresh set of eyes to take control of the situation.
Hey there, I (24M) have been struggling living pay-to-pay for a few months now. I am a financial controller and have completed my accounting degree and my CPA pending practical experience requirements. I live alone and I’m a single parent. Over the past year, rising prices and some large purchases on credit (which have done wonders for my mental health despite being a need to recover from) have made it more difficult. I am wondering if you guys can help take a look at what I pay, and perhaps help assist in some areas I can reallocate money since I am really struggling to see what I can cut out or if I need a different strategy. Below is a summary of my income and expenses.
Income:
Take-home Salary: $1490 bi-weekly – this averages $3230 per month
Fixed Expenses:
Rent $685; Student Loan $320; Auto Insurance $170; Tenant Insurance $18; Phone Bill $53; Internet Bill $109; Gym $22; Medication $7; Security Camera Loan $14 (Can’t get out of this, was a mistake a couple years ago); Daycare Expenses $110 bi-weekly – this averages $238 per month. Total $1616 per month.
Basic Budget for Variable Expenses:
Lights $50; Gasoline $315; Groceries $400+. Total $700-$800 per month.
These are my monthly cash flows. In addition, I have a line-of-credit with a balance of $2900. Unfortunately, I expect the balance to increase this month with a requirement for winter tires and some other necessary auto work, and I expect it to increase once again in about 6 months for summer tires. My goal is to pay this off as soon as possible.
Lately, I have not been spending much outside the cash flow categories above, I have been making my meals instead of purchasing them, I cut out drinking, I cut out smoking, I cut out going out. I am already zapping myself of any enjoyment outside of that which I can find on my own, or very rarely actually going out and keeping the balance down. I feel my deficiency is on spending for gasoline and groceries with the price being so high, despite the budgets provided above being my target I do not meet them. Every pay period I end up in overdraft, so catching up on my last periods deficit is really the issue. I have been trying to resolve this issue for a few months now so I can get to a place where I can apply savings to my line of credit.
If somebody could give me a fresh perspective on my situation so I can take control of this, it would be greatly appreciated. Let me know what priorities you think I may need to shift and where my focus has to go, I am starting to think a secondary source of income will be necessary. Alternatively, let me know if this is posted in the wrong place and I’ll move it.