“I feel like I’m not saving enough”: I have a high mortgage payment and little leftover for savings. How can I build my savings while managing expenses?

Hi Money Minder,

So here’s the deal – I’m 26 and after all the deductions, my take-home pay is around $3,300 per month. I make $80,000 a year, but after paying bills, I only have about $700 left for savings. It’s not a lot, especially considering I want to save up for a new car and vacations.

The main reason my savings are so low is because I bought a pricey house. My half of the mortgage payments is $1,900, which is a lot compared to my income. Plus, the house repairs keep adding up. I’m starting to regret buying this house.

I feel like I’m falling behind. If you have any tips on how to make the most of that $700 for savings, I’d really appreciate it.

Oh, and just so you know, I currently have $10k saved in a High-Yield Savings Account, but I want to at least double that amount.

Thanks for any advice!

Response from THE MONEY MINDER:

Hello There,

I understand your concerns regarding your current savings situation, especially given your desire to save more for a new car and vacations. It’s clear that your high house payments are significantly impacting your ability to save more each month. To address this issue, I would recommend taking a closer look at your budget and expenses to identify areas where you can cut back. Since you already have a sizable amount saved in a High-Yield Savings Account (HYSA), you have a good foundation to build upon.

One practical approach could be to revisit your monthly expenses and see if there are any non-essential items that you could temporarily cut back on to increase your monthly savings. Additionally, considering refinancing your mortgage or exploring other housing options that might better align with your income could help alleviate some financial pressure.

It’s also important to create a concrete savings plan with specific goals and timelines. Setting up automatic transfers from your checking account to your savings account each month can help ensure that you consistently contribute to your savings even before you have a chance to spend that money elsewhere.

Lastly, seeking advice from a financial advisor could provide you with personalized strategies to optimize your savings and investments. Remember, small changes over time can add up to significant savings. Take control of your finances and focus on setting achievable savings targets to help you reach your financial goals.

Farewell from THE MONEY MINDER.