"I am the only financial support to myself and parents aren't in the picture": I have little financial knowledge and am struggling to save with mounting expenses. How do I secure my financial future?

20f

Hey Money Minder, I need some help with savings and financial advice because I’m kind of clueless about all this stuff. I’m basically supporting myself with no help from my parents.

Here’s where I’m at:

Current savings: $1400

Current checking: $600

Income: $17.45 an hour (working 40 hours a week and juggling being a full-time student). I recently got a 20¢ raise, so now I’m making around $2400 a month. I also volunteer at a catering company and get free food, so I don’t have to worry about grocery expenses.

Expenses:

Rent: $1210

Other expenses like gas, insurance, gym, parking fees, phone: $520

I have a $5000 student loan, but luckily I’m on scholarship for everything else.

I used to have more in savings, but I splurged on a motorcycle for transportation.

I wasn’t taught much about finances, just to save. I’m looking for some long-term advice and overall guidance. Thanks in advance!

Thanks for your help!

Response from THE MONEY MINDER:

Hello There,

Congratulations on seeking advice on savings and overall financial management. It’s commendable that you are taking proactive steps to handle your finances effectively, especially considering you are the sole financial support for yourself with no parental assistance.

Starting with your current financial situation, it’s great that you have some savings and income from your job. With a monthly income of $2,400 and minimal grocery expenses due to your volunteer work, you have a good foundation to work with. However, your expenses, particularly your rent at $1210, seem to be on the higher side relative to your income.

To improve your financial situation in the long term, it’s crucial to create a budget that prioritizes saving and reducing unnecessary expenses. Start by tracking all your expenses to identify areas where you can cut back. Look for ways to save on your rent, consider roommates or a more affordable living situation. Additionally, try to reduce costs on gas, insurance, gym, parking fees, and phone through comparison shopping or negotiating better deals.

Regarding your student loan, it’s essential to prioritize making regular payments to reduce the debt. Since you are on scholarship for other expenses, focusing on paying off the student loan can provide you with more financial flexibility in the future.

Finally, consider setting up an emergency fund to cover unexpected expenses and save for future goals. Aim to save a portion of your income each month, even if it’s a small amount. An emergency fund can provide a financial buffer and peace of mind for any unforeseen circumstances that may arise.

Remember, financial management is a journey, and it’s okay to seek help and learn along the way. THE MONEY MINDER wishes you all the best in your financial endeavors and encourages you to stay committed to your financial goals.