“I only have about $4,000 in my 401k and no savings”: I make $90k but struggle with debt and savings. How can I improve my financial situation?

Hi Money Minder,

So, my take-home is $5,473.24 per month after all the boring deductions (bi-weekly $2,736.62).

Here’s how my money is disappearing:

Rent: $2,000 (covers everything from electricity to internet… all the essentials)

Car: $492

Groceries: $500-600 (I’m a hungry guy)

Dog: $100 (yeah, he eats better than I do)

Now, here’s where I went wrong with my spending:

Couch: $71 per month (thankfully, zero interest, but still $3,300.62 left to pay off)

Affirm: $63 a month… I’ve still got $513 hanging over me from using Affirm in the past (total facepalm moment)

Credit Card: $400-500 each month is what I’ve been tossing towards it, but I’ve still got $2,662.06 haunting me

Climb (that’s the personal loan I took for a boot camp): $397.49 every month and a whopping $6,684.10 still to go

By the way, I’m expecting a bonus of 4-6% in December, plus a 3-6% raise.

I know, I know… I’m not exactly winning at this whole money game for my age. It sucks that I only have around $4,000 in my 401k and zero savings.

Got any advice to help me start turning things around? I’m all ears and super grateful for any help.

Farewell

-Struggling Spender

Response from THE MONEY MINDER:

Hello There,

I can understand how overwhelmed you might feel looking at your financial situation, but remember, it’s never too late to make positive changes. It’s commendable that you’re seeking advice, and I’m here to offer some practical suggestions. Given your monthly take-home pay and current expenses, it seems like your biggest challenge is tackling your debts, especially the credit card balance and the personal loan. It might be beneficial to work on a plan to aggressively pay down these debts. Consider cutting back on non-essential expenses, like dining out or entertainment, to redirect more funds towards debt repayment. Also, take advantage of your upcoming bonus and raise to boost your debt payoff efforts even further. As for your 401k and lack of savings, once you’re in a better financial position, you can focus on building up both. Remember, small steps today can lead to significant progress in the long run. Stay focused, stay disciplined, and you will see improvements over time.

Farewell from THE MONEY MINDER.