ASSISTING A READER IN RECLAIMING FINANCIAL STABILITY

Carrie recently reached out to me, sharing her struggles in achieving financial freedom. She expressed frustration over her inability to save money, despite her efforts. She’s a 21-year-old college student, engaged, a business owner, and a pet owner. Her savings account is empty, which understandably makes her anxious about not having a financial cushion for emergencies.

Many people can relate to Carrie’s experience of making money only to see it disappear quickly, often due to unforeseen expenses. I reassured Carrie that she has a significant advantage: time. At just 21, she has the opportunity to turn her finances around. Plus, she’s already running a business while attending college, demonstrating her determination and willingness to work hard.

To start, I advised Carrie on the importance of budgeting. I’m not the biggest fan of budgets because they can be demanding and require meticulous tracking of every expense. However, for Carrie, a budget is essential to understand where her money is going. When I asked her about her usual expenses, she provided a list that included groceries, loan payments, insurance, and clothes. Carrie mentioned that her business income fluctuates between $1,300 and $1,800 monthly. They have been cutting down on bills, which is great. Their current expenses are:

– Rent for a two-bedroom apartment: $550
– Phone and internet: $65 per month
– Electricity: $125 to $180 per month
– Small household items and puppy food

While these are the most obvious bills, Carrie didn’t mention other expenses like groceries, car-related costs, or other necessities. I suggested that she track all her expenses for a week, so we can identify any areas where she can cut back and ensure her expenses fit within her minimum income of $1,300.

If the budget is tight and there isn’t enough money, we’ll need to consider ways to increase her income. As a freelancer, Carrie needs to know her survival budget and stick to it until her financial situation improves.

After a week, Carrie excitedly reported that she and her boyfriend had embarked on a spending freeze and managed to save $98.06. Here’s a breakdown of their spending:

– Net income for the week: $347.96
– Laundry: $10.00
– Beer: $13.00
– Dollar General: $15.66
– Sofa rental: $90.00 (adding another monthly bill of $124)
– Walmart: $94.00 (including paint, brushes, transportation, food, paper towels, and McDonald’s)
– Dollar General (again): $10.19 (snacks and pop)
– Miscellaneous: $3.89 (chips and allergy medicine)

Their total spending was $232.85, with some additional expenses likely from ATM fees.

Carrie could cut some expenses like beer and fast food. They might also consider buying a used sofa from Craigslist instead of renting one unless they’re tied to a rental contract. However, it’s important they make these changes gradually to avoid getting overwhelmed and giving up.

Lastly, I asked my readers for a simple, painless tip for Carrie. One easy suggestion is to avoid ATM fees by changing to a bank that doesn’t charge them or only withdrawing from fee-free ATMs.

Thank you for your input and support!