Millennials face a nasty set of obstacles on their path to financial security. From student loans and stalled wage growth to nosebleed housing costs and care for aging parents, it’s a tough time to be navigating the early years of adulthood.
An anonymous youngster with the troubling “ShortenedLife” nametag knows this all too well, so he made the very millennial decision to ask Reddit’s “Personal Finance” discussion group for tips on how to run a budget that leaves him broke at the end of each month despite his $61,000 salary.
One initial response: Cry me a river. But there’s more to the story.
“I’m currently 24, graduated with a BFA about 2 years ago and now I am currently in a toxic salary paying job and feel seriously stuck and moderately depressed about my life,” he wrote in a post that struck a chord in the community. “By stuck, I mean I feel like my financial situation is significantly preventing me from taking risks, or switching careers, or pursuing my career in a different state.”
ShortenedLife says his after-tax income comes to about $3,550 a month. That’s well above the average income for 24-year-olds, and to his credit, he does manage to contribute 6% to his 401(k), but at the end of the month, he says he’s in the red.
Here’s how he spends every penny that comes in:
Bill Cost Mortgage $1,358 HOA $170 Water $33 Electric/heat $130 Internet $65 Cellphone $70 Car loan $274 Car insurance $190 Car gas $70 Counseling $250 Student loan $400 Parent loan $500 Groceries $250
As you can see, bogged down by a suffocating student loan of $215,000 along with other fixed costs, he ends up paying out $3,760, putting him firmly in the red. He says he picks up side gigs as a 3-D artist to cover his costs.
“I guess I’m frustrated because I feel like I am always working, day and night and at the end of the month I have absolutely no money left,” he said.
Where’s the fat to trim?
Popular suggestions range from getting a roommate to cutting the monthly car/insurance payment. Others say there are cheaper internet plans and, since ShortenedLife lives in the Midwest, housing should much more affordable.
One even brought up the idea of taking a break from the counselor, but ShortenedLife was quick to explain how essential that’s become for him.
“About 6 months ago, I had a breakdown. I‘d been working 16-hour days for a solid month no break,” he said. “Since it was salary I wasn’t getting anything in return... financially it’s been the same situation. I felt used and unmotivated to continue with my life. I took steps to get a counselor hoping that will help.”
Aside from the practical advice, there were many others who offered up perspective of having lived through the tricky, post-college years.
“You’re 24. It will get better. You’re job just sucks right now but that’s the story when you are that young. Every employer wants blood from you because ‘you are young you can take it,’” writes one reader. “You will 100% be ok. The way your life is set up right now, your 30s are going to be a blast!”
Share any tips for our troubled millennial in the comments.
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