Never ending dept and inablity money story for many years

wodan

Hey there!
I found this forum over google so I hope that I'll get some help and advice to get out of this struggle which is bothering me from day to day, month to month and year to year.

Let me introduce myself to you shortly:
I am 29 years young and life in Germany (therefore sorry for my bad English. Never less I hope that you can understand me anyways). Since I can think I am struggling with financial problems and the inability to get along with my income.

My financial situation looks like following

Monthly income: 1,900.- € (net)
Fixed costs: 935.67 €
- Including insurances, child support, rent for my rental apartment, mobile phone contract, gym contract and so on
Retirement: 106.- €
Monthly savings: 190.-€ (10 % of income)
Left for spending for whole month: ~ 600.- €
- Spending includes groceries, gas and so on.

Depts
Credit Card: 700.- €
Loan of money: ~ 3,000.- € (taken just for consumption...)

Currently Saved
Instant access saving account: 1,350.- €
... sadly and disgraceful to say: that's all

I hope that I have provided all necessary financial information to you.

My problem is that I am not able to get along with my monthly income better with the money which is left for spending. I can't remember a day where I have not spend any cent. I spend every day some money. Most of the money gets away for stupid things. For example cigarettes, energy drinks, clothes which I literally wear only one time, books which I want to read but In the end I don't even open them, decoration or crap for my apartment. In summary I spend my money for crap.

I am always thinking "Ah that's just xx €. I can effort that." which sums up and results in that I left with 0 € in the middle of the month. And from month to month this bothers me and I always say "Next month I'll do it better than that I swear" but without effect. I keep my housekeeping book always updated but without any positive effect on that. Besides the fact that I see that I am an idiot because I spent so much money for cigarettes and energy drinks and other stupid stuff.

I am not good In renounce (do you know what I mean?). Something like "You are working every day so why should I renounce ? Buy it if you want to". Sometimes I leave the house only to buy something.. to go to the grocery store and spend some money. I don't know why I do that. I think it pops up some positive feelings when doing that. But in long term it ends up in a bad mood when I check my bank account in the middle of the month and realize that I have to overdraw my bank account (again).

So far it was always a never ending chain from dept --> dept free --> dept --> dept free. You get it? After I am out of dept I get inside again because I am not able to get along with my money. I'm some kind of feeling bad if I renounce something because Hey I am working in the IT, I am someone so I have to show that I don't have to renounce because I got it.

Further I would like to build an amount of money where I can say "Hey I have enough money saved so if something happens I can absorb that". For example the car breaks or something else.

That should be enough at first and I am also out of words to describe my situation. I hope that you can follow me.

In summary my questions are:
- Basically: How can I get along with my income?
- How can I learn to get along with my income?
- What do I have to change or how?
- Why I am I doing what I doing?
- Can I start from scratch with my finances?
-- Reset to 0 if you know what I mean

Looking forward to get some inspiring and helpful posts from you guys.
See you later and kind regards.

PS:
I am really upset when I sum up all the money which I have spent for retirement. If I think about how much money I could now have as "savings". Wow.. that would be great. But okay that's just dreaming. Let the past be the past and do it better now and in the future... (thats what I want to achive from month to month)

-taff

wodan wrote: »

In summary my questions are:
- Basically: How can I get along with my income?
- How can I learn to get along with my income?
- What do I have to change or how?
- Why I am I doing what I doing?
- Can I start from scratch with my finances?
-- Reset to 0 if you know what I mean

Post an SOA - which is a tool to see where your money goes, and what you're spending it on.

Basically, you need to learn to budget, there are different ways to do this, whether you keep spreadsheets, or a pen and paper, or use an app to do it.
In any case you choose, you need to be seeing where you are spending your money.

http://www.stoozing.com/calculator/soa.php

Ifyou don't want to fill this in, get yourself a pen and paper and writ down what you have spent money on in the last month, everything, including cups of coffee, magazines etc. You might be surprised at where it's all going.

EssexHebridean

Your English is superb - better than my German for sure!

Essentially you need to budget - and then stick to that budget. Include in that a sum of money for entertainment purposes - divide that sum by the number of weeks in the month and them withdraw that amount from the ATM at the start of the week - that is the amount you have to spend on "fun" things.

You don't make clear whether your existing fixed expenses include the payments to your credit card and loan? In any event for the time being I would stop using the credit card - I think you need to get to grips with coping within your income without access to credit for the moment.

You clearly know and understand where you are going wrong - you currently want a lifestyle more expensive than your income allows you to have. There are two ways of fixing this - one is to increase your income (better paid job, second job?) and the other is to decrease your expenditure and lower your expectations. The second of those options is by far the simplest!

sourcrates

Echo the above, you need to stop spending on carp, and live within your means.
Easy to say I know, harder to do, but it's not impossible.

Just takes a bit of discipline and self control.

You can get all the advice you want here, but you must be prepared to act on it.

enthusiasticsaver

You have admitted in your OP that you know where you are going wrong and it is discipline which is pulling you up. Budgeting - ie allowing a certain amount of money for each (groceries, entertainment, clothes, gifts etc) is the only way you can stay within your income. Failing that increasing your income by taking on a 2nd job or selling something. I am not sure of cost of living in Germany but in UK that money you have at your disposal should be sufficient for a single person but presumably you also have to make debt repayments. In the UK we would advise there is no point in having savings if you have debt as interest rates are so low over here on savings but again in Germany this may be different. Is it worth paying off your credit card from your savings so you just have the loan to think about?

Paying money into a pension or retirement savings will pay out in the end and is well worth it so do not resent it. Just adapt your spending habits and stop buying the rubbish and look for savings on groceries, being frugal with things instead of buying stuff you do not really need. I would suggest you keep a spending diary so you can see what you spend on real necessary things and what you spend on rubbish.

enthusiasticsaver

One good way to budget is to divide your disposable income by four and take out cash every week so you are not left with 0 in the middle of the month.

badmemory

It reads to me (good English by the way) like you need to ask yourself why you are overspending as you are. Are you spending to reward yourself or console yourself? Rewarding yourself for getting through another bad day at work when every day is a bad one or leaving your flat to buy rubbish because you are so bored? It seems to me it may help if you face "the why" first. Stopping smoking would be a really good idea too, although easier said than done I know.

EssexHebridean

enthusiasticsaver wrote: »

One good way to budget is to divide your disposable income by four and take out cash every week so you are not left with 0 in the middle of the month.

Yes, or better still as I suggested in my reply above, by the number of weeks in the month. Not all months have 4 weeks, remember!

juststuff123

Hi There!


Great English, I wish I could speak any second language as well as you!


The other posters are correct a Budget is really important. If you need to put money in the budget for crap then do it but stick to the amount you've decided on. And if you can't afford it you can't have it. You say you already keep track of everything you spend so coming up with a buget won't be too difficult.


I think you also need to change the way you think when you buy something. Right now you go into a coffee shop and order a coffee and a cake and say to yourself it's fine it's only 5€. But you do this every day. Try to think ok this is 5€ but it's 5 days a week, thats 25€ per week hmm still not that bad, in one year that's 1300€ and in 10 yrs that's 13000€! on Coffee and Cake, and now you're probably a few kilos heavier too! And try to remember the guilty feeling you know your going to get later to help you just say NO before you get to the checkout.


A good way to help you focus and keep this in your head is to have a goal. Maybe save a deposit for a house, buy a car (with cash). A fabulous holiday, save to go back to school, pay off you debts anything you really want. Then when you go into the shop for cigarettes you can ask yourself "What do I want more, these Cigarettes or a home that I own"


Maybe you could get a hobby or join a club as a way of reducing the time you have available to go out and spend money in the first place?


However you decide to move forward I wish you luck.

wodan

Hey guys, whats up!

Wow, I'm very impressed. Never thought of such a density of replies. First of all, let me thank you for your effort to help me getting out of this struggle. :T

Following I'll try to refer to all of your posts. Quoting every post would blow up this post so I'll try to summarise it.

I already have something like an SOA. It's an Excel sheets which contain and sums up each fixed cost I have over the month. Monthly rent for the flat, electricity, TV connection, car insurance and so on. Therefore I know which my I have available for the month for spending. My monthly fix costs also include the erasures payments for my credit card and the other retirements and also the savings of 10% of my earnings. So in sum I have ~ 600.- € for spending each month (buying food, going out, cigarettes, gas for the car and so on).

I already came up with the idea of a budget and also tried it but somehow my lack of discipline is the key point. Sure also I should lower my "standards" but you know.. you see all those people driving cool cars, buying and wearing expensive clothes. You begin to ask yourself "Why should I hold back". Most of the time I spent the money without thinking. I would call them "impulse spendings" without an existing requirement.

I am already keeping a spending journal since June and I am entering each spending really fussy... but this journal has no effect in any way. I am entering everything, analyse this and thinking "OMG again so much money for crap, cigarettes (especially them) and xxx" "I need to stop that. Now." but yea without any effect. That's what's bothering me. I know what's going wrong but I am to dump and not disciplined enough to change something. I guess I am not able or not good at saying "No" to myself.

Next month I'll get a bonus which is around my monthly wage. So in November I'll have a double wage. I thought about balancing my credit card and quit the credit card.

EssexHebridean

wodan wrote: »

I already came up with the idea of a budget and also tried it but somehow my lack of discipline is the key point. Sure also I should lower my "standards" but you know.. you see all those people driving cool cars, buying and wearing expensive clothes. You begin to ask yourself "Why should I hold back". Most of the time I spent the money without thinking. I would call them "impulse spendings" without an existing requirement.

OK - genuine question - are any or all of these people somehow better than you because they are driving "cool cars" or wearing expensive clothes? How do you know the clothes weren't from a charity shop (thrift store) and they are just wearing them really well? The Car - that might be costing them more than they can afford, and any day now will have to go back because they can't make the payments? IN a short time those people might go completely broke (Bankrupt we say over here - not sure of your equivalent) as a result. Are they so cool now?

Remember - you are not "things" or "stuff" - and you shouldn't define yourself by those things. We have NO idea how other people's lives are funded - some of them may be living off rich parents, with no idea how to make their way in the world. Others may be illegally claiming benefits - living from day to day with a great lifestyle but no idea if they are going to get caught, and prosecuted for it. Some may be borrowing, borrowing, and then borrowing more - all with no clear idea of how they will ever pay it back. Some though, they'll be living within their means, saving up for the things they want - and THEY are the really contented ones.

Next month I'll get a bonus which is around my monthly wage. So in November I'll have a double wage. I thought about balancing my credit card and quit the credit card.

Pay it off your debt. All of it. As soon as you get it.

As was said previously - if you want a better lifestyle than your income allows, then your option is simply to increase your income. There is no short cut. The ONLY way that those of us on here have settled debts, in some cases paid off the mortgage early, and are now building savings is by matching our lifestyle choices to our income.