It’s not you, it’s me. Well, not really “me” – it’s the world. All the Frugal Freddy stuff aside, the reason you are out of money by the end of every month is not because you bought too many lattes. It’s because you and the majority of us aren’t paid enough. Let's break it down and then let's talk about how a Wilson David CFP® can help you.
For most of us, our incomes stay the same each month. The salary we earn, however, is not the salary that actually appears in our paychecks. After federal income taxes, state income taxes, Social Security taxes, and Medicare taxes (the last two are called FICA taxes) come out, your pay is much lower. To some degree, you can adjust the amount of income taxes that are taken out each month, giving yourself a lower refund at tax return time, but the FICA taxes are set by the government.
So that’s what comes IN. Now for what goes out and out and out….You have expenses that you know you’ll have to pay every month – rent, utilities, car payment, student loan, etc. Those are called fixed expenses and, unless you move, negotiate a better deal, or pay off a loan, they aren’t going to change. Then you have those pesky “variable” expenses – the ones that change all the time (usually upwards, rarely down) and that seem to be the culprits for monthly budget busting: tuxedo rental for friend’s wedding + all the travel costs; CV joints on truck; a Disney+ subscription; replacement of phone your 2-year-old nephew threw in the toilet; cases of Gatorade when you got the flu, etcetera, etcetera. Stuff never stops happening, and it all costs money. And it usually costs money you don’t have.
This article is about you – a college grad or highly tech-trained worker who followed the rules, did the right education courses, and nailed a supposed “good-paying job.” So why isn’t it working out?
There are no easy solutions to this one, but we can help. The whole breezy “spend less than you make” doesn’t cut it when your third dear friend of the year wants you to be her bridesmaid or when your transmission goes out or when you break a bone that results in high medical bills. Cutting out lattes isn’t going to make up for big monthly deficits.
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Carly Rae Jensen
Are you a millennial tired of being characterized as an avocado-toast-eating snowflake? Be our blizzard! We're parents of, friends to, and advisors for many wonderful millennials. We get the deal, and we won't waste your time or money.