MD @ Studenomics

She’s a few years older than me but pretty much describes a few girls I know. I’m just wondering, what is her level of debt?

Rachel

Maybe start by picking one actionable thing you can do to save. Could you possibly change your membership from the gym you don’t like to the one you do? Or drop the subscription all together so you’re not paying drop in fees on top of the monthly studio fee?

You can do this! Good luck!

Grant

She should try the freeze-your-credit-cards-in-a-block-of-ice strategy to slow down spending money she doesn’t have.

Also, get Ramit’s book and pay attention to the budgeting section. It’s very simple and realistic.

Rosa

Sigh. This reminds me of me… except I’m basically have been mooching off my parents. Starting August, though, I’ll have a “real” income (though really really low) so for the past few months, I’ve been very slowly working towards reining in my crazy spending habits.

Shopping girl, I just wanted to offer a few notes (in the off chance you take the time to read the comments):
1. I know the $55 on groceries seems like a huge amount, but honestly, I don’t think this is where you should be concerned. No, groceries aren’t necessary, but they are still food and thus somewhat useful.
2. 69.29 for a sweater? Okay, even on sale, that’s a big much. You can usually get a really nice sweater for $40 (even not on sale) so if you NEED to shop, you might want to start going to lower price range stores. Yes, the sweaters there might not be as nice, but this way you get to get cute new stuff without breaking the bank. Same with the underwear… even the lace stuff at VS is maybe maximum 3 for 18 or something.
3. I don’t think there’s anything wrong with doing things you love like the drop in yoga class and magazine subscription. Though if you do like to alternate between the two studios, I’d buy punchcards at both instead of unlimited (this is of course dependent on how often you go).

I think overall, just based on me being in a somewhat similar situation, a couple things would be really helpful for you… Sit down and write down your priorities in terms of spending. At the top should be all the necessary things–ie rent, bills, food, etc. If you love buying stuff, put that on your list too–but write yourself a limit to how much you can afford to spend per month. If you crave quantity, go for cheaper stuff (and thus end up with a bunch of items for under your limit). If you crave quality, stick to buying 1-2 really really nice items monthly, especially items that you can wear all the time.

As you mentioned, you bought most of your stuff with credit cards–with no funds to back it up. Obviously you realize this is not ideal, but I don’t think you’re directly thinking about the fact that the “practically free” sweater that you got on sale will balloon in price if you can’t pay your credit card in full every month. Good luck with your saving, fellow shopping lover!

AD

Like Caroline (#7), this isn’t that much different than how I was right after college. I would run up my card doing the same sorts of things Emotional Spender does, but then I’d pay the card off, only to run it back up again. No savings, just a cycle of debt and repayment for five years.

Then, I got married, and my husband and I got serious about paying off everything, including our cars. We did it in less than a year, but we were highly motivated. Now we have an EF fund and we’re saving for the house we’re building and a vacation. I don’t like my job, but while I’m working on my escape plan, I know we can pay our bills on one salary, so I don’t feel imprisoned. It’s liberating to have choices and some security.

My advice would be to write down everything you owe. This was eye-opening for me. I was scared to do it for months, but once I did, the motivation kicked in. Next, buy a book like Ramit’s or whichever method you relate to, and follow their plan.

Also, I’ve paid $20 for a pair of underwear, and I’ll do it again. Who knows, maybe I’m a closet French girl. BUT, you won’t feel guilty about indulging yourself if you take the time to get your finances on track and you budget for those splurges.

JT

Wow, well at 25 she’s still young enough to learn. I would really start with the envelope system – she’s obviously not so good at tracking exactly what she’s spending her money on, and just throwing everything on the plastic. So, ditch the plastic, and just put cash into envelopes for rent, food, entertainment, gas, etc. – and when that money is gone no more spending for the month.

Tracy D

Sadly, this reminds me of my spending habits when I was first out of college. Hopefully she will decide to stop spending the money she doesn’t have and live within her means.

First of all, she should only buy necessities. Um, $100 for 5 pairs of underwear? I’m guessing they were Hanky Panky thongs? Don’t get me wrong, they’re the best panties out there, but not if you’re going to feel guilty wearing them or end up paying 3 times their actual price due to credit card interest/late payments. Gap makes a halfway decent copy for about $3-5/pair and I’m sure other companies do as well.

I used to think that buying a sweater on sale for $60 if it was marked down from like $300 was a good deal too. It’s only a good deal if you can afford it. And by “afford it” I don’t mean “room on the credit card to cover it”.

Food is a necessity and it’s cheaper and healthier to eat at home then to eat out. Spending on food is fine, as long as she’s not buying things that will just sit in the fridge and get moldy. Meal planning is important in order to save on groceries.

She probably has a few items gathering dust in her closet that she might be able to sell on eBay or at a local consignment store. She should do this to recoup some $ and begin paying off the debt or start an emergency fund (for rent and monthly expenses should she lose her job).

Finally, I recommend shopping at thrift stores when she needs to spice up her wardrobe. It’s cheap, and fun – at times, it’s a bit (ok, a lot) like looking for a needle in a haystack, but when you do find something worth wearing you’ll feel like you really did get a good deal when you check out and that cute sweater/jacket/pants/skirt/whatever rings up for $4.

I like to online shop on Amazon – I just continue to put things in my cart but don’t buy them. I might watch them for a few weeks (sometimes the price goes down substantially!) and then buy if the price is low enough and if it is something I can afford, but I always have a lot of “saved for later” items that I evaluate if I need or not and at what price I think they’re good buys.

Ryan

I see a lot of recommendations so far for the envelope system and various other methods… all good suggestions. Though I think the best suggestion is to cut up those credit cards. That way you absolutely cannot spend money that you don’t have.

The envelope system doesn’t work if you don’t have cash to begin with.

xmasy

How come I never meet Americans who are willing to spend on others?? But always read about them here!!

AD

@Tracy D–Yup, Hanky Panky are the ones I shell out the big bucks for! So funny you said that. BUT, I can do that without guilt because we’re saving almost my entire salary at this point. It feels better to buy without guilt.

Trendy Indy

I was once that girl..but it didn’t take me that long to realise that I was heading the wrong direction. The fact that she signed up to be featured in Money Dairies itself shows that she wants to ckean up her act. All she needs is a little bit of conviction and ensure you surround yourself with some financially smart/sound people and don’t feel embarassed to seek help/support

Tracy D

@AD – It sounds like you and I have a lot in common. My husband and I made paying off our debt together our main priority when we moved in together 3 years ago. We had a total of $40k in debt and it took us 3 years of diligently paying it off. We made the final payment last week!

Now we’re putting our money towards building our emergency fund and vacation savings. It feels awesome to be credit card debt free (we still have a car payment and student loans, but the balances on those are small).

Good job on paying off your debt in a year! It’s tough, but so worth it!

Someday soon, I’ll be able to buy myself more Hanky Panky’s worry free as well!

Kevin M

It’s sad that she’s disappointed at spending $55 on groceries, but doesn’t flinch when she spends almost $200 on a sweater and 5 pairs of underwear. And $30 on postage?

Since I criticized, I’ll offer a piece of advice. When you get the temptation to spend on something tangible – clothes, stamps?, etc. – make yourself wait an extra day. Go home, sleep on it and before going back to the store, check all your credit card statements and ask yourself if you really NEED it.

Courtney

I was in her shoes for a couple months as well. Luckily I snapped out of it before I went into debt, just depleted most of my savings. Reading this website as well as Young, Broke and Fabulous by Orman would be my first advice to her. Cutting out the shopping isn’t easy.. I love going to Target or the mall when I am bored, but exercising and taking up yoga has definitely given me more to do in my spare time. Also, continue the money diary: write down every single expense and then add them up at the end of the month. Seeing exactly how much I was spending on clothes each month was the real wake up call.

Rebecca

Oh, I can relate! I remember back in the day in high school when shopping was the activity my mother and I did on the weekends. I think it was kind of a good thing since I became so sick of it by the time I was older.

AD

@Tracy D–Sounds like you guys have accomplished a lot! Also, a tip on Hanky Pankys–if you have a Last Call Neiman Marcus, sometimes you can luck into them at half off. Sometimes they also show up on Bluefly.com.

Ha ha. I love how I’m commenting on a Money Diary about how to save money on overpriced thong underwear.

CentsInTheCity

There’s definitely some things that can be done to immediately improve this girl’s situation.

Right off the bat, she needs to find a method of tracking her spending. I think she really needs to see where her money is going. Either sign up for a free service link Mint.com, keeping receipts, or better yet keeping a spreadsheet.

Many credit card companies will let you change your due date. I would suggest moving them all to the same date and keeping the list of cards. Once a month she can set a reminder on her phone or calendar to sit down and pay bills.

Finally, there’s no point to paying for a membership and not using it! She should either utilize the pass to her local yoga studio, or cancel her membership. If she cancels, she can try to negotiate a packaged deal at the drop in location. It doesn’t hurt to ask!

$55 for all you can carry sounds like a lot of food! I live in NYC and have to carry all of my groceries. My guess she either buys a lot of meat or a lot of prepackaged goodies. I try to watch my circulars for cheaper meat, or go to Trader Joe’s because meat can be $$$ here. I’ve found making a list before going to the supermarket can curb impulse spending on expensive snacks.

I think it would be unrealistic for her to completely cut out on shopping, but I think there’s a much more efficient means to doing so. I’m sure through some online research Hanky Pankys can be obtained at a much cheaper price. Don’t forget to do an online search for coupons (www.retailmenot.com is a great one) once you find the cheapest website. Also if you utilize discount stores like TJ Maxx, Marshall’s, Loehmanns, Annie Sez, etc you can find much better deals on clothing and not feel guilty. I’ve bought panties that were extremely expensive for under $5 and other designer clothes at 70%+ off. These stores often have a membership program and will send you coupons to save even more. Don’t shop shopping…just shop smarter.

Lastly, wasting money on buying everyone coffee and stamps that will go unused is just nonsense. If you want to do something for your coworkers, bake some cookies or bring in fresh coffee to brew at work. It will cost a lot less than spending $13 at Starbucks and they will still appreciate the gesture.

Aurelia Masterson

Why has nobody suggested getting rid of these credit cards? It’s very materialistic. I guess she is not really learning the meaning behind her yoga classes–maybe she should go find a 3rd studio.

Kristy @ Master Your Card

I was this girl, so I understand. She clearly understands there’s a problem, so now she needs to sit down and take actionable steps to fix it. First and foremost, she’s got to figure out her goals, followed very closely by a budget. I’d say she needs to put those credit cards of hers into a shoe box and put them up where she can’t reach them without really thinking about it.

Just out of curiosity, where did the $125 come from to pay the credit card she missed one month? A few entries earlier she wasn’t even sure she had enough money in the bank to cover a $45 entry fee. That leads me to believe she robbed Peter to pay Paul…definitely not helping her situation.

moneyremix

The Week in Review: Money Issues #41 (side note: This ain’t yo papa’s blog!): http://tinyurl.com/o9zlaa #moneyremix

Ben

Ramit…..Seriously, stop writing your own Money Diaries and pretending it’s someone else. There is no personal information about this person, no background, and the daily posts are about 4 lines long. Seems to me they used to be much more informative, descriptive and REAL a few months back. I think you are busy so you just scratch together what you think a typical 25 year old girl would spend money on to incite !!! from your commentors. Anyone could have written this up in 5 minutes as a sloppy blog post. Sheesh, If your going to post for someone else, at least make it good.

The Arabic Student

Why do you always pick people who are flat broke and don’t know how to use money correctly? Or are those the only people who read this site?

Geena

Oh my gosh, I was like that girl once. I used to spend on credit without even thinking whether I had enough in the bank to pay for the purchases. What made me change my ways was when my Dad got hospitalized and suddenly, it made sense to have savings tucked away for personal emergencies.

I began to create a budget (even bought a $0.99 iPhone budget app called WalletWhiz from iTunes) and disciplined myself to stop spending. Whenever the urge to splurge hits, I think of what happened to my Dad, check my budget and remind myself of my savings goal.

Anyway, I’m far from achieving what I financially desire but I am pleased that I am getting there.

ellen

this makes me feel so much better about how i spend money (most of it spent on clothes that i get tired/rid of after a month or 2)

JimE

@Janna I agree completely that my comment comes completely from the standpoint that there is something in society that says this is acceptable in a general sense, but if you break it down to an individual case by case basis it “shouldn’t” hold any water. As for the implication that it is from a guys point of view, I can only say that my comment references only that there were commenters that agreed that they identified with this post. Yes I am male. Every personal financial advisor will not condone the conduct represented in this post as a long term plan without a fuller picture implying these are insignificant costs to a lifestyle. The fact that people emulate this type of lifestyle without the income to support it, and do it so readily, is what is fascinating to me in youth. There is a point where most people seem to evolve to a different financial priority, its just when and where that happens that seems to imply much about their overall financial situation. Yes I am implying there are people that go to college (or through life) pursuing a MRS degree, I don’t think it is wrong with the appropriate “mate” (it can go either way). Do I think the media or someone else is at fault, no. Is mob mentality dangerous, yes. This, to me, falls somewhere in between.

gime

In this post, I see not myself but my close friend. I love her to death but her spending is out of control. She has no savings so everything that happens is a financial crisis. For example her roommate moved out, and she didn’t have enough to pay the full rent.

Me on the other hand, I am 25 and financially responsible. I have about $20k in student loans, which is about half of what I took out, I also have an EF with a years worth of expenses, I max out my 401k and my IRA, blah blah blah. Compared to my friends, I drive a crappy car, live in a small apartment, my tv is small and not flat, etc.

I pay the price for my financial stability, every time I see my friends. I am considered insanely cheap. My friends make me feel guilty for living on a budget.

And that is my point, it is not easy to be responsible at this age. There is amazing social pressure to buy buy buy, and insane pressure to not save. I have had people tell me that I am “dumb” for maxing out my 401k.

I know most of you will say, “find new friends!” How many 25 year olds do you know who aren’t a money mess?

Sherene

I agree with an earlier comment in this thread about the immense peer pressure among the 20-something crowd to ‘live in the moment’ and not plan for the future. As one of the few in my age group to start putting away savings for grad school, retirement funds, mortgage downpayment, etc, I got flak among friends for being so sensible. This is not to say that I did not go out, drink, eat, shop or travel – one can do all of this and still save a lot if there’s good planning, deal-hunting, gratification deferment and budgeting involved. Wish more 20-something people realized this!

The Simple Dollar » The Simple Dollar Weekly Roundup: Book Club Edition

[...] The Money Diaries: The 20-something Emotional Spender I know a lot of people like this. I wish they read sites like The Simple Dollar. (@ i will teach you to be rich) [...]

Steve O

It makes a difference if the money is in Canadian dollars. That makes it a little better…

RT Wolf

I realize this is incredibly late, however I wanted to drop by and congratulate the author for commenting and getting her act together. Good work!

Two or three notes:
- I don’t see this is as a financial problem, I see it as a lifestyle/spiritual problem. It sounded a bit like the person in the diary (who I suppose you’re not anymore) has no sense of purpose, no sense of joy of their own in their life so must fill it with shopping. The “I deserve it” bit just set off red flags in my head. Get some goals that you feel really strongly about, get a job that really provides you stimulation and find people who challenge and inspire you to surround you. The existential vacuum, yada yada yada.

Check out http://www.stevepavlina.com sometime if you’re curious what a lifestyle on purpose would be like.

Other than that, good work!

Another perspective on the I Deserve It mantra:
http://teacherfinance.blogspot.com/2009/05/but-i-deserve-it.html
http://frugaldad.com/2008/04/14/language-of-the-perpetual-poor/

Keep it up and good luck in the future!

katie

Sounds like so many people I know–ever think about doing a post for college kids/high school seniors about saving/general money knowledge?? I feel like we (as in this age group) are uneducated when it comes to being a “real person” financially and may be making mistakes when it comes to investing (or lack there of). Just a thought.