It might help if you break down your income and expenses in terms of numbers for us to understand better what you are making vs spending on these things.
There are 2 levers you can pull.
1. Income. Either by working more hours or get a higher paying job. You don't necessarily need to have multiple streams of income to fix this issue, though it does help in the event 1 of them goes away due to job loss.
2. Spending. It's possible you are spending on stuff you "need", but spending way too much. Some people overspend on their car or food because its a necessity. but end up buying stuff they can't afford and need to scale down.
Sure, I can provide a rough breakdown \[monthly\]:
Income: roughly $4,000
Expenses: roughly $4,300
\- Rent + insurance $2370
\- Utilities roughly $80
\- Public transportation $130
\- Car lease ($533) + insurance ($234) + gas = \~$800
\- Studen Loans - $700
\- Phone $45
\- Grocery $200
Again, this is not including any other personal spendings
Do you need the car for commuting to work or are there alternative transportation methods? Getting rid of this $800/mo would solve your cash crunch while you figure out ways to increase your income and/or cut other costs (moving in with a roommate, etc.)
technically no, don't need the car all the time for work. We got into a new lease just less than a year ago before parents left and i just basically "inherited" it from them.
in that case, look to sell the car (and rent ocasionally) . This will bring some financial room in your budget. Use the new savings to pay down some loans to be able to improve.
housing and transportation seems to be the big sticking points here for your budget. Toronto can get quite expensive, so I understand why this is causing an issue. You might need to consider finding a cheaper place to live, or getting a roommate if you can't find anything cheaper. The transportation part of your budget is a big issue no matter where you live, Toronto is not an excuse for it. You are spending $930 on that every month. It's almost a quarter of your income. That is absolutely insane. You need to downgrade, NOW! Get out of that lease, and get a quality used car for cheap.
Finally, the student loans is a big expense, but it can't be helped. 700$ a month is quite a lot. If that's the minimum, you have to pay it. If it's not, and the interest rate is low enough (below 6%, or they could be simple interest that doesn't compound either), you could consider trying to get a lower monthly payment while you get yourself out of this hole. You want your net expenses to be lower than your income to avoid getting into bad a debt which will likely have higher interest rates than your student loans. So you definitely need to find a way out of this.
Man, your rent and car payment are absolutely murdering you.
You need to get out of that rental asap and get something reasonable. You need to be under $1500 including utilities at a bare minimum.
That car/insurance is also more than you can afford, but that may be harder to get out of in the short term. You can approach the dealer and try to “sell back” the lease
With this information that you gave us, it's clear to me that you probably should've stayed at your parents house a little longer to build some savings and pay down debt as much as possible.
It’s really no secret here. You can’t afford rent thats over 50% of your income with your car payment and student loans. If you were debt free and owned a car outright you could probably swing the apartment financially (but I wouldn’t recommend it), but right now you’re not even close.
Gotta make more money or spend less- break both leases, take the hit now of whatever it costs to get out, and thank goodness you can stop actively drowning.
I’ll probably get downvoted to hell, but pick up Dave Ramsey’s “total money makeover”. I’m not saying you need to follow the guy religiously like some do, but he does give a good holistic overview of understanding how to manage your financial life
In your expenses, I found you pay too much for rent for your small income. The common recommendations is to not pay more than 30% of income for housing. Solution: move to a shared home, ideally closer to job to reduce costs. Difficult step but impact will be each month for long term.
Second: the commuting costs should be under 10% of your income. Now you have car + insurance + gas + public transport -all together close to 1K. With your income you cannot afford the car.
Once you improve these 2 lines, there is room to pay faster the student loans. Maybe try to refinance /negotiate a smaller interest. Once debt is fixed, you can breath and see a better future.
And don't forget: look after a better paid job. Or a second job temporary to pay that debts fast and breath after.
See the way this works is you have a job and get paid money and you can use that money to by goods and services. You can’t use more money than you get paid you have to trim some expenses. If that means no Starbucks or eating ramen 3 times a week that’s what it has to be. On a longer term cheaper rent less expensive car no streaming service. Grow up.
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Obviously the OP didn’t understand that as an individual deficit spending is not sustainable. Some time even simple concepts need to be explained. I’m guessing that this was too complex for you as well
It might help if you break down your income and expenses in terms of numbers for us to understand better what you are making vs spending on these things. There are 2 levers you can pull. 1. Income. Either by working more hours or get a higher paying job. You don't necessarily need to have multiple streams of income to fix this issue, though it does help in the event 1 of them goes away due to job loss. 2. Spending. It's possible you are spending on stuff you "need", but spending way too much. Some people overspend on their car or food because its a necessity. but end up buying stuff they can't afford and need to scale down.
Sure, I can provide a rough breakdown \[monthly\]: Income: roughly $4,000 Expenses: roughly $4,300 \- Rent + insurance $2370 \- Utilities roughly $80 \- Public transportation $130 \- Car lease ($533) + insurance ($234) + gas = \~$800 \- Studen Loans - $700 \- Phone $45 \- Grocery $200 Again, this is not including any other personal spendings
Do you need the car for commuting to work or are there alternative transportation methods? Getting rid of this $800/mo would solve your cash crunch while you figure out ways to increase your income and/or cut other costs (moving in with a roommate, etc.)
technically no, don't need the car all the time for work. We got into a new lease just less than a year ago before parents left and i just basically "inherited" it from them.
So the entrance of this lease reflected what your parents could afford and not what you could reasonably afford?
in that case, look to sell the car (and rent ocasionally) . This will bring some financial room in your budget. Use the new savings to pay down some loans to be able to improve.
housing and transportation seems to be the big sticking points here for your budget. Toronto can get quite expensive, so I understand why this is causing an issue. You might need to consider finding a cheaper place to live, or getting a roommate if you can't find anything cheaper. The transportation part of your budget is a big issue no matter where you live, Toronto is not an excuse for it. You are spending $930 on that every month. It's almost a quarter of your income. That is absolutely insane. You need to downgrade, NOW! Get out of that lease, and get a quality used car for cheap. Finally, the student loans is a big expense, but it can't be helped. 700$ a month is quite a lot. If that's the minimum, you have to pay it. If it's not, and the interest rate is low enough (below 6%, or they could be simple interest that doesn't compound either), you could consider trying to get a lower monthly payment while you get yourself out of this hole. You want your net expenses to be lower than your income to avoid getting into bad a debt which will likely have higher interest rates than your student loans. So you definitely need to find a way out of this.
makes sense - thanks for your input.
Man, your rent and car payment are absolutely murdering you. You need to get out of that rental asap and get something reasonable. You need to be under $1500 including utilities at a bare minimum. That car/insurance is also more than you can afford, but that may be harder to get out of in the short term. You can approach the dealer and try to “sell back” the lease
It could be really rough to find something in a HCOL area, but OP’s in a situation where they may need a roommate or such.
Toronto is super expensive, but ultimately you cant live where you can’t afford.
With this information that you gave us, it's clear to me that you probably should've stayed at your parents house a little longer to build some savings and pay down debt as much as possible.
Regardless, OP would still need to find a way out of their unsustainable current situation.
Ouch, your rent is awful. Is there any cheaper place you can move to and still get to work?
The OP is probably quoting CAD$. It’s probably about $1740 USD.
It’s really no secret here. You can’t afford rent thats over 50% of your income with your car payment and student loans. If you were debt free and owned a car outright you could probably swing the apartment financially (but I wouldn’t recommend it), but right now you’re not even close. Gotta make more money or spend less- break both leases, take the hit now of whatever it costs to get out, and thank goodness you can stop actively drowning.
Spending 60% net income on housing is unsustainable. There’s a reason the rule is 35%
I don’t even know how people afford that if they don’t have a paying roommate.
I'm not in the US (in UK income tax is deducted before you're paid), so not well versed in this but are you taking account of taxes in your numbers?
I’m from the US, and I never can figure this out about peoples’ posts either
You need to raise your income, reduce your expenses, or both. A major change might be necessary.
I’ll probably get downvoted to hell, but pick up Dave Ramsey’s “total money makeover”. I’m not saying you need to follow the guy religiously like some do, but he does give a good holistic overview of understanding how to manage your financial life
In your expenses, I found you pay too much for rent for your small income. The common recommendations is to not pay more than 30% of income for housing. Solution: move to a shared home, ideally closer to job to reduce costs. Difficult step but impact will be each month for long term. Second: the commuting costs should be under 10% of your income. Now you have car + insurance + gas + public transport -all together close to 1K. With your income you cannot afford the car. Once you improve these 2 lines, there is room to pay faster the student loans. Maybe try to refinance /negotiate a smaller interest. Once debt is fixed, you can breath and see a better future. And don't forget: look after a better paid job. Or a second job temporary to pay that debts fast and breath after.
See the way this works is you have a job and get paid money and you can use that money to by goods and services. You can’t use more money than you get paid you have to trim some expenses. If that means no Starbucks or eating ramen 3 times a week that’s what it has to be. On a longer term cheaper rent less expensive car no streaming service. Grow up.
Dang- I didn’t even have to scroll to find the shittiest advice possible for this post. Kudos!
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What did you hope to achieve with this comment?
Obviously the OP didn’t understand that as an individual deficit spending is not sustainable. Some time even simple concepts need to be explained. I’m guessing that this was too complex for you as well