Now, I'm going to start this off by saying a few things. Firstly, I grew up in a motel with a dad who lived... in the moment. Due to this, I began to learn how to survive by thinking of the future (I'm making it sound a bit worse than it is, I guess, but I was very stressed out about money, even at the age of 12.) I started to learn how to make very little money last me quite a while. I have subconsciously fine-tuned said skills over the years, and now I want to share some of the knowledge I've gained.
We live in very stressful times. It may get better, it may get worse, none of us really know for sure, we can only live in the moment and hope for the future. Believe me, truly, I understand. It's scary. Terrifying, if we will admit the truth to ourselves. But even still, there is hope.
I've lived in poverty for most of my life. And I do mean that as in all but a year or so. I know how to take a dollar and make it stretch. And so, here's the actual blog.
There is a retirement fund called a Roth IRA. I don't know much about these specifically, I am not going to say I am a banker... However, you can look into it for yourself. I will post the links at the bottom.
If you start out this account with 50 dollars in it, and put 1,000 dollars a year into it starting at the age of 23 (that's about 82 dollars a month or 20.50 a week) you will end up with 329,850. Using the second link, I put in the full amount at retirement of the calculations I chose, and put 20,000 dollars a year as what I'd spend at retirement. Now, with inflation it'll probably be more than that, but even with that tiny amount put away every year, you'd be able to live for 20 years.
Now, here's the thing. That's assuming you are only putting 20 dollars a week away. 40 out of your bi-weekly paycheck. That calculation, that simple calculation is assuming you only ever put that away.. Here's how I think about it, in terms of myself.
Say I were to get a job again soon (which I hope happens..) that is 8.50 an hour, 40 hours a week. I am married, so I'll pretend Jason is my roommate for those people who aren't. That will come into play in a minute or two. I did the calculations just now, and at that wage, with 15% tax taken out, (and I'm not counting the government giving it back to you at tax time) you have 1252 to play with.
Now, here's my logic on the next part. Theoretically, whether you live in the city, where most people get roommates to be able to afford anything, or you live in the suburbs/normal sized towns across the US, rent is about 600 bucks. By that I mean if you have a roommate in the city and rent is usually idk, 1200, you're forking over 600. Generally water etc is included, not counting that. For transportation (i.e. a car or public transportation monthly I'll say idk, 100 bucks a month for that. I'm leaving some room throughout all this for personal adjustments.. car insurance etc I don't know much about tbh, I don't drive. But so far you're up to 700 out of the 1252, so I'll say about another 150 or so for utilities if you're living alone and living frugally. Now you're up to 850. For basic necessities for the month, 50 bucks. (Toilet paper, paper towels, dish soap, laundry, bathroom stuff(shower)) you're up to 900. You still have 352 left to work with.
Here and there you might miss a five due to your own personal living habits, etc, but again.. Trying to be as general as possible. 352 is quite a bit. Let's just take that 85 out right now (rounding up to make things easier . That leaves you with 267.
I'm hoping you're able to keep up with my scatterbrained tendencies, sorry.. if not feel free to contact me and I'll try to explain better.
Now, if you're paid bi-weekly, here's what you are looking at. 300 for rent, give or take. 50 for transportation (bus pass or gas) 75 for utilities, 25 for necessities, and 100 for food. (I'm just going to say screw it, and give you the other 67 to play with, but you can always put that away too, or save *that* in the bank for emergency funding like losing your job.)
200 a month for food is the next thing I am going to talk about here. That's a lot of money on food. Honestly, it is. You can if you buy intelligently and can do basic cooking, live really well off that. Use coupons, stock up on pasta and rice. Get some bulk pasta sauce (like, big jars.) and parmesean. Bread and lunch meat or pb and j. Eggs, milk, if you get some of it store brand you'll be saving yourself money. Cereal, bagels even if you want. Chicken and meat.
Some tips:
-Invest in ziplock bags. Portion up the meat into serving amounts (1 chicken breast, half a lb of ground beef, etc) and freeze some.
-When you get the rice, freeze the bag for a week. Not to sound gross, but sometimes they do have eggs in them, and it's better to be safe than sorry. By freezing it for a week, it kills all the eggs. Also, keep it in a cool dry place. Above the stove is a very bad idea.
Get vegetables when you can, whatever kind you like. Salad fixings. You really can afford all of this if you aren't buying munchies and soda first. Figure out how much you'll go through of real food a month before getting soda and stuff. Stock up on rice and beans or ramen and butter and canned veggies(which often go on sale) for if you ever miscalculate.
Now, keep in mind.. You won't be working minimum wage forever. Eventually as you live your life, you will grow into better jobs with better pay, and be able to save more and use more.. So this is only a bare basics thing. You have 40 years to put money into this account. There is hope. Every day you live puts you one step closer to new experiences and new things. I guess I'm done now, feel free to comment if I left anything sort of hanging (I might have, I forgot). Most of all, good luck and stay safe. And remember.. If all else fails, you can always go for food banks.
Roth IRA Calculator: http://www.dinkytown.net/java/RothIRA.html#calc
How long your retirement will last: http://www.dinkytown.net/java/RetirementDistribution.html
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