The reason you’re in debt may be hidden in plain sight


More Americans seem to be spending beyond their means. And as one Reddit user discovered, living like this for too long can make it hard to get back on track.

The Redditor, which goes by vitreous_luster, posted on the personal finance subreddit ask for help creating a budget for the first time. After researching his costs, he discovered that he had about $700 in the hole each month, with monthly expenses amounting to $2,100 and a monthly income of just $1,430.

“I lost my full-time job last April and now work part-time at a bank while attending college during the day,” he wrote. “I’m overwhelmed by it all. I would like to start getting out of this hole, but I don’t know where to start.

He spends almost as much on transport as on rent

Like the average American, the Reddit user spends about a third of their income on housing. And he actually seems to be spending less on certain things, like restaurant meals and health care, according to data from the Bureau of Labor Statistics.

Category Average expenses Percentage of expenditure

Total Average Annual Expenditure









Personal insurance and pensions



Health care



food at home



Food Away From Home






All other expenses



Cash contributions









Personal care products and services



But some of his spending is clearly out of proportion, especially compared to average consumer spending. For starters, the Redditor spends nearly as much each month on transportation costs — about $585, including car loan payments, car insurance, gas, tolls, and other car-related expenses — as he does on rent. ($600).

While transportation is the second largest expense for the average American consumer, most Americans spend half of what they make on housing on transportation.

Also see:People rarely ask these questions when buying a car, but they should

Commentators seized on it. “You have to sell the car,” one user replied. “If you’re somewhere where a car is needed, move…Ideally all inclusive with gas, insurance, etc., you’d want to spend less than $200 on a car, and given gas costs and insurance indicated, this does not seem within the realm of possibility.

Other Reddit users suggested looking for ways to reduce car-related costs, such as getting cheaper car insurance by bundling it with renter’s insurance or always striving for the cheapest gas. expensive possible. One commenter even suggested looking for companies that pay drivers to attach ads to personal vehicles to offset car-related costs.

Additionally, many commenters took note of the amount of money vitreous_luster said he spent on groceries. While the average American only spends 7% of their total expenses on food at home, the Reddit user said almost a fifth of their monthly expenses are on groceries.

Always negotiate and compare prices

One of the clear lessons from how much the Reddit user spends each month is that spending money without doing research is a recipe for financial disaster and sometimes the reason you’re in the red is hidden away. everyone’s view.

For starters, vitreous_luster bought a 2012 Volkswagen Jetta for $13,000 last year. “My current car was dying, I had $0 in savings and needed a reliable car ASAP. I realize this is not ideal and my financial situation was better when I bought the car,” the user wrote.

Other users noted that the price seemed high for this brand and model. Plus, the data shows that buying an older car for less money might have been more beneficial in the long run.

Worse still, the Reddit user noted that he was in a bind because he now owes more on the loan ($11,000) than the car is worth ($8,000). Without savings, there is no good way for him to get out of this situation.

His best bet: Negotiate with his car lender. Research has shown that most people pay too much when it comes to auto loans, and the lender might be willing to modify the loan to make it more affordable for the Redditor.

Read more:5 reasons NOT to shop at Aldi – and a big reason why you should

Similarly, the Reddit user noted that he’s not picky about groceries: “I don’t eat out very often, but I cook a lot and literally never check prices when shopping. shopping, I get just what I need for the recipe.

Commentators have suggested a variety of approaches to reducing that cost – from buying what’s on sale and basing meals around that, to buying food from budget chains like Aldi or warehouse clubs like Costco COST,

Other grocery tips can save consumers a lot of money, including buying only seasonal or frozen produce, having the butcher process a larger cut of meat for you, or even just going through the store clockwise.

Stay humble and consider side hustles

Another option: consider going to a food bank. “There’s no shame in that, but don’t forget to pass it on when you’re in luckier circumstances,” suggested Monica Dwyer, certified financial planner at Harvest Financial Advisors in West Chester, Ohio.

While Reddit commenters have focused on ways vitreous_luster could cut spending, financial advisers have suggested that spending isn’t so much the problem as a lack of income.

Also see:40% of Americans struggle to afford at least one basic need like food or rent

“I think the big problem is that his turnover has dropped significantly, he has gone from full-time to part-time and he has limited expenses that could be reduced,” Lorenzo Sanchez said. , financial planner at Rowling & Associates in San Diego. “It leads me to believe that he will be fine once he returns to full-time work, which he eventually will, and that his struggle is temporary.”

In the meantime, Sanchez and other advisers suggested the Reddit user explore other part-time gigs through services like Uber, Door Dash or Wag. “He has two things he could put to work, his time and his car,” Sanchez said.


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