Factors:
Having a good paying job?
Apartment or house living?
Living alone, with roommates, or with a SO?
State or county tax rates?
Student loans or other debt?
If you only spend on what you need rather than what you want, unless if you have the extra money to do so?
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It’s not that hard, once it gets to be a habit.
Total up your monthly after tax income. Donate 10% to church and other charities. Invest 10%. Live on the remaining 80%. (Yes, you can.)
Never borrow money to buy a depreciating asset. That means don’t borrow money to buy a car.
Save up, get a junker, drive it into the ground.
Get a no-fee credit card. Put everything on the card. Pay off the balance, in full, every month, no matter what. (No, that’s not a good enough reason.)
If you are going to incur student debt, make sure it is for a degree that will assist you in getting a job. People who tell you to chase your dream are setting you up for a lifetime of debt. Learn to do something people will pay you to do.
Essentially, learn to delay gratification. Everyone else who doesn’t know how to do that will tell you it can’t be done, or shouldn’t be done, and tell you all their reasons for their not doing it. Ignore them.
[ul][li]Graduate from high school.[/ul][/li][ul][li]Don’t use drugs, and don’t associate with people who use drugs.[/ul][/li][ul][li]Get a job, any job. Stick to it for at least a year. Don’t quit it until you have another, better job lined up.[/ul][/li][ul][li]Get married and stay married. Marriage is the single most successful anti-poverty program ever invented, especially for women.[/ul][/li][ul][li]Don’t have children until you are over twenty one, married, and can support them.[/ul][/li]Is this all guaranteed? Of course not. The race is not always to the swift, nor the battle to the strong - but that’s the way to bet.
Regards,
Shodan
PS - You can’t time the market. Buy and hold.
There ain’t no such thing as a free lunch.
“Life is pain, princess. Anyone who says differently is selling something.”
How old are you OP?
To me it really comes down to a few major factors.
Do you have marketable skills that not only pay well, but allow for a stable job (a lot of jobs nowadays are permatemp or contract so no stability and few benefits).
Do you live in a high cost of living area or a low cost of living area.
Do you have spending habits that could get you in trouble.
The sad reality is that point 1 is becoming a bigger and bigger issue. Even when the unemployment rate is low, wages stagnate and benefits for employees get cut. Then when the unemployment rate spikes, wages get cut.
Cost of living varies drastically where you live. You can find a modest house for under 100k in a lot of places in the US. If you live in a large city on the coasts, its going to cost a million for the same thing. But job opportunities and amenities are better in the large coastal cities.
Generally living with roommates on the coasts is more acceptable due to higher housing costs. If you need a roommate in a low cost of living situation, then that could be a problem because it only costs an additional few hundred a month to live alone. Which means the people who live with roommates (other than college students) could be dysfunctional.
State and county tax rates usually aren’t bad. Taxes seem to mostly come in 4 flavors:
FICA taxes (social security and medicare) - about 7.65% of your gross income
Federal income taxes - Maybe 10-20% of your gross income depending on income (it goes higher though)
State/local taxes - depends on where you live, but maybe 5% of gross income
Consumption taxes (fuel tax, sales tax, sin tax, etc)
Overall you can expect to pay roughly 20-25% of your total income in taxes.
I’ve know people who live on $500 a month. They live in a low cost of living area with a roommate, bike/bus/walk to get around and eat fairly basic food. They use medicaid for health insurance or go without.
It also depends on things like do you have dependents, is it a low or high cost of living area, do you have pre-existing debt, are you comfortable with roommates, do you have expensive health issues, etc.
I’m an adult (in some ways) who has his own car and his own apartment with no roommate. My monthly living expenses generally hover in the $1200-1500/month range. But I live in a low cost of living area, have no debt, have no children.
I could cut $500-700 a month off of that by getting a roommate, using the bus instead of a car, and eating rice instead of the foods I eat. But its not worth it to me.
From Charles Dickens:
I have a low income but an even more frugal lifestyle–so have no problems.
Much of this was the key to being able to stay in the military on enlisted pay for all those years while raising four children. We got out of debt within the first three years and stayed that way. Our first new car lasted 13 years, and our furniture lasted over 20 years. The kids wore a lot of hand-me-downs and the credit cards were paid off every month. Nobody wanted for anything essential and there were always presents under the tree at Christmas. My ex was a PITA in many ways, but the woman could manage money with the best of them. Most careerists that I knew were drowning in debt and living paycheck-to-paycheck.
I’m a 22 year old college student who’s about to graduate in December of this year.
My parents also encouraged me to stay with them after college so that I can pay off some of my student loans (obviously not forever).
Furthermore, I already have an idea of how expensive living on my own can be. I have a semi-frugal mindset for some parts of my life as well, especially when it comes to grocery shopping and living arrangements.
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Same thing with me. Doesn’t hurt that I never had children, and had a low-6-figure job for many years and didn’t blow that money. I do live in a 2BR apartment, but the second bedroom is used for storage for my home-based business. I also don’t live on fast food, which gets more expensive than many people realize.
I’m a single woman without a college degree. I’ve worked “pink collar” jobs most of my life. But I have only one debt presently (a 15-yr mortgage on a rental house, where the current rent is almost double the mortgage payment. I own my farm outright. I have horses and dogs, no kids. I presently save a dollar for every dollar I take home. I haven’t always been able to do that, and I’ve had to dip into my savings during periods of unemployment. But I have enough saved to retire comfortably when it’s time.
The secret? Be stable - work hard and go to work even if you don’t feel like it, or if the job is less than satisfying. Do more than expected and grow your skillset. There are no “take this job and shove it” moments - you work until you find something better. Do without, when you can. Buy used and save the difference. Learn to be happy with what you have, and look at the possessions of others as burdens, both financially and spiritually.
This year my neighbor bought both a new Kubota tractor with pretty much every attachment, plus a 36 ft camper, both brand new. And while I wish I had a new $35K Kubota, my little 45 year old used Yanmar does what I need, and it cost $1500. And I have no need of a camper - I have a farm and a front porch. I have a friend who may take 4 out of state vacations a year, and just bought the $3500 camara she just had to have. And she has taken $10-$24K from her 401K every year for the last 3 years. She has stuff. I have security. That doesn’t mean I live in a one room tenement and hoard every dollar, it just means I think twice, then 3 times before I spend money.
StG
Send less than you earn. Your earnings are known and fixed. The adjustable variable is spending.
Too many young people these days don’t seem to realize that student loans are exactly that - LOANS - and must be paid back.
That can also financially cripple people.
Learn how to buy shit cheaper. A dollar saved isn’t a dollar earned, it’s actually $1.39 because of taxes.
Live within your means. Once you have some money, learn about vertical debit call spreads.
Once you have some money, spend some. On others, first of all - but also yourself. Within your means doesn’t mean cut to the bone. Build wealth. Spend less than you make, invest the difference. Very aggressively when young, still pretty damn aggressive when older. Figure out a way to make money where you are not easily replaced by a high-school kid, or an algorithm. Easier said than done, but critical. This should be an obsession until you get there. When you plan, try and have it be able to withstand a significant ding in your 40’s. Lots of people lose a job in that decade and never recover. Others discover long-term health issues. So consider any wealth building after 45 a bonus.
Spend at least 4 hours a week on personal finance. And remember, can’t improve what you don’t measure, so track everything.
Understand that many people are idiots. Especially on-line. So most advice you get is not that good.
yes
Another recommendation would include moving to cheaper areas of living.
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My sister has always had more money than I do… wait, NO. She’s always MADE more money. But she’s always been in debt.
See, she has to have a big house (just built a bigger one), a country club membership, top-tier cable, and two new cars (both with heated leather seats, which she can’t get without the top trim package…). Oh, and a couple of Disney vacations and cruises a year.
Meanwhile, I’ve worked for non-profits and taught school. Made a quarter of what she has. BUT, I spend a tenth of what she does. Tiny house, TV with rabbit ears, a used ($2k) hybrid car. And we vacation by visiting friends.
But I just got to retire. Earlier than I’d planned, thanks to savings, investments and a pension.
And having humble monthly expenses.
Sister: “Oh, it’ll be decades before I can retire. I mean, with our expenses… And don’t forget, our mortgage is four times yours!”
As if all those are factors out of her control.
The lesson here: those factors are not out of your control.
Live frugally (and invest). Pay off your credit card every month, or pay cash, but only buy things you really need… and it’ll pay off later.
Ok. I’m curious why you think bull call spreads are essential.
Not necessarily. There’s often a reason they’re cheaper. No jobs or a very long commute.
The key is to make enough money that you can participate in wealth accumulation (savings, buy property, stock market investments, etc). If you’re not that far up the food chain, then figure out how to get beyond minimum wage first.
I grew up poor with no safety net. Worked my way thru university with minimal loans. Made for a leaner university, but less of an albatross around my neck after univesity When I started working overseas as an English teacher, the first order of business was to save $10k. That would be enough to get me back to the US, an apartment, a crappy car and 6-12 months buffer while looking for a job. I got my first professional job, and worked like hell to get $100k in the bank. That gave me great piece of mind and I’ve never come close to not have that much liquid assets on hand. The second 100k didn’t give as great a satisfaction but still felt good.
I had a pretty entry level investment banking job for 7 years in Asia. I worked with traders and other folks whose housing allowance was greater than my salary and bonus. And I saved more money every year than most of them. I will admit, they had more fun as in flying to New Zealand for a week of skiing in the summer, Austria in the winter, and other such things. Since I lived in Tokyo, I would go snowboarding for a day trip or a weekend. So I had plenty of fun on a budget, and they maybe had more fun blowing the budget.
As an adult working professionally, I have always had much more cash than what all the “experts” say I should. That said, it gives me great peace in these times to know I can not work for a couple of years and still put my kids thru private college…of course retirement funds will be sucked down but I can get my kids educated and out into the world debt free as my worst case scenario. I can sleep ok. I have great empathy and simply cannot imagine what 50% of my fellow americans are going thru as covid is destroying their jobs, homes, equity, retirement, families and education.
Are you me? 
If I may, a rant of mine from a while back – on fellow boomers and their financial idiocy:
*At the personal level, each Christmas brings us new revelations about the state of our baby boomer relatives. And this holiday is no different except it’s getting much, much worse. Anecdotally, I’d say we’re entering the boomer apocalypse now.
My wife and I became concerned about the state of the economy, wrt retirement systems (pensions, SS) when we got married. So we started investing for retirement in 1981. Seriously. And for the next 40-ish years, we wondered how they (relatives) did it. How did they afford those amazing houses? Why did they need 7 bedrooms and 5 bathrooms for only 2 kids? How were they managing their second homes, sometimes in Europe? Wow, we must really be failures – our Camry looks kinda sad next to those 7-series BMWs and Mercedes. And the overseas skiing trips to Switzerland while we go camping in a popup? And the weddings with hundreds of guests and horse-drawn carriages? And… well, you get the picture.
And now the wheels are coming off – big time. They’re grouping together in (fewer and fewer of) those giant houses. They’re retired, but not by choice. And they’re losing houses, cars, and much of their former lives. There isn’t enough money nor enough time to correct things now. Apparently the clever method of spending X days out of the country to avoid income tax apparently comes with a downside – not enough quarters for SS (or only miniscule amounts), and their extravagant budgets apparently did not include setting aside some for old age.
And with each new disaster – more manage to haul themselves into the already leaky lifeboats of their kin, and they’re starting to capsize each other.
So now… they’re starting to look toward us. Our 4 decades of thrift, savings, investment, and living well below our means have left us solvent and well-off – and ready for an easy life in retirement. We have our paid off house, our boat, our RV and our kids successfully launched and independent. Wow, they could sure use some help with bills, or rent, or a place to live “just while I find a new job!”. And this has only one ending – a bitter split from the family that I’d prefer didn’t happen. But we vowed to each other not to open our house or our wallets to correct someone else’s mistakes. It would likely capsize us, and we won’t let that happen.*
To the OP: If living a financially stable life seems difficult, you should see what happens when you don’t.
It certainly depends on what country you are in. In the US, you are pretty much are stuck in whatever class you were born in.
You can still live well even on the lower end of the US economic ladder. Not at the very bottom, but you don’t need six figures to live decently.
I earn less than $25,000 a year but have my own place, no debt, about six months worth of money in the bank, two reliable (if aging) vehicles that are paid off. I am contributing to a 401(k) that, admittedly I started rather late in life but better late than never. I am planning to keep working until 70 (health permitting, but so far it looks good) to maximize SS even if the job I am working at isn’t glamorous or tremendously high-paying (I suspect my peak salary was back in 2006).
A lot of that has to do with:
[ul]
[li]ability to delay gratification - I save up to buy things rather than buy on credit[/li][li]living within my means - sure, I’d like a bigger place to live, but I live in 1 bedroom apartment for budget reasons.[/li][li]buy quality - this can be hard to get started, but long term it pays off[/li][li]ability to shed things - this took awhile, but I am selling off quite a bit of stuff I no longer want, and other stuff I’m just getting rid of so it doesn’t take up space that I would have to pay for[/li][li]any debt, no matter how minor (maybe I have to borrow for a major car repair or for a medical bill) is ruthlessly managed - if I can’t pay it off by the end of the month it’s either use a bit of savings to wipe it out then come up with a plan to replenish savings and stick to it or come up with a plan to pay down the debt as rapidly as possible and stick to it. For example, a few years ago I had to get an MRI. Although offered a $35 month payment plan for the co-payment I said no, I’m paying $100/month because I could do that. So instead of taking years to pay it off it was gone within months.[/li][li]most important - if your incomes decreases you must make changes. Sure, I used to fly airplanes as a hobby but when I lost the high income job I also shed the hobby (I also made it a point to never put flying on the credit card and only went flying after all other bills were paid - basic needs first, then expensive hobby). I see too many people try to maintain a lifestyle when they crash economically and you just can’t do that. Sure, when I was laid off in 2007 it was distressing to halt the flying, stop eating out, stop doing a lot of things we used to do but it was absolutely necessary. If your circumstances change you must change. That might even include >gasp!< downsizing your living space.[/li][/ul]
My spouse and I were a lot like pullin - we saw others living quite lavishly, I recall being told I “should” upgrade my housing to something “better”, I “should” buy a new car every few years, we “should” do this, we “should” do that - but we paid off our credit cards by our mid-30’s, along with the student loans, drew up budgets and stuck to them, and lived a lot more modestly than some of our social circle. I’ve seen a lot of people I know crash and crash hard. We’re going to see more of that going forward with the Pandemic Depression. Sure, some things are out of your control, and luck really is a factor, but no matter what you’re going to do better with no debt and even modest savings than you would with debt and no savings.
If you’re above poverty level yes, you CAN live a financially stable life… but you will have to employ self-discipline, and the less you have in the way of financial resources the more self-disciplined you will have to be to achieve that goal.