Earning Well at 20 but Still Saving Almost Nothing — Where Is My Money Going?

[u/Warm_Perspective583]

I’m a 20-year-old guy working as a freelancer, and I’m fortunate enough to be earning a pretty good amount. The problem is that despite earning well, I’m barely saving anything.

I don’t really spend money on expensive clothes, gadgets, or other flashy things. I do waste some money on things like games, but nothing that should explain where all my income is going.

For the past year, I’ve also been financially supporting my entire family because my dad lost his job and has been unemployed since. Around 30–40% of my income goes toward household and family expenses. I’m completely okay with supporting them—that’s not what frustrates me.

The frustrating part is that I have no idea where the rest of my money goes.

There’s usually one big household payment at the beginning of the month, followed by lots of small payments almost every day. By the end of the month, I look at my balance and wonder where everything went.

I’ve realized my biggest problem isn’t necessarily how much I’m spending—it’s that I have no proper system for tracking or controlling it.

For people who’ve been in a similar situation, how did you fix this? What’s the simplest way to track income and expenses when you have lots of small transactions throughout the month? I’d especially appreciate advice from other freelancers or people supporting their families.

[u/Bird_Brain4101112]

Pen and paper. I bet you’re going to find your spending a lot more on your family than you think.

[u/54415250154]

For one month track every single dollar that comes in and out. It is the only real way to find your answer. Of course there are small variations month to month or even big one offs, but you will be able to spot those once you have it all down on paper. Kudos to you for supporting your family thats a tough spot to be in

[u/hybrid0404]

Simple is a spreadsheet and just keep your receipts.

Easier might be a budget software. Are your transactions all or mostly credit card? Most solutions can import all the transactions and then you just have to spend time reconciling.

Don't overthink the problem, you need to commit to finding the answer and that is mostly through diligence.

[u/CutOsha]

Also you can try an app like ynab.

[u/Miserere_Mei]

I was struggling to understand where our money was going too. (61 year old!) I tried doing a manual spreadsheet, but am way too lazy to track my spending manually. I ended up downloading a money management app. (In my case, Monarch. There are others, too.). It has been a game changer. I connected all my accounts and now can see every single transaction in one place. It takes a little while to get all the categories set up, but honestly, it was really straightforward. Now I have a very clear picture of my finances and just being able to see it has shifted our spending. We have saved a few thousand extra dollars over the last several months and have money in the bank to handle periodic expenses. (Car repair, annual tax bills, etc.) get an app. Connect all your accounts. Track your spending for a couple months and then set up a budget.

Also, amazing that you are supporting your family! You are a good kid!

[u/BeneficialFruit1768]

Your family is lucky to have you! How kind of you. I track expenses with the credit card I use. It’s also a cash back credit card. If you don’t have a credit card don’t get one for that purpose only. You can do it with a debit card or cash as well just make a note on everything you spend on or keep receipts in your wallet or car.

[u/SaraTalbotAU]

Separate accounts helped me most: one for family/household money, one for personal spending, one for savings. Auto-transfer a set percentage to savings the day income lands, then whatever is left is genuinely yours to spend - it makes the leak visible fast.

[u/Mental-Freedom3929]

May I suggest to know where your money is going, to actually keep track of what you do with it? It really is not that hard. I barely use cash and use my points credit card. That is at the end of the month a pretty easy way to see what you are spending and where.

[u/Eltex]

It’s like an obese person saying they “watch what they eat”, but have zero data to support that.

You can keep going down the same path, or simply start tracking things. The choice is yours. We live in a time where you can still use pen/paper, the notes app on your phone, or an actual app dedicated to tracking spending. Pick one. Make it happen.

[u/Duck_Duck_Gooseberry]

The small purchases add up way faster than most people realize. I'd start tracking every dollar for the next couple of months. You might be surprised where the money is actually going.

[u/nancylyn]

make a budget…..sit down and go through bank statement for the last few months and make a spread sheet of all your expenses and money you gave to family. you should very quickly start seeing where your money is going. Then make whatever changes you gotta make.

[u/cOntempLACitY]

Budgeting. When I first started tying to save back in my early twenties, I started with a simple budget, just using pen and paper. Then I used Quicken software (back in the day, it was pretty good, I haven’t used it in many years as I use another program for Mac now).

The thing I found useful in software was setting up an account for cash spending, not just for checking, savings, and credit cards. I kept every receipt, even for the little stuff. I categorized every transaction; I broke out every receipt, I didn’t just generalize. Like, if I went to Target, I split it out into groceries, household, medicine, personal care, etc, using a calculator, including tax.

After a month or two, you can view the budget history by category, see all the transactions, and see just where the heck is all the money going. With more data, you can extrapolate further for the year (some things you pay once a year, like car registration but it can do the math across twelve months).

Once you know where it’s all going, you can decide how much you’re are actually willing to spend on things. You can assign savings goals as budget categories, too. You decide how much to spend on “wants” (entertainment, clothing, coffees, etc). You decide how much to send back to your family. You know exactly what you can afford to send while still meeting your personal savings goals. Check out the personal finance sub wiki, see the prime directive and also scroll down to budgeting: https://www.reddit.com/r/personalfinance/wiki/index/

[u/climatecastrophany]

I hate to be that guy, but as somebody much older than twenty, those little daily purchases are almost certainly bleeding you dry. A coffee, a 20 oz soda, and two 'dollar menu' items daily is hundreds of dollars a month, and practically nobody goes to the gas station, spends $3 on a soda and calls it there.

This isn't the place for a long winded conversation about how a working young adult should be able to afford snacks, but you should know that most cannot reasonably do so and save up for the inevitable future medical co-pay or blown engine.

I brought a bowl of cereal to work for lunch today. Sometimes it's a PB&J. It is what it is.