By Natasha Frost Rate.com WWR Article Summary (tl;dr) Natasha Frost shares saving and spending tips to weather these difficult and uncertain times. Rate.com You’re young, well-educated and capable. And in most economies, your salvation would be moving through a series of increasingly responsible, and well-paying, jobs. Your rising income would allow you to whittle down student loans, save up for a down payment and even contemplate having children with that special someone. But the coronavirus economy is stifling you and millions of others, and the paucity of opportunity could go on for some time. So, to help keep you from sliding backward financially, here’s a rough guide to transitioning to a sustainable lifestyle. By all means, keep seeking a better next job. But in the meantime, I suggest you follow these four steps. Soon, you’ll be worrying about money a lot less. A test case Let’s assume you’re a Philadelphia-based household of two 28-year-olds. Between the two of you, you earn $72,000 (you’ve combined your finances). You have an emergency fund of about $1,000, but not much else saved. Meanwhile, as a couple, you’re working through $60,000 of student debt and $5,000 in credit card debt. You’d like to get that debt in check, amass a down payment for a home and be positioned to consider having children in three years. You estimate you might need $3,000 to $10,000 toward the cost of having a child, and $20,000 for your down payment. But where to start, when you already feel constrained by the high cost of living? -Pick a lifestyle you can afford Housing is your biggest cost. With a budget of $1,100, you can live somewhere perfectly nice, with a few compromises. The average one-bedroom apartment in Philadelphia costs $1,591 a month, about $500 more than your budget can stretch to. You have three options: downsize, share with other people or move somewhere cheaper (though calculate the cost of increasing your commute before you sign the dotted line). If you’re set on staying in the city, a studio or smaller one-bedroom may be the right compromise: A 600-square-foot apartment in Fishtown might set you back about $1,000. Looking further afield gives you more options: A 900-square-foot two-bedroom apartment in Drexel Hill, eight miles out of town, currently goes for around $1,050. Your next biggest cost is a car. Choose something used, pass on the fancy features, and pay off your loan quickly. A 2015 Toyota Camry, bought through the used car sales app Carvana, is about $16,000. Over three years, that’s about $450 a month. But consider whether you need a car at all, especially in a well-connected city like Philadelphia. -Deal with your debt Paying off your high-interest credit card bill can give you a bigger return on your money than pretty much anything else. Killing off $5,000 of credit card debt in five months is daunting, but doable, at $1,000 a month, or a little over 20% of your after-tax combined income of $4,800 a month. The easiest way to save or pay off a big bill is to check yourself out of the process. Set up automatic transfers to your credit card bill for the day your paycheck gets in. If you don’t have to think about it, you won’t find excuses not to. Once you’ve paid off your credit cards, close all but one, and keep it for emergencies and to build a credit score. Give yourself an imaginary limit of 30% of your actual limit, and do your best not to exceed it. When your finances and credit score are a little more stable, consider exploring refinancing your student loan. Going from an 8% interest rate to 5% on a $30,000 private student loan would save you $5,494 in total and $46 per month over 10years. -Save like a professional Five months in, you’ve successfully tackled $5,000 in credit card debt. Congratulations, so now what? If you continue to set aside $1,000 a month, you’ll reach $30,000 in savings in just over two and a half years. Maintain the same habits you set up before, which rely on automatic transfers rather than self-control. Ideally, your savings account should be a little difficult to access. You want to be able to see the numbers grow, but not be reminded that you have access to a growing pool of money. -Learn to budget Once you’ve worked out what your regular expenses are, make a budget for the rest and stick to it. Your monthly breakdown of a total $4,800 might look something like this: $1,000 savings/credit card debt $700 student loans $1,100 rent $500 groceries $150 medical costs $450 car payment $150 utilities This leaves you with $700 unbudgeted to be spent on clothing, one-off expenses and leisure. There’s more than room for a coffee or two! To make sure that money goes on things you actually want, use a service like Mint or Trim to go through your subscriptions and make sure you aren’t paying for things you don’t want. Go through your bank account for other regular charges and ask yourself what you actually need, between unfulfilling streaming services or magical-thinking gym memberships. Lastly, consider an app like Digit, which siphons off small, manageable amounts of cash from your current account. When you’re overdue for a treat, turn to the app. You’ll likely be surprised at how much you’ve set aside without even noticing. __ Distributed by Tribune Content Agency, LLC.