Mr. Money Mustache- Reader Case Study: 'Stashless in Seattle

The blog I read was a case study that MMM took into consideration and observed. Within the blog he reveals the letter given to him by a young couple living in Seattle, who unfortunately are bogged down with debt and expenses that prevent them from living the life they would like to. It's obvious from the letter they sent, they really haven't made the best decisions regarding their financial status, and MMM states plenty of times in his response. To make it simple, he breaks it down into three main problems that the couple is making with the financial assets they have.

First, he addresses the mindset in which this couple has about debt. In his opinion, they are taking this much to lightly, conveying that they are in an emergency. This couple has spent their money in the wrong ways, worrying about luxuries, rather than necessities. According to him, they must first reduce and eliminate both consumer debt (i.e. A much too expensive car payment) and student loans before purchasing any other luxury items or services. Next, he goes on to continue his explanation of why a car payment of $11,784 is much too much for their situation. He recommends selling the car as soon as possible, and to simply buy a junker that can get them to and from work. His last major complaint of their lifestyle is the food expenses they have. This couple is spending an excess of $800/month for both groceries and eating out, which is quite pricey for having such a large sum of debt. MMM believes that if they scale down their food expenses to $300/month and realize resources like Costco and home-cooking, they will reduce expenses considerably.

Furthermore, he gives recommendations of how to cut out expensive phone payment plans by switching to pre-paid plans and he urges this couple to keep their aspirations to own a house at a minimum due to their current debt. If they were to save for a house, they would be earning only 1% interest on the money being put into the saving account, basically getting them nowhere. He also mentions that since Seattle is a thriving city with a very limited amount of skilled workers, there is always a chance for more money to be made. Finally, he recommends biking rather than driving because it is without a doubt a high return investment.

In total, MMM calculated that this should return a cash-flow surplus of 23,640. Not to bad. Actually, really good if I had to say so. MMM obviously knows what he is talking about and seems to be helping people in most simple terms he can put it. I feel as if I implemented some of these ideas into my life, the savings would start to pile up.  People who are struggling financially should definitely check this out, and understand how many opportunities they have to be financially stable.       

    http://www.mrmoneymustache.com/2013/04/16/reader-case-study-stashless-in-seattle/