Q: I just graduated college and landed on a pretty good job. It’s nice to have a paycheck coming in every two weeks, but after paying my student loan, auto loan and credit card debt, plus rent for my apartment, I’m dismayed at how little I’ve left to spend. Now I want to enjoy life a little and not live like a scrooge, and yet have something for a rainy day, which seems to be impossible with my debts and a reasonable lifestyle. What do you suggest? ---Chris

A: The Employment Benefit Research Institute reports that 70% of American workers age 25-34 and 50% of workers 35-44 have savings of less than $25,000. Obviously, if they are hoping for a comfortable retirement at 65, the people with less than $25,000 are way behind in their saving-for-retirement plan. This is strange when you consider that in a New York Times poll 68% of workers 18-44 said they thought Social Security would not have the money to pay them benefits when they retire. So, most of the workers around your age and older don’t have confidence in Social Security and they haven’t saved much for old age either. Perhaps more young people should be concerned about the future as well as the present when you have plenty of time to think and act. In your case, with all the loans and credit card debts to pay off, you’d be much better off with budgeted spending. You’ll see how easy it is.

If you’re using Monechron to write checks and balance your accounts, push the Expenses and Budget button (the middle of the row of five at the top of the page), then click on Budget, and then the Edit Budget button. Start your budget by entering your monthly income (i.e., your take home pay), then the items you must pay each month, such as rent, car payment, food, and other living expenses, etc. Now see how much you have left, and take an amount out of this that you are comfortable with, and budget it as "Savings." Let’s say $100 per month until you get your first raise and can afford to save more.

What if that leaves you too little for discretionary spending? Here you must decide if the trade- off is worth it. You may not be able to sit in Starbucks and shoot the breeze with your colleagues as often as you’d like, or get season tickets for NFL games for a couple of years. But think about how good you will feel at the end of a year when you have reduced your credit card debt by $1,200 more, plus the high interest (usually about18% or 19%) on that amount. You will see that it snowballs, because the more quickly your pay off your debts the less you will have to pay each month. As your debts and payments shrink you naturally have more to spend and to save for the future. Your enjoyment of certain things is deferred. The payoff? You have the satisfaction of being on top of your finances.

So, whatever the amount you save, once you put it in the budget, you must treat it as required spending. It gets paid before discretionary spending begins. It’s hard at first but it becomes easier and easier as you grow accustomed to living with a budget. And it sure beats being 45 and having less than $25,000 in savings.