There’s more to getting out of debt than just basic math. I’ve been trying to keep track of my expenses for more than 20 years but no success so far. I do have online banking and a list of contracts but there’s no way for me to figure out how much money I actually have left. Because for example, that yearly medical copay may be around the corner. I have no idea how to account for it, or how to spread it over the months while still keeping track of how much disposable income I actually have at any given time. And that’s just one example.

Please be aware that not everyone is financially literate.

What I recommend is to focus on the big expenses, those are what gets you. That is, housing, transportation, medical (if you live in the US, but there's maybe not much you can do here). Don't go for the most expensive house or apartment that you can afford. If every house is expensive in your area, then settle for an apartment. If you're not willing to, then that's the root of the problem. Go car free if you can. If you can't, get a cheap reliable used car (mine was $4k, worked like a charm). Don't eat and drink out very often. Cut expenses until you're saving 30-50% of your paycheck. If you're in tech, that's very easy, otherwise it's difficult but still doable. Then, if you start earning more money, you can perhaps allow yourself to spend more.

The problem is the expectations that people have of life. Your parents have a big house so you deserve one as well. You're having a baby, so you need a 3 bedroom house and a yard, otherwise that's baby torture! All your friends are buying new cars so naturally you need one too, right?

If you're earning below median income, I'm willing to cut you some slack, but I think for most people on HN, that is not the case.

The salary of your first job can hold down your income for a decade, you might not even realize how underpaid you are.

Why is that?

Here's some relatively easy exercises (just arithmetic and basic excel):

1.) Export your last 12/24/48 months of bank transactions (money in, money out) and calculate how much money you spent in that period, and how much money you made in that period. Is it positive or negative?

Tip: If you have a row of + and - entries, you can just sum up the entire column for a quick idea. Still ,it's good to break it down by period, maybe you had a rough year that offsets the others.

If positive: You're making money. This is good, but it's still a good idea to find out how much of your money goes to what. Try grouping your expenses (negatives) per year into things you have to pay (rent, medical etc) and things you don't (restaurants, pubs, gadgets).

If negative: Urgently figure out what's making you bleed the most money. Group your expenses into detailed categories and figure out what you spend the most money on.

"Grouping" is as easy as copying and pasting into different parts of the document. As you start grouping, you'll encounter new expenses that you can't fit into a category, so you can create a new one and improve your overall categorization.

Sure, this takes time, and some patience. But you can definitely do it if you just sit down and spend an hour or so.

Also, remember that while income is important, what makes your poor is your expenses. I would argue that most people in financial trouble can almost ignore their incomes and focus solely on picking apart their expenses, because like my friend's grandma once said: it's not the large income that makes you rich, it's the small expense. Also, most people kind of know their expenses, because they're so much simpler. Expenses are usually complex.

Many of my friends are like this, especially the ones I lived with: they come to you and ask how much money they owe you thinking that you’ve got this magical ability to count money while it just doesn’t fit in their head that I actually did spend my (considerable amount of) time on doing the maths (including learning how to do the maths).

My parents from Lithuania know exactly how to go around relevant tax law in the country (and everyone they know also know how to do that). They know that because they earn so little that it actually makes a huge difference. And to make it clear I come from a background where having any sorts of education is rare so it’s not like they are privileged enough to know it.

This is a good example of a statistic where the average is meaningless if you don't also know the median.

Also, which specific statistic are you referring to?

Now there's a reason the savings rate is high in China: there is practically no social safety net, and borrowing for school or housing is not common I believe. But my point is that we in the west could save more if we tried, it's just that in our culture we feel like, or we're pressured to, spend. To keep up with the Joneses, or because we feel we deserve certain things, maybe the same standard of living as our parents etc.