Money, money, money, money...money!

I am broke. I’m making so little money that in response to my reporting my income my loan company recently sent me an updated payment plan…of $0 per month while I make my current salary. Like I said, broke. This isn’t new to me: I was broke in Boston (three jobs, 80 hours a week didn’t help the incredibly high cost of living); broke in Southern California (thank you AmeriCorps for putting a roof over my head but that was about it); and broke now while I do the AmeriCorps year #2.

But, while very broke, I’m doing it. I live on my own (well, me plus three roommates) in a house close to the hotspots of my city. I go out with friends often and my clothing is still stylish enough to hit up the town night or day (no need to hide in the dark). More importantly, I am credit card debt free and put money into savings regularly. I do have school loans although nothing I can’t handle and the Eli Segal Education Award, a large benefit for AmeriCorps members, will help those out a lot next year.

I will credit much of my financial success to my parents. My dad is so good with money he’s made a very successful career out of it. My mom is the most frugal person I know and is intentional about every penny she spends. She’s a master clearance shopper and has that amazing thrift store/garage sale eye where she can find incredible buys just about anywhere. Their financial genius was instilled in all of my siblings but I will say that I think I have a knack for money stuff on my own as well and I’ve done well being poor for a long time.

I think the biggest tip I can pass on for those of us struggling with or even just worrying about money is to be smart with it. Even when you stop struggling, it’s still important to be smart with money. Just because you suddenly have a normal paying job doesn’t mean you have to spend that money. Moderation is key to all aspects of life, especially money. Keep saving regularly, put a certain percentage (20 – 30) of your income directly into your savings account and once it’s in there, never touch it. If you make extra money here and there, consider sticking it in your savings. There is nothing wrong with saving too much.

Stay away from credit cards unless you have a really good handle on them. Credit card fees are the most annoying and evil things ever. $35 late fees, $20 service fees, annual fees, they’ll get you anywhere they can. The best way to avoid that is to avoid the card all together. If you’re not good at paying off your balance on time and monthly, I suggest using the card for only one thing in order to establish credit without being tempted to go crazy. Example: use it only for gas. Pay off the $50 - $100 monthly and add to you’re your credit score but don’t let it get so out of control that you end up not paying off the $500 and adding $50 + in fees.

As I said, live moderately. Just because you have money doesn’t need it must be spent. If you want to go out with friends and eat/drink out, do it. Just not every night. If you enjoy having lunch with your coworkers or happy hour after work, do it. Just not daily. Drive a nice car, but make sure it’s in your price range. Buy that adorable Anthropologie dress, but don’t go in there weekly. Don’t stop looking for bargins, drink specials, used items just because you’re not poor anymore. It’s a great way to live and in the end, it’ll help you save for what really matters: kids, a home, an amazing trip to Europe, or even your retirement.

At the same time, even if you don’t have a ton of money, don’t make yourself miserable. Go to happy hour, just limit your beverages. Buy a pair of jeans to replace your worn out ones, just don’t buy anything else. Have your morning coffee, from home and not Starbucks (this has saved me hundreds). And don’t feel bad if you can’t contribute significantly to your savings. Anything is better than nothing and even nothing for a little while is okay too.

Here are some resources and money tips I thought I’d pass on:
Housing: find a roommate, or several. Rent is a great place to save money. If you’re a new couple and struggling, have someone move in for 6-months to a year. It can be an adjustment but can help tremendously with rent while you get on your feet.
Lunch: make lunch for the whole week. You can save so much money if you don’t eat out at lunch. I knew a guy who spent $10-15 a day on lunch. That’s $50 - $75 a week, just for lunch! You can probably make sandwiches and have fruit on the side for $10 - $15 for the whole week!
Happy Hour: want a great way to be social and have a glass or two of wine after a hard day’s work? Look for local specials and jump on them! I know several wine bars in the KC area that have half off bottles on Sunday nights; it’s a great way to save!
Community Dinners: set up a way for you and a couple friends to do weekly dinners where you take turns cooking. Planned the right way, you can pay for one nice dinner a month and get three free!
Gym: Target has some great workout dvds for cheap and there are often community yoga or gym glasses that you can pay for per session. Much cheaper than a gym membership that you won’t use. Or, find a gym that has free classes and make the most of them!

Some links:
Ten Biggest Money Wasters: it’s really easy to save little bits of money by not being lazy or not buying into things.
Public Service Loan Forgiveness: work for a nonprofit? Have a ton of school debt? Check this out!
AmeriCorps: While it pays poorly, it has the Eli Segal Education Award that helps pay off school debt or helps you go back to school. It’s a great way to serve for a year as well!
Mint: a great way to securely manage your money and really see how much you’re spending and where.

I’d love feedback from my readers of other ways to save money: I know you’re out there…some of you ride the bus, got rid of a cell phone, garden, don’t buy new clothing, etc. Share your ideas/suggestions!