In general, when I share reader questions, I try to keep them as broad as possible. I get a lot of requests for advice about specific situations, but I try to steer those to the Get Rich Slowly discussion forum. I like for the questions on the blog to be relevant to a lot of readers.
Here’s a small exception. Christine wrote for help with her specific circumstances. She’s a twenty-something student overwhelmed by her finances. Her concerns are representative of many e-mails I receive.
I am an avid reader of your blog and have been trying to follow your advice but can’t get any of it to stick to my personal situation.
I am twenty-four years old, working a full-time job earning around $33K annually and attending college part-time a couple evenings a week. I’m single, no kids or roommates. My main problem is my fixed expenses are just too high and I cannot dump them anytime in the future.
- My rent is $595/month (including all utilities & internet).
- My car payment is $200/month and insurance costs me another $220/month (the cheapest I could find).
- My cell phone is $100/month.
- I pay an additional $200 in debt payments to my grandfather for a loan for school.
I’m enslaved to contracts for each one of those fixed expenses. I am barely making ends meet currently, and have taken drastic steps to save money, but I never have enough to last till payday. Furthermore, I graduate college next year and have taken out a few student loans, which will have to be repaid.
Because I don’t have time for another part-time job between working 9-5 and going to school in the evening, I’ve been exploring alternative methods of increasing income (babysitting, etsy, selling unused things). While these afford me minor relief, they are few and far between and I cannot really rely on them. I’ve also been avidly using coupons, which helps, but I honestly don’t buy that much of anything to make a difference.
A lot of the advice I read on saving money involves economies of scale and planning fun nights at home. What do you do when that doesn’t apply? How can I manage to have a fulfilling twenty-something life while managing my finances? I am lost, please help.
Christine is experience the pain of pinched cash flow — her expenses are too high and her income is too low. (Going back to Monday’s discussion of the balanced money formula, Christine’s needs are too high, cramping the other aspects of her financial life.)
In David Copperfield, Mr. Micawber astutely describes the thin line between joy and despair: “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
When I was in debt and living paycheck-to-paycheck, I was perpetually $50 or $100 behind. It felt like I was drowning. But once I managed to lift my income over my expenses, even by just a small amount, I felt like I could breathe again. I believe that this is what Christine needs to do, too. But how?
- When her contract is up, Christine should ditch the cell phone. Find a cheaper alternative. If possible, live without a telephone at all. That’s $100/month in savings right there. (From my own experience, $100/month can be huge.)
- Depending on her relationship with her grandfather, Christine could ask if he’s willing to temporarily accept reduced payments: $100 or $150 per month.
- Though I don’t know her circumstances, $220/month for car insurance seems astronomical. She should shop around again, but she should also look at her current coverage to see if there are ways to cut costs. (Here are 10 expert tips for saving on car insurance.)
These steps (and others like them) will increase Christine’s cash flow, which should make a huge difference. However, it’s important for her to maintain any surplus she generates, and not just to sink it into other expenses. Christine is locked into contracts, and it may be a while before she’s able to improve her cash flow significantly, but I believe this is where she needs to start.
Do you have any advice for Christine? Do you have any suggestions for her current situation? Any general recommendations for twenty-somethings who might find themselves in similar circumstances? How did you cope with these sorts of problems when you were just getting started in life?
Update: Christine added a comment answering a few questions, including additional expenses. Your encouragement has already helped her drop her insurance to $116/month! Also, I’ve marked a couple great comments in the thread. I especially like this comment from Jonathan.
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220 a month for car insurance seems about right to me, if you’re driving a car that you’re still making payments on. I was paying 245 for a long time. Eventually I got on a family insurance plan with my mother, and that knocked my payments down to under 100 a month. I couldn’t believe it. We also get our home owners and insurance together, which saves us money. She might look into getting renters insurance with her car insurance to see if they give her a discount big enough to make up for the extra expense of the renters insurance. Renters insurance is a nice thing to have, and it only cost me about 30 bucks a month back when I was a renter, four months ago. You never know what kind of disaster could come up in your house, and she sounds like one small disaster away from financial ruin.
I feel her pain, I make a little more than her, but my expenses are higher since I’m a home owner and I have a child. I also have a lot of medical debt. I too live paycheck to paycheck. My work screwed up my pay last period, and it just about ruined me financially. Luckily, my mortgage lender took pity on me and allowed me an extra two weeks to make my mortgage. If they hadn’t done that, it would have been the beginning of a downward spiral that I don’t know if I could have pulled myself out of.
My advice to Christine is to hang in there and maybe shop around for a higher paying job. In this economy, she’d be lucky to find one, but she definitely won’t find one if she doesn’t look. When she graduates, it will be easier to find a better job, or to get a second job. In any case, there are some times in life when you just have to focus on surviving. My prayers will be with her!
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Depends on the definition of “fulfilling twenty-something life.”
For one month, list every time you spend $1 or more. Carry paper and pen and do this. No exceptions.
That way you can track where your money is going. You can also decide if it is worth it.
For example, if you meet up with your friends for dinner and drinks every Saturday night (which is not unreasonable), skip Starbucks in the morning (buy an espresso machine, it will pay for itself in a month), pack a lunch every day.
Choose the best places to spend money.
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I think these have all been suggested, but here goes:
1.) Sell the car and use public transportation, if possible. My daughter, a college student, does this. She found she could afford a car, but not the insurance, gas and upkeep!
2.) Sell the car, get a used car. This will also lower your insurance.
3.) Insurance is way too high. I am sure there is a much better deal out there.
4.) Move back home for awhile, if possible. (I know, my daughter won’t do this either, and she actually likes us.)
5.) Lower your minutes on your phone.
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An idea for getting out of the cell phone contract with out paying the cancelation fee is to use a site like http://www.cellswapper.com/ to find someone to take over your contract. We were able to find someone to take over our contract and phone freeing us up switch providers and to get a cheaper plan.
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A quick comment on the job front: it definitely can’t hurt to ask for a raise. That said, knowing that you’re renting a one-bedroom apartment by yourself, presumably in a safe area, for under $600 month utilities included leads me to believe that you’re not living in an area where the average starting salary is $50K. So… $33K may be perfectly reasonable for the industry you’re currently working in, and the location you’re in.
Be aware of what the industry standards are and take that into account when it comes to making a reasonable request for a raise. As a manager, nothing makes me more nuts than when I’ve pushed hard to get a decent or even above-average salary for someone, only to have them express obvious disappointment because it wasn’t as much as they had hoped–or to push for a 10-15% raise when (a) they’re already earning within $1K of what someone with five years more experience is making and (b) average raises in our industry are more like 4-5%.
It may be that to earn the kind of money you think you should be earning, you’ll have to look for a different job, in a different industry. It’s better to figure that out now, rather than after you’ve devoted 10 years to making a career doing something that will never pay up to your long-term expectations.
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If you do the math, this is a much less sympathetic posting. You should have over $1000 a month left to cover everything else and save! Stop expecting to live like an indulgent yuppie, and your problems should go away. Stop trying to keep up with your friends, stop shopping as a hobby, stop eating out mindlessly, etc. And, like others have already said, get a cheaper cell phone plan as soon as you can, save up $1000 and buy a junker car after you sell your car that has a payment, and get a roommate or a studio apartment if you’re currently in a one-bedroom.
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I have to echo the sentiments of several of the other twenty-something commenters here. Me AND my partner live on a total income of 21k. Frankly, I felt a little insulted and hurt to see Christine’s situation here because I recognized that so many people here are living on much less, including supporting partners or children. Christine is absolutely lucky to be making that much money, paying such a low rent, and still living by herself. Something else is going on here. Where is all that other money going? I would be thrilled to have an extra $200-$700 a month to spend.
33k is rich. We only have the rent we have because my husband-to-be’s parents are renting us this house. When we payed almost $200 more at an apartment, we lived on more like 18k, and we still had money for luxuries. Right now we’re spending money like mad paying for a wedding and we’re STILL making ends meet and being happy.
Long story short, I think avoiding personal stories was a good policy, unless you’re going to grill the submitter for details about all of her spending habits in the future. Otherwise, you are portraying yourself as unknowledgeable about the topic because you’re not pointing out that Christine’s income is enviable to most people her age and breaking down her nonessential expenses.
You want a fulfilling twenty-something life? Go play board games or walk in the park. Volunteer at a local organization. Dance in the rain. Read a book. Meet your friends at a coffeehouse or another public place and just get a glass of water instead of always getting coffee. Make dinner at home and invite people over for a potluck. Visit your parents or siblings often. Go to free/sponsored events and take in the local culture (there’s always a free concert in the park, Saturday Market, etc. etc.) Learn a new, inexpensive hobby and join a group for that hobby.
The options are endless, and far more fulfilling than buying yourself ten new outfits, a cup of coffee everyday, lunch at the local restaurant three times a week, or going clubbing. Trust me.
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Everyone suggesting selling her current car and buying a beater: could be OK advice, but it really depends on what car she has now and what kind of a beater she could get.
I recently sold my old, paid-for beater, bought a new car with a car loan, and lowered my monthly average cost of car operation by around $200. Seriously. And yes, that’s after considering the increased insurance and registration.
Why? My beater was a mid-90s Jetta, a car not exactly known for its long-term reliability. The last 8 months I owned it I averaged over $500 a month in repairs. Seriously. And I sold it as a fixer-upper with another grand or so of repairs needed. I kept telling myself that it had to be cheaper to fix it than to take on a car payment — right up until I did the math on my repair bills.
If you do go the beater route, look for a Toyota or a Honda and really pay attention to the condition the car’s in. Selling your new car for a beater won’t save you much if your maintenance costs are more than your car payment was.
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Hi Christine,
Thanks for the followup – it sounds like you have your head on straight, but maybe are attempting too much. I spent most of my 20s in debt, and it really sucked. When you hit 30 and realize you missed that time to contribute to enhancing the rest of your life, it’s no fun. Yes, I didn’t want to miss out on living life in the moment, but I wasn’t as happy I could be if I had had a better handle on things. I realized I wasn’t really “living it up” like I thought, not with this issue hanging over me.
So I guess the way I see it, you’ve got a couple of options. You can continue your lifestyle as is (it sounds like you’ve freed up about $100/mo now?) and still be ok. I imagine you’ll get a salary bump when you finish school, so at least you can anticipate being able to pay off lingering debts then.
The other option is to continue to cut back. Sell the car, drop the cell phone plan (if you can’t do it with the iphone, go back to your old phone), get a roommate (it is doable in a 1 BR), etc. I was amazed, as I started exploring, what I was actually able to do to get a handle on my finances. I also worked full time and was in school part-time, and also managed to work a second job (if you have time to go out, you have time to work). It is definitely tiring and you have to be committed to it, but I kept reminding myself why I was doing it (and that it was only short term).
Good luck.
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I admit, I haven’t read every single comment, but most are saying the same stuff.. Here’s a little different twist.
Change your mindset. Buy assets and minimize liabilities.
Your education is your greatest asset. Make sure what you are investing in is worthwhile, though. Don’t spend 100K on a vocation that will get you 40K in the market. Once you graduate with a worthwhile degree, change jobs. You are now worth more than you were prior to graduating. Get paid what you are worth!
Cars are one of the biggest money suckers out there. If you bought new or are leasing that means you probably have to pay for comp and collision. I recommend finding a nice used car that you can PAY FOR and get only liability coverage. Nice cars are extremely overrated. Buy a nice car when you can pay cash for it.
Coupons and all that other stuff are ok, but they are peanuts when you look at the big picture.
Again: Invest wisely in your greatest asset (you and your education), get paid what you are worth, and minimize your biggest money sucking liability (your car)…. Been there, done that.. JMHO.
Good luck!~
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as someone who is supporting myself and my full time student spouse on under $20k after health insurance and taxes, I AM SO WITH CHRISTINA. i wouldn’t go so far as to say i’m insulted, but i rolled my eyes.
my original comment on this post was in line with thinking this was not the worst situation ever. this 20something wants to live a little, but can’t afford to right now. it’s very common, and part of your 20s is learning to live with what you have and finding fulfillment elsewhere.
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I’m curious about what you might be selling on Etsy. I’m 48 and have been seriously crafting for over 30 years and I know the crafters rarely, if ever, make a profit on the cost of materials plus their time. Hate to be a downer, but your time making crafts to sell might be better invested elsewhere. Now, if you’re doing it for love and fun, that’s different.
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Lay off of Christine. She came asking for help and advice. For those of you who can support two people (let alone kids) on 20-30k, I applaud you. You have learned how to really squeeze every penny. For those of us still learning, back off. Thank you for the advice, but please leave your claws at the door.
Regarding the “33k is rich” comment:
Interestingly, in 1990 dollars 33k was above average; by today’s standards, 33k is below average.
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
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I would suggest that you ask your family, friends and co-workers if they see any areas where you can cut back your expenses. Often, we become so accustomed to a certain way of spending that we aren’t able to see the “luxuries” that we indulge ourselves in. The people who know you best may be better able to comment on your expenses than strangers on a website (although the advice here has been great!). Good luck and keep your chin up!
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Christine you may want to check out Frugal Trenches blog, she went through a simular experience (she lives in London, one insanly expensive city). unfortunatly she just got debt free so you’d have to read it from the beginning but I highly recomend it
http://notesfromthefrugaltrenches.com/no-spending-days/
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I am 23 and married. My husband is in graduate school and we have a combined income of about $25,000/yr. Thankfully, he has a TA that pays for his school and our parents paid for our undergraduate degrees, so we don’t have any debt. I recognize that not having that debt is a huge blessing that many people don’t have. However, we have still learned to live on a little. Here’s a few suggestions:
1. Try to do some freelance work. This has been great for both my husband and me. (He does web design, and I edit.) Since we don’t have much experience, we charge less than most freelancers, but we still make more than we would in a traditional “part-time” job (like retail or food service). Plus, you can work on your own schedule and at odd hours. I’m not sure what skills you have, but you’d be surprised what people need. Try to make some connections through the college you attend, if possible. Also check out DoMyStuff.com.
2. As far as asking for a raise goes, I think if you feel comfortable doing that, go for it. However, I would love to be making $33K, so that might already be a good salary for your field. Several people have suggested finding a higher-paying job or quitting school if your degree won’t help you earn more. I strongly disagree. If you love your job and love what you’re studying, stick with it. Having a job you love is so much more important than making tons of money. I don’t know what your situation is, but if you’re someone like me who chose a field that doesn’t have a great financial outlook (English), don’t worry. I think living on less but doing what I like has been well worth it.
3. Start a pricebook for your groceries. After I make a shopping trip, I sit down with the receipt and log the date and price of every item. Before, I would go to the store and have no idea whether an item was a good price or not. Now I have a record of the lowest price I have paid, and I don’t buy the item if it’s above that price. I’ve saved about $75 a month shopping this way.
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33K is not a bad salary at all. I heard that 50% of the full-time U.S. working force earns less than $20K a year. I am a 30 year old college graduate earning 32K a year. I am single with a mortgage and no roommates to help me out. I usually have some money left over each month to save or invest. I was also able to pay back student loans. The cell phone bill and car insurance payments were really hurting her. I pay about $12 a month for prepaid cell phone service and $60 for car insurance. Keeping those two expenses low really makes a difference.
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Anytime the insurance costs is more than 20% the actual cost of the product (other than life & medical insurance ofcourse)itself, it’s time to rethink the product. If Christine can move closer to her place of work (and study), it would save her $440 rightaway. Moving to a newer place (even with a higher rent) might offset her heavy transportation cost. Second place where she can cut her costs is her cell phone. $100 for a cell phone is pretty steep . Here’s my 2 cents for Christine:
1) Ditch the 2007 car. Move closer to your work/school. If you cannot ditch the car, get a cheap student car. Buy only the bare essential insurance for the student car.
2) Please rethink the iphone. It might be new and shiny, but you are paying atleast $600 more than a regular cell phone per year.
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Please don’t listen to the advice to find a “partner,” whatever that means. The best way to secure your financial future is in a legal marriage. Don’t let uncool people tell you “prince charming’s not coming.” Pairing off is as natural as breathing. Slap on some lipstick and start looking for stable committment oriented men.
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Downsize the car, call Geico and when you turn 25 ask for a better rate.
My cell bill: unlimited text 75 bucks w/tax. I run a business with no land line. Unknown number or before 8pm? Voice mail is your friend.
Renegotiate with grandpa. Rethink college. Can you cut a class or switch majors?
Ask yourself: Who owes you money and what can you sell? Checks in the mail? Any purchases you can return?
Take 10% of all cash flow and put it aside. If you come up short on rent-only then then dip into your 10%. Whatever is leftover or untouched put in an ING account. As time goes on you wont access your 10%.
Last resort: A temporary room mate even if they sleep on the floor. Tell them you want $400 to $600 up front for a few months.
Agreed w/Beth #135: Shacking up to save money is a bad idea even if you had kids.
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Auto Insurance :
$200 per month for Insurance is huge amount of money to pay. I drive new Acura TSX and I pay $430 for 6 months.
Couple of my friends who purchased new car and was shopping for insurance and they had less than 1 year of driving history and insurance companies like Geico, Progressive, All State quoted $1300+ for 6 months.
Workaround they found was much effective – they spoke to an insurance agent, and he suggested them to take Renters Insurance ($5 to $10) month and take auto insurance with same provider. That got their 6 months premium to less than $500 + renters insurance due to multi-policy discount.
They got that deal through Safeco and Travelers Insurance providers.
I’m not sure having more down payment will make your insurance go higher. Haven’t heard about that before.
iPhone:
when you finding it difficult to make ends meet, I would ask myself do I need to pay $100 for cell phone with data plan? why not cancel the data plan and use just the voice plan till you save and you already have Internet connection.
Call AT&T and ask if you can get employee discount or student discount. I know they provide upto 22% employee discount.
Room Rent:
Instead of paying $595, see if you can find another apartment with 2bed/2bath for $700 to $900 and share the costs or if you are comfortable, you can share you current apartment too.
Good Luck.
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You’re spending too much. And there’s lots of advice above on reducing it. But you need better money management skills in general, and this is a great time in your life to figure it out – you’re young, make good money, and don’t have big family obligations that limit your options.
1. Column 1: How much are you really bringing home every month (don’t tell us — tell yourself, and write it down on a piece of paper).
2. Column 2: What are your absolutely critical expenses? Legally binding things that you can’t, shouldn’t, or it’s expensive to get out of. You need a place to live, need to eat, need to pay your Grandpa, etc. If you’re really making $33K per year, the expenses you list are less than that.
That should give you a good sense of whether your expenses are really out of line with your income. It would be good if you DON’T like this answer, because it would be good to learn to make changes to your living standards now. You’re not in big financial trouble, but when you’re older, your financial commitments will be more and it will be still more scary to deal with. Tackle the challenge now. Cheaper housing situation (i.e. roommates), eliminate the car, reduce the cell phone, etc.
It would be good to know what you really spend. For a couple of months, track every penny. Coffee… Bagels… You need to know if you’re spending more than you want to. As people have said, you could afford to be in school making far less. It’s easier now to do school than when you’re working 70-hour weeks making $100K a year. Enjoy it while you can, without wasting money and time on things that don’t really matter to you.
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Volunteer. This is what saved me when I was feeling broke and lonely. I met great, passionate people who shared my interests. I had a good time and it was all on fairly easy low commitment, mostly low skilled stuff.
I’ve exchanged my time for gym memberships, language, music & cooking lessons, club memberships, meals & drinks, movie passes, concerts, t shirts, trips and so much more.
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There have been some great ideas given here and I glad that Christine has already been able to reduce her monthly car insurance and cell phone expenses.
Here is a different suggestion that may may seem counter-intuitive. GIVE.
The obvious problem is cash flow and Christine has stated that she doesn’t have time for a second job. Given her question, “How can I manage to have a fulfilling twenty-something life while managing my finances?” the underlying issue is that of being fulfilled and contented.
So while she may not be able to give financially, I would suggest volunteering (even if it is just a few hours a month) in an area about which she is passionate. That might be a women’s shelter, a soup kitchen, the local Humane Society, or a local religious organization.
My point is that in volunteering you can help someone who is in more need than yourself and gain some perspective on your own situation.
A possible side benefit that may occur would be some additional networking that could create an open door with respect to her career.
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Since everyone’s been over and over the car insurance issue, I’ll skip over that. As far as the phone goes, it’s a tad unrealistic (not impossible, just damn hard,) to live w/o a phone at all. I’d recommend either Skype or Lingo (latter is the same as Vonage, just 20% cheaper,) for long, chatty calls, and keeping a little prepaid phone for those “Hey, how are ya; be there in 15 mins” type of updates. Between the two, that shouldn’t be any more than $30/mo.
Also, in order to get more cash in a hurry to put towards the debt, start shopping for toiletries and other basics at the local dollar store. Soaps, lotions, razors, moisturizers, toilet paper, you name it–if I can get it there, I do. That should free up a lot of little “hidden expenses” that pop up from time to time.
Third, start using Mint.com to track your expenses; it’s free, and it automatically tracks what you buy, so you can see just how much those lattes/bagels/whatever are costing you lately, and it makes a good overview tool for when you need to see what you can cut back on.
Good luck!
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1. Sell the iPhone on Ebay and cancel cell service
2. Get a land-line and a $15.00 answering machine
3. Sell the car and ride the bus (borrow the difference if you have to)
4. Make a budget and stick to it
It can be done! You just have to be willing to make hard, probably unpopular decisions now.
A little advice from a guy who has a few years on you…
Pay your grandfather back immediately. I don’t know the details of your situation entirely, but borrowed money from an older family member eats a hole in your soul.
Imagine if he were to pass away without getting to see you make good on the debt. It’s not about the money, it’s about self-respect.
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It is so interesting what a satisfying lifestyle has evolved into. When I was in my 20′s (I’m 45), if you had your own place, and could afford a few beers after work, it was considered satisfying. Expensive vacations, fancy cars, etc were all aspired to, but not considered necessary for happiness.
My first recommendation would be to think about her future budget. Starting with income, and then subtracting out necessities. Note that internet isn’t a necessity, nor are cell phones or cars in many places. The prior suggestions are all good, but it is important to re-focus away from how can I get everything I want. And to re-focus on what can I afford, and what are the choices that I have to make.
If you don’t, you will always find yourself in a bind, wanting just a little bit more than you can afford.
On the bright side, saving and investment can be just as rewarding as spending. You are so young, you can start now with very small investments.
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Christine, kudos to you for asking for help and for putting yourself out there like this.
Good luck in the future.
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Hi Christine:
You actually seem to be doing ok, but I understand how stressful a tight money situation can be. I just read through all the tips, and everyone said the same thing, so here are some others things you might look into:
1) You said you use your car for work. Make sure you are either getting reimbursed for mileage, or keeping track so that you can deduct it from your taxes. The current standard reimbursement rate is $0.585 per mile (per the IRS). Along the same lines, if you are using your phone for work purposes, see if they will reimburse you for some of that as well.
2) If you need nice clothes for work – things that have to be drycleaned – don’t send to the drycleaners everytime. Use the Dryel sheets for the dryer, or to be even cheaper, use a dryer sheet and a damp washcloth.
3) Compromise…eat at home most of the time, so that when you do go out it’s a treat. I lived off of pasta, veggie chili and red beans & rice through college (and actually, I still eat like that most of the time now).
I can understand your need to have a fulfilling youth. I’m only in my late 20′s, but married with a toddler, and wish I had spent more time socializing when I had the time to do it. Just remember that you don’t have to spend money to have fun!
Good luck!
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Drop the cell phone. Use Skype. it’s free telephone service by using your existing internet. You just need the program and the headphone & speaker set which cost little less than 50 dollars. You will never ever pay phone bills.
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Is it just me, or does it seem like it’s mostly men that are suggesting to get rid of the cell phone? Sorry, but I think it’s a smart idea for women to have a cell phone for emergencies — especially if they drive alone at night. I have the cheapest prepaid plan there is (about $11). If I need help in an emergency, a free computer phone account isn’t going to do me a lot of good, now is it?
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I think relying on a Skype account as your only phone is a big mistake if you’re a women who lives alone and drives alone. (Men don’t seem to pay as much attention to safety — we women have to).
If you have problems on the road, or spot a drunk driver, a computer phone isn’t going to do you any good. If you think you’re in danger, or you need to call an ambulance, there’s no way that getting to your computer and placing the call is going to be as fast as picking up the phone and dialing 911.
That being said, I think Skype’s a great alternative to paying long distance fees.
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@Beth: A cell phone plan isn’t required if all you need the phone for is “emergencies”. Get a cheap (under $20) phone off of eBay, and keep it charged. Any and all cell phones whether they on a plan or not are able to call 911.
Or, if your car breaks down in the middle of the night, you could do what people did before cell phones were invented – walk to the nearest gas station, late-night coffee shop, or ring somebody’s doorbell and ask to use their phone.
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George, if my city was as safe as it was decades ago (before cell phones were invented) then I’d feel perfectly safe walking alone at night. I’d also feel safer if I was a six foot tall, two hundred pound male… Or if there actually was a late night coffee shop on every corner or a house nearby, and I never had to drive on a back road or a highway.
Since none of these things is going to happen, I make room in my budget for my bare minimum prepaid phone. Saving $10 a month isn’t worth risking my health and safety. I don’t advise ditching the cell phone altogether as a cost cutting measure when there are other things that can be cut from the budget instead. (like a couple of cups a coffee a week).
I know you don’t need a phone on a plan to call 911. But you do need a plan (even a tiny pre-paid one) to call a tow truck or a friend. (I wouldn’t call 911 for a flat tire, but you can bet I would call someone for assistance).
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George, I’m not sure which Beth you were addressing, but I for one am sticking by my original point. I could make a call to 911 if I didn’t have any minutes on my phone, but what if I just need a tow truck or someone to pull me out of a ditch? (hey, winter is coming!)
I don’t think was I clear in my original post, but I was also getting at the point that having only a computer phone is a dangerous idea. If you don’t have a land line, than a cell’s important!
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Sorry for the late comment. I was in a similar position a few years ago. As a young woman, I would never get rid of my cell phone. It helps me feel safe. You could go to a prepaid plan like my mom has, where she only pays a dollar each day that she uses the phone (she has it through AT&T).
I would try to cut rent expenses. I was able to rent a 3-bedroom house in an expensive area with two other girls and I only paid $400 per month. You could look on your college campus for ads from people looking for a housemate. Alternatively, you could look for people with rooms to rent (sometimes these are over a garage and so more private). Those people probably charge less than you’re currently paying.
Hang in there! Good for you for finishing college. It might be a tough few years, but you’ll get those loans paid off. Often, you can consolidate with Sallie Mae and end up paying only $50/month on your loans.
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My junior year of college, I decided I was sick of spending so much money on books. The cost of used books sold at my school’s bookstore was still relatively high. After some trial and error I found some ways to save hundreds of dollars. Even with a few mistakes I managed to save over $200.
- If it’s not provided on your syllabus go to your college’s book store and write down all the ISBN numbers for the required books. You can usually find this on the back cover.
- Log onto Amazon.com, Half.com, textbooks.com, abebooks.com and search for the best deal on the book that you need. Be careful to find one that’s still in good condition.
- Ask your professor if you really need the most recent edition of a book. I took a business law class where the professor said it was ok to use an older edition. The only difference for me was the page numbers were slightly off.
- Use your library. I used to work at the library, so if they had the book I needed I’d check it out to myself for as long as I needed it. If you don’t have a friend that works at the library, you can always renew.
- Sell any books you don’t need. I sold my textbooks on Amazon, because I could get more money than my college would give me.
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Here’s a few things to consider:
1 Insurance
Switching car insurance may not always be cheaper. I’m currently paying almost $1400 every 6 months ($233/mo) for insurance, but thats for both my car and my wife’s. I looked for cheaper insurance the other day online and the cheapest I could find would save me about $150 a year. Not worth switching! However, one reason I think it might be so low is that my renters’ insurance and personal property insurance for my wife’s engagement ring are with the same company, giving me discounts. If you don’t have renters’ insurance, buy some. You’ll save on your car insurance, and you’ll save if you apartment burns down!
A guy I work with told me that when he picked up life insurance from his company, his total payment went down due to the discounts he received!
2 Cell phone
You have an iPhone, so you’re paying $30+ a month for Internet access. I know it’s cool (I have a blackberry through work), but do you really need that when Internet is included in your rent? Paying the $175 early termination fee from AT&T and getting a different plan, saving that $30 a month will more than pay for itself in 6 months.
I have a family talk plan with 450 rollover minutes, 5000 night/weekend minutes and unlimited mobile to mobile minutes (the most total minutes we ever used in an single month was 2500, so 5000 night/weekend minutes would be plenty). It used to be 550 minutes, but I called “to cancel” (see below), and they dropped my plan down saving me $15/mo, but my wife and I both got new (refurbished) phones for free (AT&T was selling them for $9.99) and they waived the $18 activation fee on both lines.
A new cell company in many major metropolitan areas, MetroPCS offers unlimited calls and texting for $40/mo with no contract. You may want to see if they are in your area.
3. All other bills
Call them up, go through the cancelling your account prompts, then tell the person that you really don’t want to cancel but your bill is too high. This is really the way you have to do it: When I called Verizon to try to lower my DSL bill, the regular CSR told me my rate would go from $33 to $31 if I took a year contract. Then I went through the cancelling system and was offered either $20/mo for 6 months or $24/mo for 12 months if I took a contract. Much better!
I did this with TiVo, and the fee ($13.95) was waived for 3 months; I did this with AT&T, and they dropped me to a lower calling plan, saving me about $10 a month. Finally, I did this with Netflix. I was on the 2 at-a-time, unlimited plan for $12/mo. I didn’t want to drop it entirely, but because we don’t use it much right now, I dropped it to the 1 at-a-time plan for $9, which wasn’t on their website.
I should call my electricity company, see if they can do anything, but the bill we just got was half of the previous month’s since we took out our air conditioners!
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I like the specific “ask the readers” idea, but I think before one is chosen, it needs to add up. For example, where is the discretionary spending going (estimates in the comments ranged from about $600-900). That is A LOT.I noticed that when she replied in the comments, she didn’t address that question which several had already asked, so I assume it isn’t being spent on regular needs and she wasn’t able to justify the spending. If readers can account for their expenses and can be helped by the tips, I think its great! I could have used it a couple of years ago. Good luck to her though…its hard. I make just a tad more than her and a couple of years ago I was about $15,000 or more in cc debt, plus a car payment. I’ll be out of debt by this next summer and expect to have close to $8000.00 saved by the end of 2009. I have a healthy emergency account right now. I go out and take small vacations—I am truly doing everything that I want to do and i make just under 40K. I’m just careful about what I do choose to spend my extra money on.
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Christine-
I can completely understand where you are coming from. My best recommendation is to try what I am doing.. taking online classes. It’s been the best decision I’ve ever made. I can now work full-time during the week ~1200/month and part-time on the weekends bartending ~300/weekend. A fast way to doubled income. Better yet, try waitressing on a friday night at the local fish fry and saturday nights for steak night- you’ll not only get a ton of extra cash but you can take home some good food for employee prices. The option of bartending came to me because as a 22 year old who pays for everything herself, bartending is a great way to meet a bunch of new people, people buy you drinks all night and pay you to have fun with them… the more fun you have the more money you make. I know it’s a pain in the behind to work constantly, but you’ll love yourself for making the sacrifice while you’re young and able instead of waiting to get rid of the debt.
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I’m in my 20s and just starting out, so I understand where Christine is coming from. Get a lower plan for the cell phone and get a new insurance policy for the car. When I was shopping around, at first all I could find were $200+/mo. policies. Then Geico offered me a policy for $85/mo. Different insurance companies get their money from different places. It’s just a matter of finding the one who doesn’t get their money from you.
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