Most of us struggle with some psychological aspect of money that can impede our savings. Whether it be the lure of clothing stores, nights out with friends, or stocking a top-shelf liquor cabinet, there tends to be one thing or another that creeps from our wants category into our needs. I've never been a compulsive shopper and always preferred voluntary simplicity, both in the kitchen and in my closet. This means that for most of my young adult life, I had good control of my finances.
Then I Started Dating…
Dating quickly made gift giving my Achilles heel. As with other debt-inducing habits, it seemed harmless at first. Here are some things I started doing, not realizing how much money I was shelling out:
- I never liked to show up at my girlfriend's apartment empty handed so I always had her favorite Snapple or a magazine for her in hand. (Six bucks, just to say hello.)
- I always wanted to pick up the check, even when we were out with a friend or two. (Could be upwards of $100, just to show I cared.)
- I brought expensive bottles of wine to dinner parties, not to show off, but just to enjoy with everyone, even if I was just as happy with $7 bottle myself. ($25 to try to find community.)
- I was sent to the store to get simple baking supplies, but instead of getting the normal vanilla extract, I would get the fancy packaged one for twice the price. Take that philosophy down the entire list of supplies and I'd racked up a pretty hefty bill. ($50 extra just so we could feel high society together.)
It was never about seeming rich to my friends or girlfriend. I took pride in my penny pinching in every other aspect of my life. I honestly thought it was about generosity and showing affection, nothing more. Continue reading...
Prom dresses have started to appear in the windows of downtown department stores, signaling that in the next few months, another crop of seniors will be heading off to college. By now, the ones on their game have kept the grades up, participated in extra-curricular activities, researched the value of a college education and the best-value colleges, applied for scholarships, and found a good deal on housing.
Still, a whole new world of financial responsibility awaits them. I thought I'd share some of the best (and worst) financial decisions I made as an undergrad.
Find a good place to put your money.
One of the first things I did was join a local credit union, instead of one the big banks that setup tables on campus and offered free checking accounts, t-shirts, and laundry bags that read “off to a clean start.” By joining a credit union, I avoided overdraft fees. (One of the big banks handed out a card to new customers that said “sh*t happens.” It was a get-out-of-jail-free card for your first overdraft fee.)
It was always my dream to be paid to travel. I thought I'd write guidebooks or be a tour guide. A few years ago, my wanderlust was acting up again, so I crunched some numbers, adding up the cost of living where I was (New York) versus traveling for month. With some careful planning, I spent a month in Paris and ended up with more money than when I left.
The cost of staying in one place
I'm sure most of us know our monthly expenditures. Rent, utilities, Internet, cable, Netflix, gym membership, gas, cellphone, and the list goes on. Granted, all of us have different interests and different monthly expenditures, but there's usually a basic bottom line for all of us. I thought if I could zero that out, then a month away would become more of a reality. Living in New York made it easy to sublet my apartment for a one-month stint. I raised my rent price a couple hundred dollars to cover my utilities, Internet, and cable. I put my Netflix and gym memberships on hold, and at the time, pay-as-you-go was all the rage so my cellphone had no contract. My car stayed parked out back and my gas expense dropped to zero. My monthly expenses dropped from around $1,500 to nothing at all.
I knew I wanted to be centrally located in Paris, but didn't need much more. On Craigslist I found a lot of graduate and doctorate students who had to travel for their dissertations. They were looking to rent out their apartments for cheap, real cheap, just so their rent wouldn't be a total loss. Not only that, most everyone I talked to was willing to negotiate. I ended up with a small room on the top floor of the building (the former maid's room) for â‚¬150 a month, less than a fourth of my rent back home. The student was traveling to Africa and was happy to have someone to watch his cat. (If you want to go even cheaper than that, you can try house-sitting. Friends of mine have been paid to stay in beach houses in the Caribbean or mountain homes in Montana. I have yet to do this myself, so I'm curious if any of you have stories.)
Food, and becoming the invited guest
When I travel, everything is new. Yes, five-star restaurants are appealing, but street food gives me the most pleasure. Some of my best meals had been Nutella crepes and crusty baguettes, often for less than â‚¬3. At home, not only was I prone to $8 burritos when I didn't have a chance to make something after work, but I'd also have a small dinner party for friends at least once a month. This often meant having either wine or liquor and cooking for five, a lot pricier than cooking for one.
When abroad, I'm usually the one who's asked to dinner. Through volunteer work, attending free book readings, or helping someone carry groceries down the street, I found myself being the invited guest to at least one dinner party a week, and it was a great way to try some of the traditional French dishes, learn the language, and interact with people. Put yourself out there, learn some niceties, and you might be surprised how willing people are to want to share their culture and open their doors.
In France, they peel apples. When I worked as an au pair, the kids would ask me to peel them. I'd sit there wondering why anyone would ever peel an apple. One morning, I grabbed an apple out of the fridge, took a bite, and the mother said, “Oh, don't you peel it first?” They don't store butter in the fridge, nor eggs, nor milk, before it's opened, as UHT (ultra-heat treatment, which kills spores) milk is the norm. And did I mention they peel apples? We have so many assumptions on the right way to do things, especially with food, based on our society, and of course, our parents. Often, we don't even know they're there.
I heard a story from a couple about how when they first moved in together, their first argument was over condiments. They needed ketchup for the faux chicken nuggets they were eating and the man grabbed a small bowl, poured the ketchup in, and placed it on the table with a spoon to be scooped out. The woman, seeing that the ketchup bottle was not on the table yet, did what her parents always did and placed the bottle on the table. The man was appalled. What, do we live in a zoo? The bottle right on the table?! Realizing it was just cultural conditioning, and it's not like chicken nuggets are haute cuisine in need of proper presentation, he got a good chuckle out of his knee-jerk reaction.
My former roommate and I used to argue about what goes in the fridge and what doesn't. Bread? Potatoes? Butter? I love when our quirks and habits come to light and we question the things we've always done because that's just how you do them. I love it even more when the questioning of those habits saves me money. I've been doing this a lot recently with my fridge and food storage.
My brother, my best friend, and my girlfriend's sister are all getting married in the upcoming year, so I've heard a lot about wedding registries lately, and there seem to be many pros and cons. Personally, one of my least favorite things in life is going to Crate and Barrel, walking around with my scanner gun, and seeing that the only things that fit into my price range are wooden spatulas and the saucers to espresso cups (the cups already purchased). “Congrats on your everlasting love. Here's a steamer basket.” I've always thought there has to be an alternative.
Here are two numbers I found interesting:
- In 2010, 1.5 million engaged couples, or 88% of all couples with pending nuptials, set up a registry, according to the Knot Market Intelligence annual wedding registry survey.
- According to research by the University of Denver, more than 70% of couples getting married are living together before the wedding.
Okay, so 70% of engaged couples are living together, and 88% of engaged couples are registering. According to the survey, more than 90% of registered items are bakeware and kitchen appliances. Here's my question: Those couples that are living together, do they not have spatulas, steamer baskets, and toaster ovens yet? Is their apartment filled with mismatched plates and saucers and an uneven fork-to-spoon ratio? Do they not already blend their own smoothies?
It's Friday night. A few friends and I are debating whether or not to go to the college bars down the street to get a drink when my friend Steve chimes in that his apartment is just up the way, and says, with his chest slightly puffed, “I have a fully stocked liquor cabinet — something for everyone.”
Steve obviously likes to keep his apartment ready for impromptu entertaining. There's ample seating, surround sound, and yes, a bar separate from the kitchen that's almost equal in size. Behind the bar he keeps bottles upon bottles of spirits, all lit from underneath. He puts on some Miles Davis and takes his spot behind the bar.
“What are you having?” he asks me.
Right after we graduated from college, my best friend wanted to buy a real bed. He'd slept on gifted beds, Craigslist-ed beds, found beds, futons, couches, and I even think there was tatami mat in there, but he decided graduating college made him an adult and needed a real, adult bed.
He saved a good amount of money and did research at multiple mattress stores testing for firmness, pocketed coils versus continuous coils, pillow top or memory foam — he tried them all. He finally settled on one that was as adult as a mattress can get. It was a Bonnell coil system king-size mattress with a memory foam pillow top. It had a temperature regulating system to assure neither overheating nor shivering, and he was convinced that this mattress would be the end to his minor-yet-chronic backaches. He waited for a somewhat decent sale, purchased it (with free delivery), and his mattress arrived.
After buying a bed frame that took up most of his Brooklyn apartment, he was ready to live the good life. Continue reading...
A few years back, I got a paycheck in the mail and went to deposit it. I left the bank, dropped off a rent check, bought groceries, a sandwich across the street, gas on the way home, and a new album from iTunes to listen to while cooking.
I forgot to endorse the check. Normally, this is no big deal for my bank. That day, they decided it was. Originally, they cashed the check, the money went through and popped up on my online banking sheet. Then someone else caught the check down the line and didn't like that it wasn't signed. They took the money out of my account, stamped the check to be returned, and sent it back to me for endorsement.
Here's the thing: I didn't have any other money in the bank.
How can you get the most out of the dollars you spend on entertainment? Though it seems counter-intuitive, I've found that with a small investment of time and an understanding of the things I enjoy most, the less I spend on them and the more I enjoy them.
In his popular book Flow: The Psychology of Optimal Experience, Mihaly Csikszentmihalyi, the Hungarian psychology professor and former head of the University of Chicago psychology department, writes that the most happiness comes from being in the flow of activities you love. He describes flow as follows:
I remember when my parents gave me a raise in my allowance. I was seven and I went from $2 a week to $5 a week because I started doing my own laundry and washing my own dishes. I was so excited to be a model employee. I remember that day plotting out just how many extra GI Joes I could buy in a year and how impressive and extensive my collection would be. Then I remember going to the pharmacy down on the main avenue and buying $4 worth of candy instead of $2. My whole GI Joe plan started to disintegrate in a heap of peanut butter cup wrappers.
You know what I remember more vividly? I remember the day my parents stopped giving me an allowance. It was the same year I moved my lemonade stand from Wednesday afternoon to Saturday morning and from the corner of my side-street to right down on that same candy-filled main avenue and saw my revenues rise tenfold.
Lemonade stands are so tired! This young entrepreneur is selling jokes.
From there, I started going around the house finding things that needed to be done, whether it be the deck re-stained or the water damage on the basement ceiling redone and I'd negotiate with my parents fair pay for the task. It usually didn't matter that I had no idea how to replace a bathtub or efficiently organize a closet, there were books in libraries, helpers at local hardware stores, and now, google to offer a quick afternoon of learning. I now had an eye for opportunity and was learning skills that set jobs into motion.