Emergency budgeting: For when you’re all out of cash

Having just gone through the process of graduating, moving out of my apartment, getting someone to sublease my apartment and driving back down to Dallas, I find myself with considerably less in my savings account than I typically have. A sudden drop in funds is what happens whenever you go through a life change (heck, happens to me every time I would go on Christmas break). In addition, as soon as I got back, my Dallas friends wanted to go out and spend money on food and drink and good times. Hold your horses, guys. I have to draw up a new budget.

Guidelines for creating your emergency transition budget:

> Keep in mind how long it is going to be until you can get a solid flow of cash coming in again. Now, how much money will you have available to you until then? Check the money in your account and count the days until you have income.

> When you’re in a situation like I am and you’re refusing to return to microwave dinners but you can’t quite afford to buy real dinners yet, buy lunch food type stuff. Buy lunch meat, bread, eggs, fruit, bacon – things that you can make lots of meals out of fairly cheaply. If you buy the right things, you will have enough to create variety in your meals so that you won’t get bored.

> Let your friends know that you can’t go crazy with the spending right now. Tell them that if they want to go out to lunch, then you’ll have to go home for dinner and then meet them after. Tell them that if they want to hit up the mall, you’ll come with them, but you’re just window shopping. Good friends are always supportive of this. Also, see some of my previous posts on how to save money on going out and getting drinks.

> For those of you now living on your own, be very aware of how to save on utilities. I’ve done previous posts on this. I’m not living on my own for the next several months, but I’m already practicing by speeding up my showers and not opening windows when the A/C is on.

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A TED lecture by LearnVest: Five Financial Rules to Live By

Hey guys, I just quick wanted to share with you this awesome lecture by LearnVest CEO Alexa von Tobel.

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She presents five basic financial rules to abide by, no matter your financial situation:

1. Live with a budget

2. Prioritize debt repayment

3. Build and maintain an emergency savings fund

4. Negotiate your salary

5. Start saving for retirement now

I’m sorry that this isn’t much of a post, but I promise, it’s worth your time to read that article and watch the video. Alexa says a lot of the things that I’ve said in my blog, but she ties it all together a lot more nicely. And she also presents some staggering facts about the financial situation that most Americans are in. It is the hope of the author of this blog that my readers will be in the minority of people who choose to not only educate themselves about finance, but use that knowledge to create a healthy financial future for themselves. When it comes to getting smart about money, you can never start too early.

Buying a home: The very basics

Man, it has been a long time. I’m really sorry about the hiatus, everyone, but spring break/school/work/senioritis got the better of me for the past two weeks. But NO MORE! Today, you are going to learn about financing your first home, and you are going to LIKE IT.

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Now, for most people out of college, you plan to rent an apartment or a little house to start out with, and that’s fine. Renting, when you don’t yet have a stable financial situation, is a smart decision. But for those of you who are going to have a much better starting salary than myself (I’m looking at you, engineering grads), buying a house is not implausible.

Just don’t be dumb about it. As my finance teacher would say, you want to avoid being “house rich and cash poor.”

Once you have a full-time job, you can go to the bank, tell them your salary, and they’ll help you calculate your monthly expenses. Once you’ve determined how much of your monthly salary can go to a mortgage payment, they’ll offer you some options. Likely, you’ll make a payment of several hundred dollars every month for the next 30 years to pay off your house, with a certain interest rate.

Now, you also have the option to buy ‘points’, which will get you a lower interest rate. If you stay in your house for a certain amount of time, the points will pay for themselves. Points usually cost a couple thousand dollars (depending on the worth of the house).

As with most things, make sure you get the lowest interest rate that you can, and pay it off as quickly as possible. Down the road, whenever you’re making more money in, say, 10 years or so, you may want to refinance so that you can make larger payments per month in order to pay it off more quickly. Remember, houses cost a LOT of money, so refinancing could potentially save you tens of thousands of dollars.

Do you like the little drawing I did for this post? See the little contented-looking dude next to the house? That could be you, if you’re a smart home buyer.

Man it feels good to be posting again! I’ll see you all again next week!

Selling stuff on Craigslist

Just a heads up, guys – I need to sublease my apartment for the summer. Of course, I haven’t been thinking about it at all lately, because I’ve been super busy as usual. But I’m not too worried, because I use trusty ol’ Craigslist to find potential buyers, and I’ve had a pretty good success rate so far.

For those of you who are unfamiliar or not experienced with Craigslist, I’ll give you a brief synopsis – You post an ad for your city, put it in a category (they have hundreds – from electronics to services to ‘personal’ to auto) and write a description about what you are selling and how much you want for it. Craigslist creates an anonymous email for you, and anyone who wants your stuff can email you and find out where to pick it up – Craigslist doesn’t do deliveries (but it is not recommended that you ever tell anyone your address).

But as useful as Craigslist is for subleasing out my apartment, I haven’t had quite as good luck using it to make money in general. For one thing, I’m only a college student, and most of the possessions I have, I need. I tried to sell a few of my things on Craigslist – an old purse, a blow dryer – and did not make that much money. But I wasn’t being savvy enough. Here are a few tips for you to make money on Craigslist:

> Check out the ‘free’ section on Craigslist. Not everything in there is junk. Most of the ads say something like “Hey, I’m going to stick this old TV out in my yard and the first person to load it into their car gets it.” If it seems like the stuff is probably in good condition (sometimes there are pictures), go grab whatever it is, take it home and clean it up. If it’s old furniture, you may have to put on a fresh coat of paint or even do a little repair, so be ready to get handy. Once it looks good (and works), resell it on Craigslist for a profit.

> If you live in a neighborhood, check out garage sales. There are usually at least a few on weekends with warm weather. You can easily bargain down the price of stuff at garage sales and then take it home and fix it up and put an ad up on Craigslist.

> In general when selling stuff on Craigslist, have an eye-catching headline since that’s the first thing people see. If you’re selling an office chair, be aware that a lot of other people are selling office chairs, too, so put in the headline why yours is superior. (Make sure that you’re telling the truth. Be nice.)

> Always post pictures on your Craigslist ads. People are much more likely to check out and respond to ads with pictures – that way, they know what they’re getting.

> Do you have a hobby where you make stuff? Is the stuff that you make cool? If you are a talented jewelry-maker, sculptor, knitter, etc., you could probably sell the stuff you make for a profit on Craigslist.

And always remember – be aware of scams. Don’t accept money orders or checks for your stuff – cash only.

 

Do I need a credit card?

This semester, I’m taking a finance class, which is proving to be really useful. I’ve never had a credit card myself, and honestly I’m a little afraid of getting one. I’ve heard too many horror stories of college kids going ridiculously into debt because they charged their whole spring break vacation on a credit card and now they can’t pay their bills. According to my finance teacher, over 80 percent of college students currently have a credit card, and roughly 1 in 4 college students is $3,000 or more in credit card debt.

Whether or not you actually need a credit card is an ongoing debate. Some people think that you need one in order to establish credit or to make big purchases such as a house or to finance a car. Other people have them just in case of emergency situations, such as your car breaking down and a tow truck is not within your current budget. There are also the folks that say that you never need to get a credit card – you can build your credit based on whether or not you pay off car, house, and college loans, etc. Whatever camp you are in, chances are that at one point or another in your life, you, your spouse, or your child (oh no) will have a credit card.

My finance teacher seems to think that there are good reasons to have a credit card, such as some of the reasons listed above. But she also drilled it into us that we should not buy meals or vacations with a credit card. Credit cards allow you to live outside of your means for a short time – until the bill comes, and you have to pay it all back and then some. Some people think that they can just spend all of the money that they want on a credit card and then file for bankruptcy and then get off scott-free without having to pay any of it back. WRONG. Any charges made within 20 days of the filing date are charges that you still have to pay off. Also, any personal loans you take out within 40 days of the filing date also have to be paid off.

Did you know that your interest rate on your credit card can be increased even if you are paying your bill on time? Yup. That happens when you pay back other lenders late. Or, for any reason that the credit card company feels like. Which is why it’s wise to only use credit cards for emergency situations. Just something to keep in mind.

 

College Loans: Crisis around the corner

Hey guys, sorry it has been a while. Anyway, for this post, I decided to focus on something a little more hard-hitting:

Recently, a slew of new statistics has come to light about the increasingly staggering college debt that is weighing on the majority of college grads. The Bureau of Labor Statistics says that college tuition is increasing at a much faster rate than average income. Available grants and scholarships can’t keep up with the demand, either. States, strapped for cash, are cutting the amount of money that they give to institutions of higher learning, and as a result, colleges are leaning on students even more to foot the bill. And as a result, the number of college grads defaulting on their loans has increased considerably, according to the U.S. Department of Education. The National Association of Consumer Bankruptcy Attorneys even hypothesizes that college debt could bring about the next economic crisis – and they aren’t the only ones.

So what can you do to make sure that you can put your college loans behind you and have the money to buy a car and a house? There isn’t an easy, presto-my-debt-is-gone solution. You have to pay your college loans back, even if you go bankrupt. And do NOT default on your college loans. Seriously.

Here are a few tips so that you can be smart about paying them back and put them behind you as quickly as possible:

> If you have federal loans, awesome. Don’t try and pay those back using private lenders because federal loans generally have more reasonable interest rates.

> The faster you pay back your loans, the better. Finance 101: If you pay back your loans in smaller increments over a longer period of time, you’re going to end up paying much more in interest overall. We’re talking thousands of dollars more.

> If you can, sign up for more scholarships now!!!

> Make sure, when asking for a grant or a loan, be careful with your calculations and only request as much as you actually need. If you can, try to cover the cost of food, transportation, and maybe even housing by getting a part time job.

> If you’re nearing the end of your college career (like me), and you aren’t sure exactly how much you will be paying back, get that information now, including what your interest rates are going to be. You may have several different interest rates.

Accounting for new expenses

I knew that this would happen. I knew that as soon as I had figured out approximately how much money I could expect to save this semester – to start paying college loans, or for an apartment, or something important like that – something unexpected would come up. I only have my own clumsiness to blame. I dropped my phone into some water, and this time, it didn’t recover. So, since I had to buy a new phone, I decided it was time to join the rest of modern society and get myself a smart phone. I paid for the phone myself ($100), and now I have to add a data plan to my monthly expenses ($30/month) plus insurance for the phone ($10/month). Sure, I consider the convenience of a smart phone to be worth it, but then they had to cut hours at one of my jobs. So now, I’m getting less work hours (and less money) than I did before. And I have even more to pay for.

Tightening your belt is never a pleasant experience.

So, what do you do when you fall into the kind of situation that I am in right now? First, re-budget. Figure out how much less money you will be making, and determine where you can most afford to make the sacrifice. Can you afford to party less? Can you afford to use your car less often and save on gas? Can you sacrifice name-brand peanut butter and orange juice?

Pick up extra work shifts. If you had one of your shifts cut, just think of it now as a shift that you can move around to other times, depending on the needs of your fellow employees. Be the generous person who people can count on to pick up the slack. Don’t ignore those emails.

Don’t owe people things. I know that since you’re running low on cash, you have the urge to turn to your friends for help in your time of need. You might say “Hey, I’ll get you later.” But promises like that are just going to dig you into a hole. If you really need your friends to help you out, offer to repay them by helping them with their homework or with their chores. Or offer to be their wing(wo)man sometime.

Lastly, always make sure that you have money saved for instances such as this. Maybe you aren’t graduating soon, but you should still put money into a savings account regularly. Because no matter who you are, inconvenience is bound to happen, and you always have to spend more than you expect.

 

Cheap cooking from a seasoned “expert”

I’m still new to this whole cooking-on-a-daily-basis thing, so I got someone who actually does cook daily to send me a few recipes for me to publish. (FULL DISCLOSURE: This person is my boyfriend.) Not to mention, he manages to cook cheaply, but still doesn’t skimp on flavor. I plan to cook several of these recipes next week, so our resident “expert cook” knows that if these recipes are faulty in any way, I will find out, and he will pay to the full extent of girlfriend-law.

He has also included his own annotations on how much you can expect to spend per meal on these:

Oatmeal

– ½ cup water

– ½ cup milk

– ½ cup oatmeal

– pinch of salt

– 2 tsp brown sugar

– sliced banana

1. Heat water and milk on stove on medium heat until just under boiling

2. Mix in oatmeal, salt, brown sugar and banana

3. Cook until desired consistency, stirring occasionally

I bought a 30-serving container of oatmeal for $3.50, and bananas are $0.44 a pound, which usually comes out to about $1 for a week’s worth. Everything else you’ll probably have around anyway (substitute more water for milk if you need). That’s less than $0.30 a day for breakfast!

If you get bored of bananas, mix some other fruit in, or some maple syrup.

BBQ Sausage Potato

– 1 potato

– 1-2 sausage links, sliced

– ¼ onion, chopped

– bbq sauce

– butter, cheese, sour cream to taste

1. Preheat oven to 400

2. Poke holes in potato and bake at for 1 hour 15 minutes

3. When potato has about 15 minutes left, start heating sausage and onions stovetop

4. Cook sausage, flipping occasionally until brown on both sides

5. When potato is ready, slice and mix in fixings, top with sausage and bbq sauce

Potatoes are $0.88 a pound, so depending on size they’ll run you between about $0.50 and $0.75 each. I buy sausage that a local bbq joint makes (they sell it at the grocery store) and can get enough for three potatoes for $7.00. Counting in the cost of whatever fixings you’re going to use, each meal will run you less than $4.00, and if you buy a big enough potato, it can make a big dinner.

Chicken Soup …Stuff…

– chicken meat (I prefer boneless/skinless thighs)

– 1 can cream of chicken soup

– 1/3 cup flour

– 1/3 cup milk

– 1 egg

– seasonings (I like black pepper, salt, garlic)

– ¼ cup rice

1. Preheat oven to 375

2. Heat olive oil in a pan over medium heat

3. Begin boiling water for rice (1/2 cup)

4. Mix milk and egg in a shallow bowl, and flour and seasonings on a plate

5. When oil is hot, dip chicken in milk mixture, then seasonings, then lay in oil

6. Cook each side of chicken for one minute or so, until breading is browned

7. Remove chicken and place in greased oven pan

8. Pour cream of chicken soup over top of chicken and cover pan with foil

9. Bake chicken for 45 minutes or until there is no pink when cutting through the thickest part of the meat

10. When water is boiling, stir in rice and turn heat down to a simmer, cover

11. Everything should be ready at about the same time – serve the chicken and gravy over the rice

A pack of chicken runs around $5-6, the soup costs about $1.50, so counting that and a portion of the various seasonings and rice, this recipe should cost you no more than $8.00, and makes 2-3 meals. You can always make more rice if you want to stretch it farther, just remember to use a 2:1 water to rice ratio.

To make BBQ chicken on the oven, simply replace the cream of chicken soup with BBQ sauce and add a little red pepper to your seasoning mix.

“I remember this being really good when I was little” style macaroni and cheese with a side of broccoli

– 1 box macaroni and cheese

– 2 hot dogs

– broccoli

– salt

– red pepper

1. Cut up the broccoli and put it in a pan with the seasonings and a little water, place over low heat and cover

2. Cook the macaroni and cheese following the instructions on the box; you will need milk and butter (I typically use ½ the amount of butter called for)

3. At the same time, cook the hot dogs, you can do this stove top or in a toaster oven

4. When the macaroni and cheese is ready, slice the hot dogs into bite size pieces and stir them in

5. The broccoli will be ready after about 20 minutes

I’m not too sure how much everything in this one will cost, but not more than a couple dollars. You can skip the broccoli if you want as well, I just use it to add something healthy to this, and to make it a full two meals – usually dinner and lunch the following day.

Baked Sweet Potato Snacks
– 1 sweet potato
– brown sugar
– cinnamon
– cayanne pepper

1. Preheat oven to 400
2. Cut sweet potato into thin slices and lay out on greased baking sheet
3. Sprinkle with brown sugar, cinnamon, and just a pinch of cayanne pepper
4. Bake until crispy on edges, let cool and enjoy

Sweet potatos are around $1.00 a pound, and you get a lot out of each one, so this is a good cheap snack a

We all hate paying utilities

…because they’re unpredictable. In my case, they should be predictable, because utilities is “included” in the rent that I pay every month. Except that if my roommates and I have used too much heat or electricity or air conditioning, they charge us anyway. And that is really unexpected, not to mention unwelcome.

But there are ways you can save big bucks on paying utilities every month, and they’re a good thing to remember, because they’re something you have to pay for your whole life (and think how much more AWESOME it’s going to be when you’re paying to heat up an entire house instead of just a little apartment). So always remember to:

> Turn down your thermostat. Super obvious, super simple. But when you have roomies who like to keep it toasty, and you all have to pay utilities equally, it gets to the point where you may have to sit them down and tell them to stop turning up the heat and start wearing a snuggie if it’s such a big deal. You can save roughly 3 percent on your heating bill for every degree that you lower your thermostat. And keeping it cold when no one is in the apartment is going to help you save a lot.

> Make sure your heating vents aren’t covered by rugs, furniture, or any other junk. It keeps the heat from circulating properly, which means that you may mistakenly keep turning up the heat when you could have just shifted your bathroom rug.

> If there are cracks near your window or doors that need covering, get your landlord to caulk them over so heat doesn’t escape through those cracks.

> Get curtains for your living room. They actually help trap heat inside the house so that the heater doesn’t have to work so hard.

> Worried about electricity adding to your expenses? Turn off lights and TVs when you leave a room. But aside from the obvious, you can also unplug appliances and things that you aren’t using. Keeping your phone charger, toaster, hair straightener and other things plugged in while not in use can add around 10 percent to your energy use.