My Dirty, Little, Money-Saving Secret(s)

A few months ago I decided to treat myself to a shopping trip. Well, treat is the wrong word. I don’t really like shopping, but I had recently evaluated my wardrobe and found it quite lacking in professional clothing. A good friend of mine, lets call her H, with the same fondness for blazers agreed to come along. We armed ourselves with a list of sales, our student IDs (because J.Crew gives a student discounts) and some well-constructed walking shoes.

H had a job interview coming up and needed to find a professional outfit and a new pair of dress pants. We pulled a few options and she went to try them on. “Oh, I really like these,” I heard her say behind the well-worn dressing room curtain. She strutted out wearing a pair of black slacks and did a few twirls in front of the full-length mirror. Nodding her approval, stepped back behind the curtain, changed back into her boring jeans headed to the cashier, ego-boosting-pants in hand.

“Wait, I need to check the tags,” she said as we got ready to pay up.

“Why?” I inquired.

“Because, if they’re dry clean only I don’t want them,” she informed me.

H had a valid point. Even if she felt like a superstar in those pants, they would ultimately cost her more than she was willing to pay for a pair of pants. Luckily, they were machine washable, but the cute silky top she found got the axe. Dry cleaning a shirt in NYC costs about $4.50. If she dry cleaned it once a month it would cost her $54 a year, more than the original price of the shirt.

IMG_1716(I only wear the finest materials available.)

My friend’s reluctance to invest in a piece of dry clean only clothing got me thinking what other little actions we can take in our daily lives to cut costs. Shopping is an easy one for me. I’m blessed with a natural disdain for the whole process and frequently wear hand-me-downs.Not retro-chic thrift store clothes that make me a New York Fashionista, hand-me-downs.

My first year in New York I got lucky and my roommate’s co-worker frequently purged her closet full of exclusively high-end label clothes. Not only did I get free clothing, the leftovers could get taken to a variety of second-hand shops that buy clothing.

IMG_2074(Why yes, that whole outfit is a hand-me-down.  What a sharp eye you have! The blazer is indeed Banana Republic. No, I don’t care that it’s last season.)

Besides my pillaging of people’s discarded clothing, here are some of my top penny-pinching ideas:

  • Brown bag lunch
  • Buy food in bulk and cook large meals for the week
 (get a slow cooker)
  • Cut cable (invest in a Roku or another streaming media player)
  • Evaluate transportation costs – take public transit if it’s an option or carpool if it isn’t
  • Contain cost of utilities – Our electric bill just came in the mail today, we owe $32.87 TOTAL. #humblebrag
  • Get a roommate or consider living at home – see how much you could save staying at home with the “Get Rich Living with Your Parents” calculator.
  • Buy off brand (for certain products ie: cleaning products).
  • Shop the sales
  • 
Cut the gym – Unless you’re a hardcore gym rat stop getting suckered by those rates. Instead, run outside or do an exercise video on your TV via your streaming media player. Girl Meets Debt offers a great post about the horrors of gym memberships.
  • Don’t buy a coffee or tea.

I understand, some days you just want to go get a $5 grande caramel macchiato. But figure this, you can save $2 on an iced latte if you order an espresso shot on ice in a grande cup and then add your own milk.


IMG_1318
IMG_1254

(I get it. My name is really tough.)

If you frequent Starbucks and the idea of spending between $10 – $20 a week on overpriced beverages isn’t enough to deter you then please sign up for a rewards card! They used to do free soy or flavor shots. Apparently they need the extra 50 cents these days. At least they’ll send you the occasional free drink coupon. Find out more details here.

IMG_0142 (RE: above comment – I’m allowed to mock. I worked there too.)

Hand-me-downs and adding your own milk aside, there are some great deals out there. Sign up for Groupon, Living Social or deals in your area (ie: New York Deals). Finally, in true millennial fashion, I advise you download Scoutmob or any other region specific deals app.

IMG_1717(A free app that saves you money! Can’t beat it.)

Follow the journey on Twitter @BrokeMillennial or subscribe for emails about new posts. Email feedback or topic requests to brokemillennials@gmail.com.

The One Where Someone Else’s Dad Teaches Me About Money*

This post was included in the Carnival of Personal Finance #404. Check out all the other great articles included here!

Per special request a series of posts will deal with practical budgeting. I’m not claiming my way is the right way, or the best way, for you to deal with your money. I’m simply offering the #BrokeMillennial budgeting/saving system.

On Monday I sat in the airport waiting for my flight back to New York when my phone buzzed with a text message from my Dad reading, “I will put $20 in your account when we get home. Take a cab home or save it.”

Since my departure from the nest my Dad will spring these delightful financial presents upon me in an effort to get me to treat myself. After much deliberation, and even calling my boyfriend for his advice on the situation, I saved the $20 bucks and used my monthly metrocard I’d already paid for to take the bus home. Besides, I need a haircut this week so thanks Dad!

Treat Yo Self meme(This is me…well…never. Just kidding, I am still planning on the aforementioned haircut.)

Financial planners, fellow personal finance bloggers and possibly your parents all push the importance of saving money. Many of us have heard that we need to save at least 10 percent of every paycheck and have three months worth of living expenses stashed in an emergency fund. It’s a financial philosophy so deeply rooted in our society it has pervaded into mainstream media. The first time I heard about saving ten percent was from none other than Jack Geller, Monica’s dad on the show “Friends.”

Monica: Um, yeah, so uh, uhh, listen, I’m sorry I didn’t tell you this before but umm, I,     I’m no longer at my job, I, I had to leave it.

    Mrs. Geller: Why?

    Monica: Because they made me.

    Mrs. Geller: You were fired? What’re you gonna do?
    
    Mr. Geller: Judy, Judy, relax, this is our little harmonica we’re talking about. We taught     her well. Ten percent of your paycheck, where does it go?

    MONICA and Ross: In the bank.

    Mr. Geller: There you go. So she dips into her savings, that’s what it’s there for. She’s     gonna be fine..Aren’t you sweetie?

jack geller collage(Because one picture of Jack Geller just wasn’t enough.)

Needless to say, Monica hadn’t saved ten percent of her paycheck and had a rough time financially, for a few episodes. Life’s hard when living in a rent-controlled apartment in a trendy neighborhood with a bedroom bigger than most Manhattan apartments. Okay, rant over.

Monica's bedroom(There is a nightstand on each side of her bed! Who in Manhattan has enough space for a king bed that isn’t touching all four walls of the bedroom?!)

While it’s great to wax-poetic about the need to save, it’s hard for many millennials to grasp the idea of squirreling away funds when most of us are already scrimping. Unfortunately, I’m not going to empathize, I’m in camp Jack Geller. The time to save is when you’re making money, any money.

The notion of putting ten percent aside may seem daunting when you’re barely making enough to pay for rent and food. So don’t focus on saving ten percent, instead focus on saving ten dollars from each paycheck (unless $10 is 10% of your paycheck…then perhaps save less).

Sure, if you save ten dollars each paycheck you won’t amass that ideal emergency savings fund, but you will be in the habit of saving. It’s the habit that is most important. Reason being, when you get a higher paying job putting money aside will be an instinct and you can start to actually put aside ten percent of each paycheck. There are even ways to do this automatically (more on those in future posts)!

Being a saver is a mindset. Some people are raised or wired that way while others constantly battle the impulse to splurge. But if you don’t want to end up like Monica then live within your means, start saving and don’t be this guy (watch until minute 3:09).

the routine(Do yourself a favor and watch the routine.)

*Previously the title read: The Importance of Scrimping when Saving. People apparently don’t find that as catchy.

Stayed tuned for future posts about how this millennial deals with budgets and savings. During the interim, follow the journey on Twitter @BrokeMillennial or subscribe for emails about new posts. Feel free to email feedback or topic requests to brokemillennials@gmail.com.

Dealing with the B-word

Per special request a series of posts will deal with practical budgeting. I’m not claiming my way is the right way, or the best way, for you to deal with your money. I’m simply offering the #BrokeMillennial budgeting system.

Other children of the 90s might remember the glorious time when clogs were fashionable for everyone, not just Dutch milkmaids, and before crocs existed. In 1996 clogs were quite the trend at St. Michael’s Catholic school in Gastonia, North Carolina. Every time I would see all the trendy 8th graders (aka the oldest girls in school) wearing those comfortable clogs my saddle shoes would feel so restrictive. My second grade self became determined to own a pair of clogs.

saddle shoes(Yeah, I was rocking those before Cole Hann made them trendy. This version is available at Payless!)

My mother, an always practical woman, knew that I would outgrow those clogs or the fashion would end within minutes of buying them for me. Instead of giving into my incessant pleading she made a one-sided deal with me. I could have the clogs, if I bought them with my own money.  Luckily, I was still sitting pretty on some money from my Krispy Kreme donut sales and had recently started to branch out into the cat-sitting business.

Armed with $15, I headed to the local Payless and made the first big purchase of my life.  I loved my $13.85 navy clogs with cork bottoms and I wore them proudly, every day for two weeks. Then St. Michaels banned clogs because they somehow clashed with our school uniform. Regardless, it remains a pivotal financial and budgeting milestone for me.

Denim-Cloth-Clogs_1776712B(My $15 did actually buy a full pair.)

***
Few things seem to bother people more than dealing with a budget. Who enjoys them you ask? Let’s call them accountants, accountants and me.

If it weren’t for my intense aversion to non-financial math and the horror stories about tax season, accounting probably would have been my calling. More than once my first roommate would walk into the apartment and find me gleeful pounding away on a TI-83 calculator and furiously writing numbers in my money notebook. The number crunching always proved, yes, I was still quite poor. Even so, I enjoyed knowing just how much money I did, or more realistically didn’t, have to spend.

A plethora of systems exist to help people deal with their money. Previously, I’ve discussed the envelope system of budgeting and explained where I made budget cuts when I first moved to New York (spoiler alert: it was food). Today, I don’t particularly endorse either but they fit at the time.

My goal of budgeting is simple: spend less than I make. For the sake of this post, I claim to earn $2,300 a month after taxes (this is a fictional number).

For those readers who remember my financial origin story it should come as no surprise that my budget focuses on saving. Future posts will discuss the importance of saving at least a little bit every paycheck, putting money aside for retirement and dealing with student loans and other forms of debt.

Before you can start saving, or paying off debt, you have to be able to survive your day-to-day expenses. As a 23-year-old living in New York City with no dependents, my expenses will vary drastically from people with children, joint-incomes, still living at home and various other factors. Please keep that in mind when reading my outline.

There are two types of budgets I focus on, weekly and monthly. I’m not neurotic enough to crunch numbers daily, but I have an idea each week how much I’ll need. If I’m traveling, going out for a friend’s birthday, entertaining visitors or a myriad of other situations, I mentally prepare to scale back expenses the week prior or after.

My weekly budget mostly deals with how much I can afford to spend on food and entertainment. Each month I budget $300 for food, because it only costs about $50 each week for my groceries and I add extra for dinners or drinks with friends.

My set monthly expenses are:

  • Transportation (NYCpublic transit) – $112 monthly pass
  • Laundry – $21
  • Toiletries (shampoo, conditioner, soap, toilet paper, etc) – around $10
  • Utilities (heat and electricity) – ranges from $30-$55 because my roommate and I      don’t use AC in the summer and we only have lights on in rooms we’re using.
  • Hulu Plus – $7.99 (We cut cable and went with a Roku box instead.)
  • Phone bill – $70
  • Food – $300
  •  Rent – $950

For a grand total of $1455.99, more than 50% of my monthly earnings.

roku(I highly recommend cutting cable and switching to a Roku device to save a few bucks.)

Working under the assumption that I earn $2,300 a month I then have $844.01 each month to allocate towards other expenses and savings. Realistically, each month brings a new hidden expense that aren’t factored into the monthly budget. For example, needing items dry cleaned, buying birthday or holiday presents, taking trips to visit friends or entertaining guests.

For those of you interested in starting to budget your money I encourage you to take the first step by writing down all your monthly expenses and subtracting it from your monthly earned income (after taxes). Once you have an understanding just how much money you actually have after expenses it becomes easier to know where to allocate your funds be it savings, paying off debt or a shopping spree.

Stayed tuned for future posts about how this millennial deals with budgets. During the interim, follow the journey on Twitter @BrokeMillennial or subscribe for emails about new posts. Feel free to email feedback or topic requests to brokemillennials@gmail.com.

Brown-bagging It Since ’94

Kids in elementary school cafeterias all over the world are immediately divided into two groups: lunch buyers and lunch bringers. I was a lunch bringer and boy did I rock those homemade lunches. No Lunchables or processed snacks for this girl. It also took me an embarrassingly long time to realize that a reusable cold compress is for sports injuries and not specifically made to keep your lunch cold.
cold_compressEven when I eyeballed the kids with Lunchables and candy bars I knew my lunches were certainly made with love. My mom even would dye my food and milk on holidays: pink for Valentine’s Day and green for St. Patrick’s Day.

make-green-beer

(Years later I would find this reminiscent of my childhood lunches. Yay for being Irish.)

Buying school lunch was a treat in my house. At the start of each month the administration at my parochial school sent home the cafeteria menu. My sister and I would get to pick two days a month to buy lunch (hello pizza Friday).

Feb_Lunch_Menu000113(The real, current lunch menu from my elementary Catholic school. I see they’ve done away with pizza Fridays.)

It’s been 18 years since I first took lunch to school but the mentality still sticks. Except, now I am the one making my lunches and missing the days of green milk.

The Case for Packing Your Own Lunch (with math):

Healthy homemade lunches keep a waistline slim and a wallet fat. By my calculations, I spend approximately $50 a week on groceries for meals (breakfast, lunch and dinner) equating to $200 a month.

If I bought a $7 lunch each workday that would cost $140 a month, nearly three-quarters of my overall grocery money. Granted, my monthly grocery bill would be slightly reduced if I consistently bought lunch during work.

Hypothetically let’s say buying lunch reduced my grocery bill by $10 a week. That’s still $160 per month on groceries. $160 + the $140 lunch bill = $300. That is $100 more a month than I spend buying groceries to make all my meals. On a larger scale, buying lunch could cost me $1,200 a year.

Brown-bagging it aside, there are few small tricks I use to help save money each month.

#BrokeMillennial’s (current) Money Saving Tips:

  • If you’re unwilling to drink water from the tap then invest in a Britta filter over bottled water. The Britta filter has a larger upfront fee but it’s cheaper in the long run.
  • Reuse ziploc bags (big ones and sandwich ones). Wash those sandwich baggies, dry them and save a couple bucks when you pack your lunch.
  • Make your own coffee/tea in the morning.
  • Buy machine washable clothing to avoid dry cleaning bills (or buy Febreze).
  • Like reading or renting DVDs? Get a library card.
  • Unplug electrical appliances that aren’t in use.
  • Never be above hand-me-downs (well maybe one day?)
  • Buy a slow cooker and make big meals for the week.
  • Cut cable.

When doing those just think, “it’s nice when my wallet looks like this at the end of the week.”

IMG_3117(Or with 20s, 50s or a crisp Benjamin)

For daily bits of wit and financial advice follow the journey on Twitter @BrokeMillennial.

Bonnie: Why I Hate Cats And Love Saving Money

After my lesson in start up costs, I decided the next business venture shouldn’t require seed money from my father. Unfortunately, there are limited options for a seven year old striking out into the business world. After a few failed attempts at friendship bracelets and paint-by-numbers sales I had a break through in the pet sitting business.

Our next-door neighbors had a cat named Bonnie. Bonnie embodied evil. She would lurk behind the couch near the door. When I stepped over the threshold she’d propel herself towards me hissing and swiping the air with her claws. For five dollars a day I braved the possibility of death by satanic cat and diligently cleaned her kitty litter and put out fresh food and water each morning and evening.

mean cat(What I saw)

CatSwipe(What was probably happening)

Needless to say, I still am not a fan of cats and would much rather rough house with a German Shepard.

puppies3                      (Yes, I deliberately juxtaposed an adorable puppy photo with the evil cats.)

The money from taking care of Bonnie went right into my childhood savings fund, a candy tin hidden in my closet. Perhaps the threat of my money being taken created the need to hide it (years later I was devastated to learn about taxes). I filled up that tin can with dreams of buying my first car, a red Mitsubishi Eclipse.

eclipse

(No, this did not end up being my first car.)

The dreams of buying a car at 16 died when my family moved overseas and getting a driver’s license was impractical and improbable for a young gaijin. Instead, the pet sitting empire expanded.

Those early years of pet-sitting taught me how to earn my own money and more importantly to save it. With no living costs, except entertainment, I could bank most of my earnings and routinely would save up for large purchases or just save “for the future.”

A decade after my tussles with Bonnie, on the eve of my departure to college*, my father gave me a book called The Rules of Money by Richard Templar. Rule 27 read, “Start Saving Young (or Teach Your Kids This One If It’s Too Late For You).”

Mr. Templar suggested coming up with a “figure” to save from each paycheck. He wrote that he personally put aside 50 percent. Not to be outdone by the man, I put aside 50 percent of all my paychecks in college in order to create a “nest egg” for my post-college adventures. I dreamed of a going to Australia for a year or back-packing through Europe for a few months.

In reality, neither of those happened, but I did end up needing a savings cushion. My first “real world” job brought me to New York City, the United States’ most expensive city to live in. A land that requires 50% of my current paychecks to pay rent. But my first “real job” paid about $200 bucks a week. An amount that didn’t even cover a month’s worth of rent. More on that to come.

Saving your money from a young age is one of the greatest financial lessons to learn. I don’t, however, recommend saving it in a candy tin, even if you are eight. As my father says, “Compound interest can be your best friend or your worst enemy.” More to come on that too.

* Ironically enough, my college mascot was “The Bonnies.” Political correctness forced the University to change from the original mascot, the Brown Indians.

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