Surviving on a 20-pound Bag of Rice Due to Budget Cuts

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So here I was, in New York City at 22-years-old barely making enough money to keep a roof over my head and put food in my mouth. Luckily, I can be a pretty resourceful person, please remember the hoarding of hotel toiletries, and found ways to feed myself for little to no money.

Many of my formative years were spent in Asia which influenced a lot about me, including dietary habits. A bowl of Japanese sticky white rice is my soul food so I came to New York armed with a rice cooker, pillaged from my parent’s basement of course.

IMG_3112(Still my pride and joy.)

Fortunately, the local grocery store (Trade Fair) catered to the diverse neighborhood I found myself living in. For those who haven’t been in a New York City grocery store, it’s quite an experience. Aisles are barely wide enough to fit a small grocery cart and two standard size humans can barely fit side-by-side, it’s almost enough to make you run screaming for the suburbs. For those of us who dislike being touched, particularly by strangers, it’s a nightmare.

Packed subway(Subways are also a treat. Clearly he agrees.)
Photo credit to Jessie Jay

Bracing myself, I entered the store and after anxiously hunting, finally found my holy grail: a bag of rice. She was a beauty, all 20 pounds of her. The $12 price tag threw me for a loop because I had only budgeted for $30 of grocery spending money. The idea of spending nearly half my budget on just rice caused me to break out in the kind of cold sweat only a financial problem can induce. After several minutes of mentally debating the purchase, and majorly clogging up the aisle for all other standard sized humans, I threw the sack over my shoulder and headed for checkout.

Army(Trade Fair is still my Vietnam.)

It was an excellent purchase that I proceeded to survive off of for many months while my finances continued to take a beating.

IMG_3110(There she is.)

In addition to eating copious amounts of rice (don’t worry I usually added eggs or veggies) I also became something of a scavenger. As a babysitter, cupboards of children’s snacks were at my disposal, even if they were mostly the organic cardboard tasting kind of snacks that Manhattan parents are partial to.

In page life we were fed pizza on Thursdays during double-show tapings. There were usually leftovers and, after the first week, I wised up and started bringing zip-loc bags with me.

Cold Pizza(I wish I could say it looked more appetizing than this.)

The real haul came from my barista job. Not only I would get free beverages at work, but I could also take home “expired” food when I closed up shop. Needless to say, I enjoyed closing. Sure it was mostly scones, microwaveable breakfast wraps and the occasional bistro box, but free food just tastes so good. With all three of my jobs being of the moving-around variety I didn’t have to worry about packing on the pounds from cake-pops and pumpkin loafs.

Starbucks-NYC-Other-Food(Yes, I have sampled all the above products.)

My rice and scavenging days taught me a lot about how to budget money and gave me an appreciation for a meal with decent nutritional value.

The term budget causes some people undue stress. For me, it’s empowering. It’s important to understand how much money you earn after expenses and then figure out where to allocate your remaining funds.

For many millennials, standard expenses include rent, utilities, cell phone bill, transportation, food and student loans. In New York my expenses averaged out to$1,174 a month, before food. Even though food is obviously an important category it was where I could scrimp because I scavenged elsewhere.

Some financial experts recommend writing down every penny you spend throughout the day to keep track of your spending habits and learn where cuts can be made. It’s great advice but often disregarded after a day or so. Others recommend just understanding your financial parameters and living within them so you can begin to save and invest.

Money Journal 2

(Be sure to include the price of your new notebooks and pens.)

I’m partial to the latter, live within your means. If you earn $2,000 a month then don’t spend more than $2,000 a month, including all your expenses. Sounds simple, but if you aren’t paying attention to your finances all those dinners out, Starbucks coffees and drinks at the bar add up, fast.

Bonus: My favorite recent blog post about budgeting can be found here (Budgeting: the no budget approach) from Reach Financial Independence.

Why hiding your funds under a mattress makes you lose money (and not because it was stolen)

In June of 2011, three weeks after college graduation, I packed two bags and boarded a plane to New York City. I had landed a job working as a page for an iconic late night talk-show host. A fun, rewarding job but certainly not a well-paying.

Even though I came prepared to be broke…

IMG_3092(Yeah, I ferreted away hotel shampoos and soaps in preparation to be too broke to clean myself.)

…the cost of New York City living shocked me.

Everything I budgeted for seemed to be hundreds of dollars off. My measly paycheck of $200 a week (thanks taxes) didn’t even cover monthly rent. The time to “hustle” had arrived.

Like many millennials I turned to Craigslist. Those ads were terrifying. What did people want to do with my feet?! For the record, “Talent” rarely means credible acting gigs.

craigslist-new-york-city-classifieds-for-jobs-apartments-personals-for-sale-services-community-and-events_1250476179720After losing a lot of faith in humanity, I started applying to babysitting gigs (not on Craigslist) and also got a job working for the world’s largest coffee chain. Being able to make barista-level drinks sure looks good on a resume.

starbucks_getty--525x400(Green is a good color on me.)

Babysitting/nannying is the mainstay of struggling artists, students and financially-destitute New Yorkers. We endure spoiled kids, leering fathers and emotionally-distant mothers for the opportunity to walkaway with cash at the end of the night. Some families are great, but sadly many Manhattan parents should be forced to take parental aptitude tests before procreating. The Nanny Diaries are pathetically accurate.

ScarlettJohanssonsdenimshorts(Check out the Nanny Diaries trailer here for context. Oh, and nanny cams are a real thing.)

However, babysitting (and tips from Starbucks) resulted in quick cash-in-hand. Cash that went right into envelopes. Four envelopes to be precise.

IMG_3104Shortly after getting my influx of cash, I developed the “envelope system.” The envelopes represented different expenses in my life. The cash I earned was divided into:

  • 50% – Rent
  • 25% – Money for Anna (Anna was my roommate and the utilities were all in her name so I’d just pay her in cash when the bills came.)
  • 25% – Savings

IMG_3101(It’s always important to have money goals. I wanted to have saved $500 by May and set aside $50 each month in order to achieve my goal.)

The “fun times” envelope only got love on nights I received a tip from babysitting, or earned more than anticipated. That envelope usually was found wanting.

The methodology behind the envelope system is great, allocate money to the appropriate causes and then save some. The practice is really, really dumb.

For one, I usually had hundreds of dollars “hidden” in my room just begging to be stolen. Second, all that money in my room wasn’t doing anything for me. Money in the bank earns interest (also commonly referred to as compound interest). Money under the mattress just sits there.

money-under-mattress(Nope, not where I hid my money! I’m far too clever for that.)

When you’re ready to diversify your financial portfolio (or start one), IRAs, bonds or CDs (certificates of deposit — insert lame pun about music here) are excellent ways to invest money for long-term gain. IRAs and bonds will be addressed in the future. For now, I’ll break down putting your money in a CD.

Unlike the stock market, CDs are a low-risk way to save money. The interest rates are higher than those of a regular savings account and they are protected by the same insurance as other bank accounts. By choosing a bank backed by The Federal Deposit Insurance Corporation (FDIC), you are guaranteed to get at least a portion of your assets back in case the bank goes under. Typically around $100,000. One reason it’s important not to have all your money in one place.

bank-run-wonderful-life(Points if you know the movie and reference.)

The first step of purchasing a CD is to have a designated amount of cash that you won’t need to access. This money should be separate from any sort of emergency cash fund, because once you put funds in a CD there are early withdrawal fees. CDs have various maturity dates: 6-months, one-year, five years, etc. Once the date hits then you can withdraw funds in full.

The second step is to investigate the best CD for you. Banks vary on the cost of early-withdrawal fees. They also vary on the rate of interest and annual percentage yield (or APY). APY is the rate of return you will earn each year and it accounts for compound interest, making it different from APR (annual percentage return) which does not account for compound interest.

Don’t strain your brain, let this fun, online calculator do the math for you.

If you’re a broke millennial like me, I understand wanting to put off investing until later. However, the earlier you start investing the bigger your return when you’re pushing retirement age. If you want to be a millionaire, now is the time to start.

millionaireusa                                     (All about the timely pop culture references)

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