1. Develop Cheap Hobbies
Some of my hobbies are expensive. I'm a skiier, a golfer, and an opera fan. None of these is particularly frugal. However, some of my favorite hobbies are free or cheap: reading, writing, walking, and watching seasons of old TV shows on DVD. Take the time to develop a free habit of your own. I am a huge advocate of developing a daily reading habit. Reading, of all types, expands the mind and enriches the soul. And given the abundance of free books to be had at the local library and online (www.gutenberg.com is a great place to start), all of that knowledge can be yours for free.
2. Utilize Free Days/Hours
Many museums and attractions have special hours or days on a weekly, monthly or yearly basis when they open their doors to the public for free. And, some of the greatest museums in the world are free every day. I could spend months lost in the Smithsonian in Washington D.C. or the British Museum in London, and it wouldn't cost me a dime. Here in Chicago, I often make the short walk to the Art Institute from my office to take advantage of free admission on Thursday evenings. Call the attraction or check its website - many of them offer free admission.
3. Ask About Discounts
In my old hometown, baseball games were a favored way to spend a summer evening. On Monday evenings, hot dogs, beers, and tickets were $1 each. My friends and I were always there - for $5 we could get a bleacher seat, a hot dog, and three beers. It was an awesome evening, every time. I go to New York City to wander lovingly around Times Square and check out the new shows on Broadway. Seats run up to $180 a ticket, but those seats can often be had for $20. Many shows sells $20 tickets either to those willing to get up early and stand in line or through a raffle. Some discounts are limited to students, but many are available to all and sundry.
4. Volunteer
I'm a theater nut. If I don't see two or three new shows each week, I'm not happy. This gets to be a VERY expensive habit. In exchange for acting as an usher, most of the theaters in my town will allow a volunteer to see the show. I do this often and have had great experiences. The house managers are generally pleased to have a volunteer and the duties are light. And as an added bonus, most of the time I end up being given a great seat that is better than the cheaper seat I would have bought myself. If you have a pricey hobby, look for ways to volunteer in the industry to offset your costs, or take it one step further and:
5. Get a Part-Time Job
A part-time job that is related to your hobby can be a great way to offset cost or even put extra money in your pocket. Being a ski insturctor has long been one of my dream jobs - free passes, and excuse to spend all of my time on the slopes, and the joy of passing on something I love to others. In college, I worked part-time at an arena that hosted concerts and basketball games. It was great because I got to pick my own hours, hear the concerts for free, and gave me some great stories (remind me to you about that time I played basketball with Britney Spears). Working at a store dedicated to your hobby or at a venue for it can be a great way to earn a little extra money, defray your costs, and work in a field about which you are passionate.
Saturday, February 2, 2008
A Frugal Step?
Last night, while lying on my futon, aimlessly reading webpages, and watching old episodes of Highlander on DVD (a very exciting Friday night, I know) the lightbulb in my lamp burned out. No problem, I get up and go over to my hall cupboard to get a replacement. Alas, someone has taken the last lightbulb out of the four pack and put THE EMPTY BOX back in. I am angry for about fifteen seconds before I realize that I live alone so I be the culprit. I resign myself to a night in darkness - I'll go to the store tomorrow.
Flash-forward to today, in Walgreens. I've considered buying CFLs instead of regular bulbs before, but the extra cost of buying a CFL versus a regular bulb seemed large compared to my electric bill every month. The four-packs of CFLs seemed reasonably priced at $2.75 a bulb, but I don't need four. I only have two regular lightbulbs in my apartment, one in my lamp in one in my coat closet. The rest of the lights in my apartment are fancy-schmancy round bulbs (luckily none of these has burned out during my year in the apartment, because I'm not even sure where to find replacements). Today, I'm pleasantly suprised to see that the single CFL 60 watt bulbs are Buy One, Get One Free. At $5.99 for two, it's time to take the plunge. I'm now the proud, and environmentally responsible, owner of two CFL bulbs. I'm anxious to see if this small change, exchanging a single regular bulb for a CFL, will make any appreciable difference in my electric bill.
My electric bill averages about $32 per month during months that I don't run my air conditioning. I've never been good about saving electricity before. I leave my computer on pretty much constantly, I leave lights on when I leave the apartment, I'm infamous for having every light in the place on while I'm home. I'll be trying to alter these wasteful habits over the next month, saving both the environment and a chunk of change.
Flash-forward to today, in Walgreens. I've considered buying CFLs instead of regular bulbs before, but the extra cost of buying a CFL versus a regular bulb seemed large compared to my electric bill every month. The four-packs of CFLs seemed reasonably priced at $2.75 a bulb, but I don't need four. I only have two regular lightbulbs in my apartment, one in my lamp in one in my coat closet. The rest of the lights in my apartment are fancy-schmancy round bulbs (luckily none of these has burned out during my year in the apartment, because I'm not even sure where to find replacements). Today, I'm pleasantly suprised to see that the single CFL 60 watt bulbs are Buy One, Get One Free. At $5.99 for two, it's time to take the plunge. I'm now the proud, and environmentally responsible, owner of two CFL bulbs. I'm anxious to see if this small change, exchanging a single regular bulb for a CFL, will make any appreciable difference in my electric bill.
My electric bill averages about $32 per month during months that I don't run my air conditioning. I've never been good about saving electricity before. I leave my computer on pretty much constantly, I leave lights on when I leave the apartment, I'm infamous for having every light in the place on while I'm home. I'll be trying to alter these wasteful habits over the next month, saving both the environment and a chunk of change.
Sunday, January 28, 2007
My Current Net Worth
I forced myself to sit down and write down all of my debts. How much I owe, to whom, and the interest rates. I had a pretty good idea of my credit card debt situation (it's not pretty), but I had no idea about my student loan debt. It turns out I have nine different student loans serviced by two different lenders, at three different interest rates. Here's what I found:
Assets:
- 401(k) plan: $1,846.84
- Savings: $1,000
- Total Assets: $2,846.84
Liabilities:
- Student Loan One (8.5%): $1,383.44
- Student Loan Two (8.5%): $15,788.42
- Student Loan Three (6.8%): $1,664.51
- Student Loan Four (6.8%): $1,834.00
- Student Loan Five (6.54%): $2,014.88
- Student Loan Six (6.54%): $3,482.00
- Student Loan Seven (7.14%): $3,143.28
- Student Loan Eight (7.14%): $391.51
- Student Loan Nine (7.14%): $2,347.07
- Student Loan Subtotal: $32,049.11
- Credit Card One (17.99%): $2,287.35
- Credit Card Two (30.19%): $3,860.01
- Credit Card Three (29.99%): $5,165.00
- Credit Car Subtotal: $11,312.36
- Total Liabilities: $43,361.47
Total Net Worth: -$40,514.63
My thoughts on this:
1) I'm glad that I forced myself to start 401(k) contributions when I started my new job, I've learned to live a little smaller in order to keep funding it.
2) I need to address the credit card situation sooner, rather than later. I have a relatively good credit score, and I should be able to get a 0% interest for twelve months, no balance transfer fee card for about somewhere between $4,000 and $7,500. I'm seriously considering an HSBC mastercard and moving all of my Credit Card Two debt onto it as well as as much of the balance of my Credit Card Three debt as I can. I'll re-evaluate in one month to decide whether it makes sense to apply for a second 0% 12-month offer to service the remaining debt. My goal here is to have all of my credit card debt on 0% interest within the next three months.
3) I plan on using the snowballing method to pay off highest credit cards first. I've used this method before, and actually I had Credit Card Three paid off, but then I graduated from school and got a job right away, but incurred extensive expenses to moving to a new city (note to self: moving to a new city immediately after Thanksgiving and balancing holiday travel and gift giving with no income) and holding myself over for the first month until my paychecks started coming through.
4) Now that I'm finally out of school, I need to consolidate my student loans. I've asked for information from AES regarding consolidation. Right now most of my loans are in deferment for six months (coming due on June 2007); I'm only currently paying on Loans One and Eight currently. Hopefully, with consolidation I can get the monthly payment down to $375 per month over ten years. Also, my mother has offered to split my college loan costs with me by paying every other month. I'm not sure how I feel about this, because I'm not sure that my parent's financial situation is that solid and I'd rather have them save for their retirement. However, my mother was adamant about really wanting to help with them (I'm the first person in my family to graduate from college and it's a really important milestone for my mom). I think she regrets that she couldn't just pay for college outright or take enough loans to allow me to go to the expensive liberal arts college which was my first choice, but to my mind having the kind of savings necessary to pay for college flat out isn't reasonable for a midle-class family and there isn't anything wrong with taking out loans to finance higher education.
5) Once I have my credit card debt moved to 0% interest, I'd like to begin funding a Roth IRA. I need to determine how much I can afford to put aside and set up an automatic withdrawl from my checking account.
6) I'd also like to start moving money into an online savings bank, to try to get a safety net of three months of bare-bones expenditures (approximately $5,000) built up.
7) I need to decide what the next step in my long-term plan will be. Once I have my credit card payments under control, my student loans consolidated, a Roth IRA being funded, and a small safety net built up; what's my next move? Do I continue paying extra money towards my credit card balance (even though I reasonably believe that I can keep that debt financed on 0% interest indefinately? Or do I pay off my student loans early? Or do I begin saving towards a down payment on a home? I'm not quite sure what to do once I get my net worth into the positive....I've never had a positive net worth.
Saturday, January 27, 2007
You Can Have Anything You Want ...
My father always told me that the secret to success in life was that:
"You can have anything you want ... you just can't have everything you want."
I didn't get it then, and I'm still struggling to make use of it in my life now. But the essence of it is undeniably true. The wisdom of opportunity costs without all the pesky math that advanced economics requires.
Unfortunately, my family never lived those beliefs. We are middle-to-upper middle class, but we've lived an upper class existence. I honestly can't remember a time growing up when I asked for something I wanted and didn't get it. With the exception of refusing (or more likely, simply being unable) to pay for tuition at a pricey private liberal arts school that I got in to but didn't recieve any scholarship money from, my parents pretty much gave me what I wanted. We lived a great life; we ate out practically every meal, bought expensive clothing, drove new cars, lived in a large house in a swanky neighborhood, and although the family business kept us from taking long vacations, we had a condo at the local ski/golf resort where we spent many weekends. Living well now superceded saving for the future.
Another bad money lesson that I learned growing up was that happiness can be bought. In my family, affection was a commodity to be bought and sold. That's not to say that we don't love one another unconditionally, but a pony could always help. I once came home from school, miserable and depressed - I hated my school, I hated my classes, I hated my major, I hated my roommates, I even hated myself for hating everything else - I'm sure I was sullen. No one asked me how I was feeling or what was going on, but my dad took me to the dealership and we traded in my older (and older for us was two years) truck for a new sedan. A down and dirty fight with my mom always resulted in a reconciliation brokered by a trip to the mall and the use of the all-powerful credit card to buy me something special. And a rough week at school was an excuse to treat ourselves to manis and massages at the salon.
So, now I've finally graduated from school after taking the long road through, and I'm trying to figure out how to live on what I make. I want to be able to save money so that I don't have to work for the rest of my life. I'd like to have savings so that I have the freedom to make the choices necessary for personal fulfillment. I'd like to spend money to donate to causes that I believe in. And, I'd like to put aside a little bit of money to help the people I care about down the line.
I just don't quite know how to do those things. But, I feel intuitively that my dad had the right philosophy he just failed to put it into action in his life. I'm going to try to live my life according to the "Have Anything You Want Philosophy."
"You can have anything you want ... you just can't have everything you want."
I didn't get it then, and I'm still struggling to make use of it in my life now. But the essence of it is undeniably true. The wisdom of opportunity costs without all the pesky math that advanced economics requires.
Unfortunately, my family never lived those beliefs. We are middle-to-upper middle class, but we've lived an upper class existence. I honestly can't remember a time growing up when I asked for something I wanted and didn't get it. With the exception of refusing (or more likely, simply being unable) to pay for tuition at a pricey private liberal arts school that I got in to but didn't recieve any scholarship money from, my parents pretty much gave me what I wanted. We lived a great life; we ate out practically every meal, bought expensive clothing, drove new cars, lived in a large house in a swanky neighborhood, and although the family business kept us from taking long vacations, we had a condo at the local ski/golf resort where we spent many weekends. Living well now superceded saving for the future.
Another bad money lesson that I learned growing up was that happiness can be bought. In my family, affection was a commodity to be bought and sold. That's not to say that we don't love one another unconditionally, but a pony could always help. I once came home from school, miserable and depressed - I hated my school, I hated my classes, I hated my major, I hated my roommates, I even hated myself for hating everything else - I'm sure I was sullen. No one asked me how I was feeling or what was going on, but my dad took me to the dealership and we traded in my older (and older for us was two years) truck for a new sedan. A down and dirty fight with my mom always resulted in a reconciliation brokered by a trip to the mall and the use of the all-powerful credit card to buy me something special. And a rough week at school was an excuse to treat ourselves to manis and massages at the salon.
So, now I've finally graduated from school after taking the long road through, and I'm trying to figure out how to live on what I make. I want to be able to save money so that I don't have to work for the rest of my life. I'd like to have savings so that I have the freedom to make the choices necessary for personal fulfillment. I'd like to spend money to donate to causes that I believe in. And, I'd like to put aside a little bit of money to help the people I care about down the line.
I just don't quite know how to do those things. But, I feel intuitively that my dad had the right philosophy he just failed to put it into action in his life. I'm going to try to live my life according to the "Have Anything You Want Philosophy."
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