Forget $40 a day with Rachel Ray. This Kossacks Under 35 Diary is about surviving on next-to-nothing. If you’re broke, let’s fix it.
Originally, I was going to give tax tips tonight. But, the IRS website has not yet updated its information for 2006, so Tax Tips will be rescheduled for February 8th. Perhaps by then we might even have some W2’s on hand.
The prompt for this diary came during sarahnity’s excellent diary about Personal Finance. wu ming commented that the solutions applied only to those who had money to invest – what about those who are struggling to get by? eugene reminds us that all Kos readers are not upper-middle-class latte-drinking urban intellectuals. So, for all of you making a minimal wage, this one’s for you.
After graduating from college, I moved to Chicago, where I took an entry-level job with the Art Institute of Chicago. The only starting position was in Visitor Services – I sold tickets, checked coats. After proving my mettle for a month, I was able to sit at the “Information” desk. I made $7.50 an hour, working 35 hours a week. Luckily I hadn’t aged off my parents’ health insurance. With my meager income, I was forced to radically economize to make ends meet. Recently as a graduate student pulling in around $9,000 a year in slave wages, I have stepped up my economizing ways. What follows are several suggestions that worked for me. Anyone with more tips, please comment below.
Recognize that to make this work, you must be prepared to cut every expense from your life. Get your own $10 coffee maker and a $6 can of grounds. Shop discount stores. Clip coupons. Look for savings. Adopt a do-it-yourself mentality. If you have no money, you need to stop spending it. It’s a black-and-white issue. Credit cards aren’t the answer either, if you have no legitimate prospects of improving your situation soon. The only solution is to spend as little as possible.
First off, prepare a budget. If you are employed, take your most recent “normal” paystub. Double this as your monthly income. (If you are paid every other Friday, consider those two extra checks a year to be fall-back.) Compile all of your bills for the past few months. Write down every regular expense you currently have. Budget out your rent, insurance, gas, phone. Add between $20 and $75 a month for miscellaneous – shampoo, toothpaste. Don’t forget your birth control or any other prescriptions you take regularly. You may be surprised at how much stuff costs. Estimate your monthly electric and water bills as the highest they've been all year. Hopefully your income covers your baseline expenses. If not, you will likely need an additional part-time job. Either way, your next step is to decrease these standard monthly expenditures.
Lower Your Fixed Expenses
1.) Telecommunications. You need to have a cell phone. It’s the only thing I suggest you absolutely not cut from the monthly budget. In terms of safety, it’s crucial. First, see if you can get in on a family plan with parents. Check with your employer for a discount. (For instance, my gig teaching with Kaplan, owned by WaPo, lets me in on WaPo’s 10% discount.) The cheapest plans right now run around $38 a month including taxes for around 300 daytime minutes. The other option is the pre-pay plans. T-Mobile starts at $20 a month. If you are making less than the “included” minutes of calls in your monthly plan, consider switching. Talk to your provider about switching plans within the company. Often, they may be willing to work with you. If your call volume varies by month, consider a flexible plan like from Sprint. Get the free or cheapest phone that comes with a plan. When you renew, ask if they can make you a deal. You really don’t need a fabulous phone if you can’t afford it.
You don’t need cable TV or an internet connection. Get an antennae from Radio Shack for 10 bucks to pick up the local channels. I had an antenna for 2 years. I survived. Before you do anything, though, plug your TV into the wall with the cable hook-up. Basic cable might come out. Hell, if you have a shady landlord you may even get premium cable, including HBO and Showtime, for free until the cable company catches him. (Saddest day of my life.)
Check to see if you pick up bootleg wireless. If you have internet at work, consider foregoing the internet at home. There are plenty of resources to find free wireless. If you have a roommate, talk about splitting a basic internet package – just the internet. Often, if you have cable internet, the basic TV stations come in for free. You can get a splitter from Radio Shack for $10. Borrow another co-ax from a friend. Or, ask the installer to split your own co-ax into multiple cables. They can do this. I’ve seen it. Run one from the wall to the splitter, then from the splitter to the TV and the Internet box. If you have less than three, you will constantly have to be switching cables back and forth. Gets to be a drag.
2.) Insurance. Get your car insurance down. Shop around. Progressive will let you compare rates, even when they are not the lowest. To lower your monthly payments, increase your deductible to $500 or $1000. Note that if you have damage up to this amount, you will be responsible. The corollary is that you need to drive very carefully. Note that if someone hits you, they are liable. If your car is old, reduce your coverage to cover you only in the case of hitting someone else. Get your renter’s insurance (below) from the same provider if you can to save on both. Ask for a low-mileage discount if you drive short distances to work. If you are accident free or a good student, ask for other discounts.
If you don’t have health insurance at all, consider calamity insurance. The high deductable will basically protect you in case you wind up in the hospital. Fellow Kossacks here can testify to the uninsured medical bills. Remember, you often can’t protect yourself against all of the crazy drivers in the world. It’s worth an extra $20 to $50 a month to prevent a $10K hospital bill.
I strongly suggest that you carry Renter’s Insurance. State Farm will insure you for about $150 to $200 a year, which works out to around $15 a month. Particularly if like many low-income folks you’re not sure about the safety your neighborhood, it can be a good way to protect your stuff. (Also ask the landlord to install additional locks. Check the lease. Usually they have to.) Remember that you need to insure the cost of replacing everything. Ask for a high deductible – at least $500, if not $1000. You and the roomie can split it. If you are renting a room from someone in a private residence, talk about insurance. Remember that you may be liable if your hair dryer shorts out and burns down the building. Get any agreement in writing!
3.) Other Services. Cut all of the non-necessary expenses. Your gym membership is non-necessary as long as you have two feet and a pair of sneakers. You can also get a bike on Craigslist for less than $50. Three birds, one stone: avoid the gas costs, save the planet, get exercise.
Water Bill: If your water bill is an average based on your entire apartment complex, then you can’t do too much, but still avoid using whatever you can. As a student, you can shower at the gym. Work out, shower. A one-two punch! Call your utility company and ask if there are any savings or ways to lower your costs. If your water bill is all you, then follow these tips for lowering it. Check for leaks and drips – have the landlord tighten washers, or do it yourself. Keep a pitcher of cold water in the fridge so you don’t have to let the tap run. Don’t forget to put a brick in your toilet tank!
Power Bill: A two-pronged attack. (Hee hee.) First, use less. Like MTV in the 1990’s, you want to be unplugged. The chargers and power strips all suck out bits of energy that add up over time. Keep the TV unplugged when not watching. Same for the phone charger, the computer. Keep it unplugged when it’s off. Turn off the power strips. Also, keep water-filled plastic bottles in the freezer and refridgerator at all times -- most of your fridge’s effort goes to keeping the air in there cool. If you put water in there instead, the water will hold the cool and chill out your power consumption. For your next gift-receiving holiday, consider asking for a solar-powered gadget powerer to keep your stuff full of sun-juice. This can be enough to charge your laptop’s battery if left in the sun long enough. Rise and set with the sun – we lose a lot of natural light by sleeping until 10:00 a.m. Get up early, take advantage. Solar-power yourself!
Second, get your bill lowered. If you heat your house primarily with electric heat, you can get a savings. I had this in Illinois. Look at the fine print on the back of your bill. Call the utility company and ask if there is any way to lower your costs. Check the website. If you qualify for certain kinds of discounts, take them! If you have electric heat, consider an inexpensive, energy-efficient space heater or electric blanket and only heat the direct space where you are. Sleep with a wool hat on. Builds character.
Public transit. If you can take it, do it. Most cities will let you hook your bike on the front of the bus or bring it on the train. Find a way to make this happen for you. A monthly card will always save you money over a daily card. Find out if your employer subsidizes mass transit. A quick Google search will tell you if your city offers tax breaks for you or discounts for employers who do.
Discretionary Spending
Once you’ve cut your fixed expenses down, you need to work on the rest. I include food with “the rest” because it’s not a constant, contractual expense. We’ll begin there.
Food. Recognize that with your income, eating out is not a viable possibility except on special occasions. You will also need to bring your lunch every day. Make large quantities – enough for 3 or 4 meals -- and eat leftovers for lunch. Don’t feel hemmed in by “the rules.” Eat pasta for breakfast if you want – add an egg and make it carbonara! Think beyond ramen. Beans and rice will give you a near-complete amino-acid group. Buy dried beans and rice in bulk. Bean salads with corn and other veggies are great, too. Chick peas, canneloni beans, kidney, black, red, great northern... Endless. Spice it up with a large shaker of curry or a bulk spice. Add some frozen or fresh vegetables – you can always afford carrots. I survived on chick pea and spinach curry in college.
Baked ziti is also a great value for 6 or 8 meals, depending on how small you cut it. They will freeze well in Gladware, too. Scrambled eggs and tomatoes gives you great protein and vitamins. Tuna casserole is really easy and full of protein. Huge cans of oatmeal provide an inexpensive breakfast and lots of fiber. Potato skins are full of potassium. Lemon and garlic will jazz up that plain spaghetti. If you must eat the ramen, class it up with some frozen peas or chopped scallions. A few emergency ramens in your desk or locker at work can help you in case of emergency lunch shortages – don’t blow $5 a day on buying lunch! It microwaves up pretty well.
Make sure each meal contains protein and fat. Carbs are cheap, but they don’t fill you up. As a rule, each human needs about a half a gram of protein per pound of body weight, more if you are actively exercising. Fat helps you feel full, and is also important for absorbing vitamins and certain biological processes. Splash some olive oil on that pasta!
Cut costs. Do you live near an ethnic neighborhood? Hit your local Chinatown or Little New Delhi for great ethnic groceries. Can you buy in bulk? Costco is a Democratic donor. Avoid junk food, as it adds to the bottom line – twice. Finally, don’t be above going to WholeFoods and scarfing down the samples. Just be subtle. Make repeated passes of the same sample tray. Consider bringing a hat in your bag to disguise yourself. Saturday is the best day for sampling, because the yuppies are out in full force.
Barter and Trade. You need an oil change? You can teach guitar? Get yourself onto Craigslist and offer to barter for what you need. A cursory look at the Austin list shows people in need of furniture and tech installation and willing to trade gift cards, art work and appliances. Even if you don’t need anything right now, put yourself out there. Similarly, if you can give lessons, whatever it’s in, consider posting an ad for that, too.
Sell Your Stuff. If you have old stuff, sell it. Anything you haven’t used in a year needs to go. You can sell some of your old clothes to some thrift stores. Try putting the better-condition stuff up on eBay, particularly stuff like bags or earrings. If you have furniture you’re not using, put it on Craigslist or eBay. You’d be surprised at what people want to buy. I bought my old desk chair on eBay for $10. I sold it on Craigslist 3 years later for $20. (Heh heh.) Look in family attics. Offer to “clean them out,” and clean up with a re-sale. Hell, hold a garage sale if you can. Second, sell yourself. (No, not like that.) Be creative. What can you offer people? What impressive skills have you acquired? Can you grow fresh basil? Can you fix up resumes? Can you teach guitar? Accordion? Can you be a personal fitness guru? Private yoga instructor?
Make stuff. Learn to knit. Learn to sew. Learn to build furniture. Gain the skills that will allow you to provide for yourself. I built most of my own furniture. Home Despot will cut their big pieces of wood down to size. This is key: make a plan before you go, figure out the exact sizes you need, get them cut in the store. Here’s a bookcase. A few pine planks, some stain, some polyurethane. Similarly, I got a $10 wood nightstand at Goodwill, slapped $10 of paint on it (and a piece of wood I nailed some trim onto) and voila, matching headboard and bedside table. Check out HGTV and Martha Stewart for suggestions.
New stuff. When you need new stuff, do the same in reverse. Make it, or buy it used. Not only are you decreasing the amount of low-quality crap being demanded and produced, you’re recycling. Check the usual suspects – eBay, craigslist, Goodwill. Look in local papers’ classifieds. Freecycle. Craigslist has a whole section for Free! stuff. Free right now in LA: furniture, VCR, and various housewares. Note that people get frantic at the end of the month when they’re trying to move. Take advantage!
Entertainment. Being broke doesn’t mean being bored! If you have free time when you’re not scratching out a living, do stuff. Check out your local library for free lectures, and get some great books while you’re there. I saw a Nobel Laureate during my meager years. Go to museums with a “suggested donation” and give a quarter, or a dollar if you feel extravagant. Sign up for Flavorpill or other local culture digests. Pick up your weekly alternative paper and see fledgling bands. Check your local university or college for lectures, exhibits, film screenings. Remember that ideas are free, and no matter how broke you are you can still be intellectually fulfilled.
Part Time Gigs.
Last but not least, here are some tips on part-time jobs you should consider specifically because they will not only make you some more cash, but will fill some of your other needs.
Restaurants. Can you be a host or wait-person? You may not make much hourly, but you should get a free meal each shift and possibly some cash tips. When I realized that my $7.50/hr would not increase any time soon, I got a hostessing job that paid $10/hr. I worked 60-hour weeks, but I survived. (And I ate a lot of really good food. One time Dick Durbin came for lunch there, so that was an added benefit too.)
Catering. Call the local hall or catering place. In a city? Call every alumni club and private club. They all have catering staff. Let your fingers do the walking through the yellowpages. It’s not hard to do – pass trays, get the swells drunk. Be prepared to encounter snobbery from lifetime caterers who resent you encroaching on their turf. I’ll admit that I found catering to be one of the more miserable side-jobs I ever had. But you get a free meal, and the schedule is usually very, very flexible.
Starbucks. Anyone working over 20 hours a week can get insurance. Many the wife of the down-sized executive has taken this path to insure the family. You can do it, too. And get your caffeine fix for free.
Test Prep. If you are a standardized-test champ (90th %-ile or up), get thee to Kaplan or Princeton Review or one of the competitors. [Disclosure: I’ve worked for Kaplan.] The pay is very, very good and they take good care of their employees. It’s flexible. You can teach classes and tutor. Caveat: you will have to compete for the job and train for a month. Kaplan at least pays nominally for training, and for out-of-class time preparing lessons.
Brain Power. Smart and broke? You can be a tutor. Talk to local high schools and offer yourself as a tutor. Network with friends – someone’s gotta be a public school teacher. Put that degree that placed you in debt to work. FYI, a college classmate currently earns $200 an hour as an “art history tutor” to some rich kids in NYC. Now that you’re gnashing your teeth because you didn’t think of it first, get on that.
But, But...
I can hear objections about how this diary assumes a certain set of resources and means. If there’s something you need that you don’t have and can’t afford, look for another way to gain access. Part of being broke is being creative and using your brain to solve problems. Don’t hesitate to ask friends and family for help. Don’t be ashamed – just do the best you can.
One major problem you may have is socializing, if your friends aren’t in the same boat. I suggest simply being honest about your situation – they may adapt accordingly. Don’t be ashamed to order a Coke at a bar. As Sarah pointed out, get just an appetizer at a restaurant. True friends should be sympathetic to you – I don’t mean that they’ll foot the bill, but they should try to avoid awkward situations.
Two last comments. First, recognize the following: Time = Money. You don’t have money, so that means you’re going to have to invest your time, in either a part-time job or the effort it takes to compare prices, sell your stuff, make new stuff. Remember that a quick fix is often not the best solution. Think ahead. Carry an apple or a snack with you so you don’t get tempted to buy something. Make a grocery list so you only have to go once a week.
Last but not least, it is incredibly, incredibly important that throughout your lean years, you take the effort to treat yourself well. If that means a DIY pedicure with 99-cent polish, do it. A $2 mini wedge of Brie? Bon appetite. Read trashy magazines at Barnes & Noble to get your fill. Don’t let your personal and guilty pleasures fall to the wayside, and hold your head up when you do them. You’re still a person!
Society will remind you every day that because you have less, you are supposedly worth less. That’s silly, especially coming from a society that has horribly misplaced values in how certain forms of work are rewarded. Be proud of yourself for using your brain to make the best of it, and doing the best you can.
Update: Tips from Fellow Kossacks!
- Consider a part-time job as a valet.
- Avoid bars, drink a six-pack with friends at home.
- Students: the library is always hiring!
- Energy-saving flourescent “curly” bulbs save energy, save money, save the planet!
- Do your best thinking in the shower – with the water off!
- Go to the library for books, DVDs, videos, CD’s.
- Get on your library’s email list for book sales, events.
- Share Netflix with friends.
- Save loose change! It adds up. Banks may count it for free, or get paper wrappers.
- Get out of your house! Spend time elsewhere – lower your heat, electric bills.
- Make your own coffee! Many tips below.
- Or, give up coffee! (You first.)
- Virgin cellphones have cheap pay-as-you-go plans - $10 a month!
- Look for a debit card that saves the spare change in a savings account.
- Avoid credit cards. If you can’t afford it now, don’t buy it.
- Group living can help you save a lot on rent, food.
- Dkos community diaries – Home and Garden, Home Repair – can help you DIY.
- Use wikihow to get help with your DIY projects, too.
- Put a plastic bottle filled with water in your toilet tank – safer.
- Dates at the bookstore – read to your sweetie.
- Electric blankets are a great way to heat just yourself.
More Tips! Kossacks are Thrifty Liberals!
- Check if you can get on your parents’ insurance policy – homeowner/renter, car, health.
- Gifts – ask for stuff you need, or gift cards to stores you love (and can afford! $20 at Tiffany’s ain’t gonna help you, my friend.)
- Buy stuff you will use. See Sarah’s comment about fabulous shoes in the closet. Sigh.
- Costco, Costco, Costco! (But with caution.)
- Pay credit cards off starting with the highest interest rate.
- Check your bank balance! Face those finances down. Grr.
- Buy basics – soap, toilet paper – on sale. You know you’ll need ‘em.
- Check out financial advice books from the library. (Don’t spend to save!)
- Save something – even a dollar a week.
- Crash weddings, church dinners, corporate parties for free food. Look spiffy.
- Libraries have computers and free internet access.
Even More Great Ways to Save Money!
- Try to save an emergency fund – 2 months of expenses. Then grow it to six months.
- Get a pre-paid cellphone and use it ONLY for emergencies. Use a voice-over-internet phone at home for social calls.
- Stop leaks! Save money, save the planet.
- Thrift stores have great cheap books (and all sorts of stuff!).
- City libraries have family passes for museums. Ask for them.
- Crash school graduations. Free booze!
- If you need legal advice, go to a legal clinic.
- If you must pay for cable, get cable phone too.
- Consider a live-in-help position if you need a job and a place to live.
- Try this budgeting sheet from the state of Florida. Ignore the legal mumbo jumbo!
- Get small appliances at garage sales.
- Rechargeable batteries! Good for your pocket and the planet.
Penny-Pinching Kossacks Are On Fire!
- Commerce Bank doesn’t charge to count your change if you have an account.
- Transfer credit card balances to no-interest-for-#-months cards, but only one-to-one. Pay down without interest for awhile.
- If you want to buy something pricy, think about it for a few days. If you really need it, wait another day, then get it.
- Freeze your credit card in a block of ice. You’ll need to wait for it to thaw before you can use it – makes you think about whether you need that new thing.
- Avoid bottled water. Use tap. Get a jug for the fridge.
- Dye your own hair. Get a cheap haircut (just as good!).
- Try for a press pass to get into events for free.
- Have dinner parties at home with friends rather than going out.
- Grad students – live for free as a dorm RA or grad advisor. (If you can…!)
- Great foods to make in bulk: soup, stews, chili, meatballs.
- Keep the car in good shape. Routine maintenance is cheaper than expensive repairs.
- Learn to DIY basic car repairs – oil change, fluids.
- If you must use a credit card, get one with rewards – cash or miles.
- Keep the thermostat set to a moderate temperature to save $$ on energy bills. You shouldn’t be in a t-shirt in the winter or a hoodie in the summer! ☺
- Consider insurance deductibles in terms of your ability to pay. Don’t have a deductible higher than you can afford to cover.
- Emergency phone – all cell phones can call 911 without a service plan. Keep an old phone charged for emergencies in the car.
- Work part-time in a hotel on weekends – good pay.
- Speak another language? Be a translator. (And a tutor!)
One Last Update From Cost-Conscious Kossacks
- Check with your car insurance for a “safe driver” online course – get a discount!
- Get a hairdo, cut or dye at a beauty school. Cheap, and stylish!
- Dollar stores are great for toiletries.
- Check Big Lots for discounts on expensive products
- Cook with a crockpot – cheap ingredients cooked slow make great stews!
- Look up OAMC (Once a Month Cooking) online for recipe ideas
- Use vinegar as a cleaning solution. Use cloths instead of paper towels.
- Split wireless costs with neighbors.
- Start a garden – grow your own herbs and food. Learn to can or preserve it!
- Score furniture on college dorm move-out day, or by large apartment dumpsters.
- Scope the curb on “bulk pickup” or large-trash-item garbage days.