By Heather B. of NoPasaNada
When I graduated from college my mother presented me not with a hefty envelope filled with cash or the keys to a brand new CR-V and definitely not Happy Graduation Jewelry. Instead she presented me with Suze Orman’s The Money Book for the Young, Fabulous and Broke. I had just returned - literally 36 hours prior - from a six month trip abroad where I spent every single cent to my name plus God knows how much provided by both of my parents up until the last night I was there when I was begging for more euros so I could end my trip in style: table service at a club in Madrid. So I was feeling less than fabulous, really freaking broke but less than young since I was being allowed to enter the real world without any sort of adult supervision. The only guidance provided was Suze Orman’s book and a threat to pull every single hair out of my head if I didn’t get a job.
I got a job - after spending several weeks unemployed, solely surviving on Yellow Tail Shiraz and crying to my parents that I’d have to move home because OMG I CANNOT GET A JOB. Since my foray into the deep abyss known as debt, I have become far more aware of my spending habits (J. Crew is not an emergency) in relation to the amount of money that I bring in. HINT: Do not spend more than you have. Seriously.
Here are a five of my favorite personal finance tidbits. Something a little stronger than Suze Orman’s ‘pay the minimum on your credit card plus $50′ solution which she has since reneged on because after a tanking financial system, she now believes that we should pay ourselves first. Though I have always believed that saving 10% of your income in a high interest savings account (think ING Direct) would be far more beneficial than a) sticking it under your mattress; b) putting in a regular savings account or c) putting it in a regular savings account attached to your checking account so when you accidentally overdraft suddenly ALL of your money is sucked up. Not that I’m basing this on personal experience or anything.
So here are some tips that you can use or ignore but I have done it all and have a fatter wallet because of it:
1) Comparison shop:
Not just in grocery shopping but also credit cards (check out the APR and interest rates); health care solutions; insurance; EVERYTHING. There is always a cheaper alternative and so many people get the shaft by not looking around to see if the same exact product might be cheaper elsewhere. MSN has compiled a great list of the 100 Greatest Websites for saving money
and time when trying to save money.
2) Join a credit union: I have more than one checking account. One is for discretionary (fun-money) spending, the second for actual bill paying and the third has been the resting place for all extra income not earned through my day job. The third account was opened at a credit union because having most of my money at the hands of some giant, heartless, soul-sucking large bank brought out the deepest rage in me. That isn’t to say that you shouldn’t have at least one account at a larger bank because those will be the funds easiest to access at the time of an emergency or while traveling. But having an account at a credit union is just cheaper. If you overdraft (which, you know..DON’T) they will charge you mere pennies as compared to a larger bank. They’re also friendlier and have considerably friendlier and more helpful customer service agents and bank tellers. Get this: They’ll actually apologize when they are wrong! Amazing. But most importantly if you’re looking for a loan for a car or mortgage then the service and expense will be so much better.
3) Save by reusing:
Let’s just say that diapers aren’t the only things that you can buy in cloth but since we’re all ladies here (or at least most of us) I can announce that there are cloth feminine products
as well as other reusable products for monthly needs. I have no problem saying that but many people find it skeevy and gross which, is fine…different strokes for different folks. But the amount of money that can be saved by purchasing reusable products is astronomical also you’re helping the environment. That is if you’re into that sort of thing. But I can tell you that no one here will judge if you like running to CVS to spend $10 on paper products. Also in the reusable category: water bottles.
4) Buy homegrown: We’ve all heard more than once that buying locally will help save the little guy, help small business and will inevitably help the economy. Which is great. Another way to buy local is to go shop at a farmer’s market or local co-op. Both give the shopper the opportunity to get locally grown produce and products and are often far cheaper than the local big box grocery store. Also, many farms are growing organically now and it also gives money to the farmers who are hurting right along with us.
5) Invest: Yeah. I said it. Invest. Invest not just in savings or for your kid’s college education but take a hundred bucks and buy a few shares of stock. While the market was (and probably will again) tanking there for awhile, so many people pulled out out of fear thus leaving the price of a share for a lot of companies far cheaper than it would be if this were 18 months ago. The market will not continue to go down and buy not investing you’re only hurting companies, the very companies that are helping to drive the economy. As the market rises, so will your money and voila! In three years you’ve earned back a lot more than you put in.
What are your favorite money management tips?