I’m a recent college grad so I’m on an entry-level salary. I’ve had two terrible roommate experiences so I live alone. I’m an animal lover so I have two pets. I am getting into fashion so I shop more than I used to. I often make small impulse purchases. I recently became financially independent and am still learning how to budget. All of these factors combine into major financial doodoo.
The other night I examined my situation. I shed some tears and realized I needed to get my act together — especially when it comes to not buying things I don’t really need (like more shoes). I know there are so many other young people like me, out of college with a job and loving the independence, but struggling to figure out how to budget and make it on our own. Our consumer-driven society is also full of difficult temptations. Here are six things I have learned along the way that may help you too, many of which I am still working on mastering.
1. No matter how much of an animal lover you are, don’t get a pet unless you have a healthy amount of disposable income. There’s the food, toys, training, boarding, annual vaccines, monthly heartworm and flea meds. But the vet trips really kill. Last week, my cat got into a nasty catfight and the bill for his surgery was $220. Two months ago, my dog got sick from eating something and the vet bill was $240. There was another $200-something catfight a few months before that. The list goes on. I love my pets, but sometimes regret not waiting until I could better afford them.
2. Do not impulse shop — it really adds up. This is something I really have to work on. Target is my greatest enemy. Its merchandise has gotten so cute and hip and the prices are so low, but before you know it, you’ve spent $100. Credit cards make it that much easier to go wild. I vow to not go into Target anymore unless absolutely necessary, to not buy things I don’t need and to practice self-restraint in the checkout aisle. StopBuyingCrap.com is a fun blog for those interested in frugality.
3. You can find other ways to supplement your income. After spending a chunk of this month’s paycheck paying off holiday debt, I realized I needed more money, especially with my accident-prone pets. So I found some families in my neighborhood and on Craigslist.org who need an occasional babysitter. I made $60 babysitting all Saturday night, and the kid was asleep for three of the hours – not bad! Craigslist is a great place to find occasional gigs. People need their houses cleaned, offices organized, walls painted, seminars transcribed; you name it.
4. Get a roommate. I mentioned earlier I had two horrible roommate experiences, which made me scared to try it again. I’m living alone for the second year in a row and I love the privacy. But living by yourself is financially stupid. You have nobody to split rent, bills or food with. When you’re living alone, most of the groceries you buy go bad before you can use them all, but eating out isn’t cheap, either. If money is tight and you live alone, strongly consider finding a roommate — I’m starting to wish I had. Just make sure it is someone you can trust, and lay down the ground rules from day one. And avoid drug addicts at all costs.
5. Try to use your credit card for emergencies only. My credit card has really come in handy for major expenses my parents will be reimbursing me for, or times like the holidays, when I knew it would take more than one paycheck to pay off. But it is SO easy to put lots of day-to-day purchases on the card, which can really add up. It is miserable paying off the bill and realizing how many of the expenses weren’t necessary. It’s no biggie if your card is at 0 percent APR, but if you have a normal interest rate and you charge more than you can pay off that month, hello interest charges. Unless you are determined to rack up reward points, don’t use the card for petty purchases.
6. Reduce clutter and make money with eBay. I’ve sold old books, clothes, DVDs, electronics and all kinds of doodads I no longer need or want on that Web site. I don’t always make much, but hey, $7 for a Collective Soul DVD I got for free but would never watch is a meal at Jason’s Deli. Getting rid of that stuff also clears out more space at home.
I hope these tips help others struggling to adjust to the turbulence that financial freedom brings. Do you have any tips or advice for people in the same boat? Or any lessons you’ve learned and want to share?