If something is free, chances are accomplishing it will take up most of your day. When you're so busy that your schedule is constantly at odds with your to-do list, something will have to give. And often, the only way to save time is to spend your hard-earned cash. Examine your priorities to figure out when to suck it up and save and when is best to shell it out.
Lifestyle. Some budgeting tips sound like common sense--eating at home is cheaper than restaurants and take-out--but this advice isn't one-size-fits-all. Be honest about your habits so you don't end up falling short. Grocery shopping doesn't save money if the food goes bad before you have time to cook it. Dinners out can add up, but bringing leftovers home can mean an extra meal free of charge and cleanup. Consider how your usual behavior affects your spending and be realistic about what changes you can stick to.
Time. Tasks like laundry and routine housekeeping may be simple, but they can seem neverending. If the laundromat is blocks away or the in-laws decide to visit unexpectedly, a wash-and-fold and a housekeeper may be just what you need. If you're in a hurry, consider how valuable your time is and how much stress can be eliminated by delegating these chores. Sometimes the trade-off is worth it, but you have to make that call.
Convenience. Take advantage of community services whenever possible. Alternatives such as public transportation and libraries are inexpensive ways to indulge without emptying your wallet. But in some situations, it may be smart to spend a bit more. Just don't try to justify unreasonable purchases. Relying solely on taxis to get around is frivolous, but the occasional late-night ride home is an investment in your safety rather than a waste of funds.
Skills. It's great to learn new things, but be wary of taking on a job you don't know how to do. Leave home repairs and renovations to the pros in order to avoid spending twice as much fixing your mistakes. Could you give up an ongoing beauty routine in favor of at-home treatments? Successfully replicating salon services at home can save time and money without putting yourself at risk.
Quality. Don't skimp too much. It can be easy enough to dye your own hair or clean your own house, but the right products make all the difference. High-quality supplies may look expensive, but a one-time investment can maximize your long-term savings. Even the most expensive drugstore hair dye costs less than going to a stylist, and cheap cleansers will only force you to wash the floors twice.
Ease the pain of unpleasant tasks by using your money strategically. Spending a lot on luxuries may feel irresponsible, but eliminating mental stress and improving your quality of life is priceless. Which parts of your routine cause the most hassle? Don't get wrapped up in high-stress decisions that'll give you headaches when you can kick back and relax by spending a bit more.
When graduates leave the hallowed halls of academia, they are in search of a dream job that will pay for transportation, food, and nice place to live. Unfortunately, a rollercoaster financial economy has given birth to a bleak job market and daily increasing cost-of-living expenses. Faced with a tireless search for a decent-paying job as well as trying to keep the creditors from calling every hour of the day, many young adults have had to make the decision to return back to their childhood bedroom.
According to a Pew Research Report from 2012, 29% of graduates are back t the four walls that still have teeny bopper posters and a funky-colored comforter on the bed. Besides screening your cell phone calls from your friends who have been able to move past sharing AM coffee-making duties with their parents, there are ways to make your living situation more bearable and brighter:
- Appreciate the fact you have a place to go. Instead of feeling sorry for yourself about your current living conditions, be grateful that you have a family that wants to have you back in the nest again. Don't be ashamed to let friends know what is happening with you. They may be going through the same situation as you.
- Have a room makeover to breathe new life into an old space. Take down the teeny bopper posters and update the curtains and the bedding with accent pieces that highlight your current style and tastes. If you have furniture from your dorm room or apartment, get it out of storage or out of your parents' garage.
- Offer to pitch in with household responsibilities. You might be too old to have a chore chart, but you are old enough to do laundry and the dishes. Remember, you did not have maid service when you were in college, so don't expect it since you are back at home.
- Set boundaries that both you and parents can follow. Some parents and young adults have put together an agreement that outlines what is expected from everyone. This can help alleviate problems with privacy, staying out all night, and other issues that can come up.
Finally, enjoy the time you have to spend with them. They may be family, but they're your family.
Coupons carry all kinds of stigmas, branding users as dorks and misers. Guess what? Unless you're high up in the ranks of a successful company, the recession is still very much 'on.' It's a new era, and it's an era in which saving money is anything but miserly. It's smart.
Saving on Groceries and Drugstore Items
- Each week, get three copies of the Sunday newspaper. You'll triple your coupon savings. This is also where you'll find store advertisements. Regularly pick up store-specific coupon and savings books (usually displayed by front entrances). RedPlum and SmartSource are two major sources.
- Once a week, go through it all. Clip the coupons and take note of what's on sale. Your first few weeks, you may not have a coupon for sale items, but be patient. Soon you'll begin putting sales and coupons together for stellar savings. By combining sales and coupons, you can easily save 50% or more.
- Consider your supermarket ads your shopping list for the week. With certain exceptions (we all have our little addictions), base your weeks' meals around what's on sale. You'll save money, and end up trying delicious new stuff in the process.
- Prepare a list at home and stick with it. There's a reason you've heard this before--it works.
- When you come across a massive discount on something you use routinely--pasta, shampoo--stock up.
- If possible, shop at a store which offers a double- or even triple-coupon day. This information is on store websites.
- If you need a little help getting started, check out CouponMom. This ingenious site does the hard work for you, organizing every store, every coupon, noting where they can be found and pointing out freebie opportunities.
Eating Out and Having Fun
Thanks(?) to the recession, the number of companies offering discounts has exploded in recent years. For you, this translates into great food, fun, pampering, and a few splurges without breaking the bank.
Sign up for email lists from restaurants and stores you frequent to get exclusive sale notifications and coupons. When eating out, take advantage of the two-for deals offered by chains like Applebee's, Olive Garden and Outback Steakhouse.
Sites like Groupon, Time Out New York (other cities available), Living Social, Thrillist and FatWallet offer up deep, deep discount coupons for limited periods of time. You'll be amazed at the selection, from trendy grub to vacation deals to lingerie.
Your Bottom Line
If all this sounds like too much work, relax. Once you make saving a routine, it actually becomes fun. After all, what could be bad about saving tons on everyday items, slipping into a ninety-percent-off designer frock and treating your pals to an insanely discounted dinner at the city's hottest new pub?
On March 10, 1876 Alexander Graham Bell, telephone's father, picked up the phone and dialed his assistant Thomas Watson. "Mr. Watson, come here. I want to see you," he said--the first words ever uttered into a telephone.
Neither Watson nor Bell could have looked ahead 137 years, to when folks speak casually on phones countless times per day, text message, take pictures, and settle everything from coffee to co-pays. Consumers now have a plethora of payment options that put the battered leather wallet to shame.
• Dwolla: A peer-to-peer (P2P) network-based system which users can access, pay with, and sign up for through Facebook, Twitter, or by email. At 25 cents per transaction, users can then link to their bank accounts and "pass the dwolla" to friends or merchants on their iOS, Android, or Windows 7 phones--only in the U.S., however.
• Venmo: An easy-to-use SMS/Web-based program, Venmo is free for individual users and charges 3.5% on each transaction for companies. Venmo runs on a platform of mutual trust, hatched as it was by two former UPenn students as a way to settle IOUs. Venmo is offered for Android and iPhone and exclusively for U.S. bank account numbers.
• Square: With a small, sexy little cube, Twitter's co-founder Jack Dorsey turned every phone into a credit card machine. Guaranteed to put a smile on every business owner's face, Square charges 2.75% per swipe and offers a smorgasbord of stats--from daily sales reports to most lucrative hours of the day.
Notably, Starbucks and Square partnered up to allow customers to pay via their phones at roughly 7,000 locations across the U.S.
Non-commercial users can slap the Square Wallet app on their phones for hands-free checkout, links to all their credit cards, and easier online checkout.
• TabbedOut: Late-night clubbers need wait no longer on an over-worked bartender since TabbedOut entered the scene. Built exclusively for the hospitality industry, this app allows customers to log in and pay tabs or split checks themselves in 90 cities across 20 states. Additionally, merchants have instant access to customer history, preferences, and feedback.
• Google Wallet: By securely storing credit card information on the infamous cloud, Google Wallet allows users to easily pay at over 200,000 merchants across the U.S. Users can log in online and insert information into online shopping forms, or pay in-store at NFC (near field communication--a type of secure wireless connection) points by tapping the back of an NFC-enabled phone.
Move over coin purse--America's new billfold is a piece of technology. If Alexander Graham Bell were alive, he would probably swipe the barcode on his phone at Starbucks, too.
These days it seems like the only money anyone has is plastic, but there are many reasons why using cash is better than buying everything with a credit card. Assuming you are diligent about paying your credit card off in full and on-time each month, you'll never miss a month, you'll never pay interest, and that would be the same as cash plus rewards, right? In a perfect world, I think yes. The problem is that chances are very good you will miss at least one payment in your lifetime. Not only will missing a payment negatively impact your credit score, you may also incur fees and increased interest rates. Here's one reason why you should consider going green: cash hurts.
A study by Carnegie Mellon University, Stanford, and MIT viewed participants' brain activity while making a purchase with cash versus credit. The researchers found that when making a purchase with cash, the pain receptors in the brain were activated, creating an emotional response that hindered the purchase. George Lowenstein, a Carnegie Mellon professor and co-author of the paper, said that "credit cards effectively anesthetize the pain of paying." The science behind this research makes sense when you think of this in terms of your attachment to large bills and your credit card(s). When making a purchase, it hurts to break your twenty for a pack of gum, for example. That twenty fits so perfect in your wallet you just might choose it over the gum. However, when paying with a credit card, you can have the gum and most of the time your card doesn't even leave your hand.
For whatever reason, people tend to spend less when paying with cash. According to a group of rational economists, people are constantly calculating the cost and making decisions about their financial situations, but a group of researchers featured on the PBS NOVA special "Mind Over Money" are finding that although someone has the ability to recognize the rational decision, they may choose to make an irrational decision based their desire for immediate satisfaction.
It's conventional wisdom to say that you shouldn't spend what you don't have, but when using cash you truly can't spend what you don't have. If you find there isn't enough cash in your wallet to make a purchase, you may reconsider the purchase on your way to an ATM. Deciding the purchase isn't worth your effort could then ultimately save you money.
There are a lot of things I didn't learn in art school about making and selling ceramics and being a full-time artist. My teachers hadn't experienced a career making and selling art full time, so they didn't have much advice for me. From my own experiences and research I can confidently say I feel ready to turn this hobby into a flourishing business.
Keep Your Momentum Going:
If you've recently graduated from school, find whatever kind of art-related job you can. Or find flexible work that will allow you to simultaneously create. Whatever you're doing, keep doing it! Galleries and employers want to see that you've continuously worked towards your goal. Your first job right after school may not be your dream job, but consider it a stepping stone, something that will help you get where you want to go.
Network, Network, Network:
You've heard it all before, but this is one crucial step for an artist-entrepreneur. When I lost access to a ceramics studio after graduation, I realized there were things I could be doing to set myself up for success until I was finally able to continue to pursue making ceramics. Use your "down-time" and join groups, email people who can provide you with advice, and get your name out there. I joined many social networking sites, started a blog, and stayed in contact with artists I admired. Seeing what worked for them helped me decide which steps to take for myself. I was able to build a following and create connections throughout the world before I even had a product to sell! Then, when I was ready to sell I had tremendous support from people I took the time to get to know.
Prepare for Stress:
Sure, you're doing what you love to do, but now it is your job and not just your hobby. Aspects of your artistic passion might begin to lose their luster. You will have website and social network upkeep, customer inquiries, shipping disasters, equipment failure and so much more, all on top of producing the work you're hoping to sell. You will have to balance all of your roles, especially if you haven't been able to quit your day job yet. I work part time in the mornings, and the afternoons and evenings are devoted to making my ceramics business work. Some days I work all the way up until it's time to go to bed. Sometimes I feel crazy, but it is all done so that I can have the freedom of being my own boss and continuing my passion for making objects.
Prepare for Success:
The opportunities I've had thus far have all landed in my lap (I still wonder how I got so lucky), and I wasn't ready for any of it. Start preparing yourself for your business to take off, because it might! I've hit that point where I feel pretty confident that my next job will be me working for myself, pursuing my art full time, and I had no idea it would happen before I turned 30.
Have you ever thought of turning your hobby into a paying gig? Many people have a skill outside of their chosen career that could earn them cash on the side. Before you quit your day job though, here are some tips on 5 different skills that can help usher you into an era of multiple income streams:
Photography: The right photo may be worth a thousand words (or even dollars!). Think niche photography if you want to get paid: Do you like shooting people's faces? Headshots or weddings are your niche. Are you a lighting fanatic? Shoot products for a business. Learn to take great photos by talking to professionals and practicing. Eventually, start a portfolio of your best work and network to find people who are interested in viewing it and perhaps hiring you do shoot something for them.
The Caveat: Photography is an expensive hobby to get into, especially if you don't have a camera. SLR cameras are the industry standard for professionals.
Painting: It costs you money for the materials, (canvas, paint, brushes, etc.), so why not make it back? If you paint, show your work to people! Your friends and family will be the first critics of your work. Ask around at restaurants or businesses that feature art and see if they'd let you hang or even sell your work. Also, see if a local gallery is accepting entries at upcoming shows. While pursuing more official routes, see if anyone you know through your art community connections is interested in acquiring a specific painting, and offer to do a commissioned piece for them.
The Caveat: Pricing can be difficult to determine. The size of the piece and the time it's in the business are big factors in pricing.
Teaching: Consider tutoring privately in a subject at which you excel through your local community college or university. Think about teaching cooking classes out of your home or repair classes in your garage. Using your home as the location for your hobby-turned-income stream can be advantageous due to low overhead cost and convenience, but make sure your space is clean and welcoming so you retain clients and get referrals frequently.
The Caveat: Many official teaching positions require specific credentials or certifications, but that applies primarily to scholastic subjects.
Coaching: If you have a deep knowledge of a sport or anything that is coached, consider calling county sports leagues to find about the teams or clubs that exist for children's sports. Ask if they have vacancies for assistant coaching positions (you want to start small), and ask if they're paid. Consider contacting schools independently or teams through a coach you already know.
The Caveat: You'll have to have a great deal of patience and genuinely enjoy imparting knowledge about the activity, not just actually doing it.
Music: You'll know you can give private lessons if you have the patience to instruct someone who understands much less than you. Want a venue gig? Starting a band is one way, but certainly not the easiest. Generally, cover bands get gigs more readily than original bands do. For solo instrumentalists, you may be able to find events or venues that will employ you once or even regularly. Call restaurants to see if they have an evening where they feature live musical entertainment, or check with fundraising events to see if they'd like live music during the event.
The Caveat: Teachers need to form a sort of curriculum for students. For performance, it's fairly typical for an event or venue to want you to have at least 2 hours of material available.
While an internship is a short-term way to test the waters as you explore career options, an apprenticeship gives you in-depth on-the-job training in the industry of the choice. It's a hands-on training program leading to mastery in your area of specialty. Here’s how to land one:
Scope out possibilities. Make a list of companies in the sector(s) you're interested in and start sorting them based on suitability. Talk to current and former employees and interns to find the best opportunities. Your school's alumni network can also help.
Impress. One you've narrowed down the companies you'd like to work for, it's time to sell yourself. Sure, this should be a learning experience for you, but if you want your foot in the door, you have to offer some value-added.
Negotiate your involvement. You may have to sell your employer on the idea of an apprenticeship and explain how it differs from an internship. While you can tailor your experience once you've begun, things will go smoother if you and your employer are on the same page from day one. Consider asking to sit in on meetings, rotate through different departments, work on a side project of your choosing, etc. Agree on the duration of the experience, your hours per week, and how vacations will be handled.
Don't hold out for money. Because an apprenticeship usually involves a much deeper level of commitment than an internship, it is usually a paid experience. But be ready for an entry-level salary. Most people are willing to pay tuition to learn things with little real-world application; be willing to trade money for access.
Once your apprenticeship has started, keep these tips in mind:
Be prepared to do grunt work. Someone has to get those copies made or those envelopes stuffed. If you attack menial tasks efficiently and enthusiastically, others will notice. But if you can't manage to, say, collate in a timely manner, why should anyone trust you with more important things? Don't be afraid to ask for more meaningful involvement, however.
Finish, then ask for more. If your boss doesn't know what to do with you or doesn't have the time to train you on a new task, ask if you can attend training sessions, read some reports, shadow someone else, or whatever might help you grow as an entrepreneur. Remember to respect your boss's decision and realize you cannot be privy to every action or bit of information.
Enjoy. Be open to new experiences and learning the difference between textbook processes and reality. Even if your experience doesn't turn out to be everything you hoped for, you will have peeled through some of those layers and learned things about the industry and yourself. And, who knows, your modern-day apprenticeship might be exactly the launch pad you need to steer you to greatness.
Starting any business takes know-how, time, capital, and connections. It also takes the right psychological makeup. While no definitive list of successful personality traits for entrepreneurs exists, research and experience indicate a few must-haves.
Self-confidence. Businesses fail a lot. And many that succeed do so only after years of not turning a profit. No matter what field you enter, you will meet complications--from family obligations to bleak finances, from gorilla-sized competitors to an anemic customer base. The challenges may be enough to leave people questioning their sanity, but the only way to succeed is to keep trying. Entrepreneurs have an unusually high ability to believe in themselves and their ideas independently of what others may think. Truly successful entrepreneurs know they must temper this optimism with realism: having faith in your goals does not mean turning a blind eye to your shortcomings or external obstacles. Can you harness the optimist in you to cheer you on relentlessly while having the self-assurance to handle criticism well?
Creativity. You don't need to have an incredible new idea to be successful (though it helps!) An entrepreneur can meet great success with a franchise or turn-key business, while many inventors never sell anything at all. Instead, the ability to see possibility should permeate every aspect of your business. Can you see opportunities where others see barriers? Can you find ingenious solutions to resource problems?
Discipline. Sure, being your own boss sounds great, but with great power comes great responsibility. Are you willing to work day in and day out with no one watching your back and no certainty of reward? Can you make yourself do everything that has to be done--the paperwork, bookkeeping, and grunt work--instead of merely focusing on the parts you enjoy doing?
Grit. Passion is one of those words that often gets bandied about by entrepreneurial-types. But while many businesses have launched on the strength of passion, many have failed when people discover that passion by itself is not enough. The key to success is grit, the potent combination of passion and tenacity. Grit allows people to believe in what they’re doing and relish the opportunity but also to slog through work--and setbacks--day after day. Gritty individuals know that they are in control over the outcome of their lives, and they are willing to do what it takes to achieve that outcome favorable.
So, how do you stack up? If you’ve got plenty of these entrepreneurial traits, fantastic. If not, don't fret--all these characteristics can be learned. Sometimes bright and talented individuals find they've never been appropriately challenged--and when they are for the first time, they have trouble dealing. The best remedy? Practice failing!
It's never too early to start planning for the future. This is especially true for future homeowners. Even if you have never thought about owning a home or think that you may never want to, it's smart to plan ahead just in case. Trust us--taking care with your finances now has the potential to greatly impact your ability to achieve your goals in the years ahead. Here are some tips we wish we would have known.
Credit Card Utilization
Lenders will want to see that you are not a financial risk when it comes to credit utilization. Generally, they'll want to see that you are not near your maximum credit limits; it is suggested that a healthy credit card utilization is less than 35% of your total credit limit for all of your credit cards.
While it's very important that you establish lines of credit in order to build credit towards purchasing a home, buying a car, etc., it's also imperative that you are able to prove to lenders that you are responsible with your credit and will pay them on time. Keeping your credit utilization low now will help you prove to lenders that you are a worthwhile investment when you apply for a home loan in the future.
Home loan lenders look at what's called your "front" and "back-end" debt-to-income ratios. Your front-end ratio tells you what you can afford in mortgage-related payments each month, which should not exceed 28%. To figure out your front-end ratio, multiply your annual salary by .28, and then divide it by 12. Your back-end ratio is your total debt-to-income ratio, including all of your debt, such as a mortgage, credit card bills, student loans, car loans, child support, etc. The maximum allowable total debt-to-income ratio is 36%.
One way to keep your debt-to-income ratio low and ensure that you won't need to over-utilize your credit is to build savings. Life is going to happen, and accidents and unexpected necessities are a part of life. Electronics die, cars break down, people get sick, pets need to be taken to the vet, and family members show up unexpected. No matter how much you plan ahead, you are inevitably going to need more cash than you have at some point. Building up a good nest egg of savings will ensure that you have it when you need it and don't continue to add to your debt. (For more tips on building savings for purchasing a home, see this ABC News article.)
Credit Scores/Resolving Credit Issues
A low credit score can keep you from acquiring a loan for a home, a car, furniture, and other large items that you will want throughout your life. While you will want to start establishing lines of credit to start building good credit, you also want to be very careful about how you use credit. Credit scores can make or break you. They can also influence the amount of interest you will receive and how large your down payment will be. Also, blemishes on your credit history can negatively influence your score for years, even if you have resolved them. Taking care to clear up any negative marks against you now will help immensely in the future. You can monitor your score for free at creditkarma.com.