Mortgage foreclosures, market crashes, billion dollar bailouts. Those are the topics dominating the headlines recently. Those preparing to retire are losing their entire life savings in the stock market, companies are letting people go left and right, and parents are unsure if they'll be able to pay for their child's college education. Big problems. But what's this so-called "recession" like for the 25 to 35-year-old? How are people who have no spouse, no children and no one to support but themselves handling the financial crisis—and are they even being affected at all?
I myself am very lucky, and I'll say that up front. I live in New York City, I have a good job, and I have very few expenses. I pay rent and bills, and then most of the rest of my money goes towards food and entertainment. I don't have a car, I don't have student loans, I have very low and manageable credit card debt. Again—I am very lucky, but even I'm starting to get a little freaked out by all the economic problems swirling around. I have tried to pull back on my spending and pay down my credit card immediately to avoid any excess money leaving my wallet for stupid reasons. I'm just starting to realize that I better be smarter with my money if I want feel secure in the future.
So I decided to do a little research and reach out to some of my friends and family in my age range to see how they keep down their costs and try to save cash. Some live in NYC, some are in other states. Some single. Some married with or without kids.
My buddy Pierce lives in NYC with me. His main tactic for staying in good financial standing is planning ahead and sticking to a budget. "I have a spreadsheet for the entire year of fixed expense (phone, student loans) and then I usually allot myself a certain amount of play money each paycheck. " he says. Seems like a good idea to me! Pierce also does something that I do, which is save all my change and exchange at the bank, but he takes it one step further. "All the change I get I stick in a jar and when the jar is full, I go to Commerce Bank and change it. That money gets thrown into a brokerage account which I can then invest if I so choose." Savvy. I personally don't have anything invested besides my work 401K, but this seems like a great strategy for building up some investment money—if you're strong-willed enough to only use it for that!
"I cut coupons like a maniac!" was how my college friend, Lauren, said she saves dough. "The Sunday paper is a great source for coupons. Yesterday, my bill at [the grocery store] was $36.72 before coupons and $25.66 after coupons. 32 oz. Powerade was on sale for $1.00 each and I had a 75 cent off coupon. After the doubling, it was free!" Lauren also admits that she tries really hard to avoid things just because they're on sale. Wise words! She also shared with me the site Restaurant.com, where you can buy $25 gift certificates to local restaurants for $10. I'm not sure how it works, but it does!
My cousin Erin is married with a 1-year-old daughter (Maura!) in Pennsylvania. She also takes advantage of coupons and sale prices, plus prices out items at Costco to see if it's cheaper to buy certain products in bulk. She keeps an eye on different online shopping sites for sales and offers like "free shipping" and purchases things when the price goes down.
Something that I'm completely immune to is the ever-skyrocketing price of gasoline (thank you, MTA). Both my cousin Erin, and my other cousin Emily say the cost of driving kids around and running errands is one of the biggest concerns. Emily says that she's had to cut down on the number of family trips to save cash. Erin combines her errands into one trip. "I limit my driving around in the SUV. I take Maura once a week to the babysitter, and that is the day that I run my errands." She chooses to walk instead of drive when she can. "When [Maura and I] are home together, we walk (correction, I walk, she rides in the stroller) to the drug store for any items that we may need. We also are within walking distance to the post office and the bank. What more could I ask for?" Not a bad set up, Erin!
It seems than many younger folks are taking simple, obvious steps to saving a few bucks. While I say these are obvious, I still don't think many people (including myself) think about it enough. Having self-control with money is hard, especially when it comes in the form of daily Starbucks runs and Saturday nights out. Little things add up quickly.
My friend Eric from Philadelphia has taken the idea of budgeting one step further. He uses a web site called Mint.com that allows you to input your account information and budget ideals and it maps and charts all your spending a saving out for you. A real way to see just where all of your money is going, and how you can readjust your spending so you are being wise with your cash. I recently just found out that my bank, Bank of America, has a similar feature that lets me see how all my spending lays out. Both fun and scary... Apparently I withdrawal a lot of cash from the ATM!
Speaking of ATMs, Eric also does something a little radical, but very interesting. He's taking the hard approach to budgeting; doing something that is specifically recommended for people who don't see the reality of money (not that you have a problem, Eric!) He withdrawals a lump some of cash from the ATM at the beginning of the month, and then doesn't allow himself to make anymore withdrawals for the rest of the month. This forces him to work with tangible, cold, hard cash so he can actually see the money disappearing when he spends. If that doesn't cut back on your spending, I don't know what will! I imagine a lot of people wouldn't have the self-control to stick to this strategy.
So... Are you feeling the pinch or sitting back and relaxing? Have you made any adjustments to your spending? Got any good tips or sites for us to check out? Leave a comment!
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