Tag Archives: Finances

Breaking Out of a Rut Without Going Broke: Financial Tips for Career Transitioning

 

I’ve recently come to realize I’ve lost something I’ve had my whole life. Something that some, if not all, people never have. Direction. I didn’t really appreciate it until it was no longer there, like most important things in life. For me, it is science.

Science has been an inevitable, magnetic pull as far back as I can remember. I never even hesitated when people asked “What do you want to be?” or “What will you major in?”

Biology of course.

There are other things you can study and do? Who knew.

Biology in action.

Therefore, my whole life thus far has been laser-beam-focused on science. And I’ve certainly achieved my objective. From four different lab internships throughout undergrad, to a published masters thesis, to a PhD candidate position on a top medical campus, I’d say in terms of ‘doing science’ I have succeeded so far. 

Problem is, one day I realized that magnet was getting weaker.

And I fought it. I tried to re-focus, to think about it differently. But it faded away like a sunset, leaving the darkness of confusion in its wake. That thing which defined me, drove me, inspired me; now there is no pull. There is no sense of purpose, no goal to strive for.

Now what

I’m very fortunate that my parents taught me how to manage money from a young age. I started my first savings account at 13 with my meager allowance. I had many a lemonade stand and bake sale, babysat as soon as any parent would allow me, and had a part time job at a roller rink by 15.

My dad made me a deal to pay for half of my first car, and by the time I had my license in hand, I’d paid cash for a cute little green Saturn. Throughout college and my masters degree, I worked two jobs to cover rent, food, gas, and books. My high test scores had rewarded me with a full tuition scholarship. Because of this life-long money awareness, I made it out of six years of school with less than 1/3 the average college debt. 

I will be forever grateful to my parents for those lessons in frugality and saving.

Those lessons are ones I continue to apply every day in my life. My savings account is by no means impressive, but it would be enough at this point to allow me to be unemployed for about 5 months without changing my lifestyle one bit. If I cut back dramatically I could probably stretch that to 8 or 9 months. That is such a peace of mind when looking at a possible huge life change, like a major career transition.

As if the thought of not having a job weren’t stressful enough, I just think how much worse it would be if I literally needed that paycheck to pay my necessary bills. And I know a lot of people are currently in, will soon be, or have been in that exact situation, and my heart goes out to you.

If you are, or think you may soon be in a career transition situation, I have a few pieces of advice you should consider now to make it easier when that day comes.

1. Pay yourself first.

This is the most important rule of money. You pay your landlord rent, you pay the dealer for your car, you pay the grocery store for your food, you pay Uncle Sam his taxes. Why would you not pay yourself? After all, you are the one doing the hard work at whatever your job is to bring that paycheck home.

Statistics from December 2013 reveal that 40% of Americans are not saving for retirement, while 25% have no savings at all. That is a very scary thing. And when you pay all the required bills, there is not much left over for silly things like, say, food and gas. I understand. But that’s why it’s imperative you save 10% first

Use automatic transfers to make it easier. On the first of the month, just take 10% of your paycheck, whether that is $10 or $1000, and transfer it into a savings account.

It may be slow, but over time it will build. And you will find that you can still make it to the end of the month. Maybe you will have to cut out a trip to the store, or a movie night. But think how much better you will sleep at night when there is a cushion of cash you can call your own.

2. Scale back on non-necessities.

If you know for a fact that a period of transition is coming up, scaling back on your lifestyle can make a huge difference between being comfortable and feeling squeezed. If you know you will be transitioning to a different field, might be unemployed for a few months, or will have to take a lower paid position, try to estimate how your income will change and start living off that lower amount now. Save the difference

Maybe cut back on eating out, going to happy hours, or buy fewer groceries, and stop smoking now. Find ways to minimize the cost of things you like to do. Go to a matinee on Saturday instead of a Friday night if you like theaters. Have a potluck game night with friends rather than going out to a dinner. Host your own wine tasting; $30 goes a lot farther at home than in a club.

3. Make a budget and stick to it.

The first step here is to figure out how much you are currently spending. For one month, track every cent that leaves your accounts. You can do this by hand, or try using an online tracking tool like You Need a Budget or Mint.com. Here’s a handy article I wrote on using Mint if you’re new.

The next step is to figure out how much you want to or should be spending in these categories. Things like rent/mortgage, car or loan payments, and utilities are rather concrete. Focus on categories you have control over, such as entertainment, hobbies, gas, and groceries.

Find more great tips in How to Make & Stick to a Budget.

4. Learn to cook, and cook at home the majority of the time.

Eating out can cost $5-$15 for lunch and $10-$20 or more per person for dinner. If you have lunch with co-workers every day, and dinner at a restaurant 2-4 times per week, that is a significant expense. It will save you hundreds per year if you cook your own meals at home. Obviously I am a huge proponent of learning to cook! 

In the archives here you should find plenty of simple, cheap meals as inspiration, and the internet has seriously infinite ideas. Even just picking up a loaf of bread, peanut butter, and jelly will give you two week’s worth of lunches for less than you probably spend in one day eating out.

If you don’t think you have time to cook, check out my 10 Minute Chili Mac, Fancy Ramen Soup, or Easy Steak Stir-fry. Search “less than 5” here for meals that cost less than $5, take less than 5 minutes, and require less than 5 ingredients.

For even more tips on getting your grocery bill as low as it can go, check out How to Save Money on Your Grocery Bill.

5. Find frugal entertainment & frugal friends.

 

If your social circle is based on events where you are pressured into spending money, then you need to start branching out. Big trips, buying ‘toys’ like boats and golf clubs, and going out drinking cost you big bucks. Try new hobbies that don’t require money, like taking up jogging or walking, join a book club, hike, start a garden, or find a local sport club.

You could entertain yourself with a visit to the park, your local museums, or volunteering. Help Habitat for Humanity, your local church or soup kitchen, or go to Volunteer Match to find something that fits your interests in your area. You can get involved in your community, help people, and meet new friends along the way.

More ideas on cheap/free hobbies:
23 Fulfilling Hobbies You Can Start Right Now from Thought Catalog
The Only Thing You’ll Need to Spend is Time from The Simple Dollar
100 Cheap Hobbies – Spend Time Not Money from Free in 10 Years 
The 35 Best Ways to Spend Your Free Time (Frugally) from WiseBread 

Job transitioning articles:
When Your Dream Job Disappoints, How to Find Plan B from The Wall Street Journal
Don’t Burn Bridges: 10 Ways to Maximize a Job Transition from Monster Working
Transitioning From One Job to Another from Business Insider
Advice for People who Want to Quit Their Jobs from Thought Catalog

This post began with the intent of giving tips for making a career transition easier, but these tips are applicable to any stage of life. If you start incorporating these ideas into your daily life, you will notice your bank balances going up, maybe your debts going down, and your worries starting to ease. You may even find a whole new world of things you didn’t know existed, and make new life-long friends.

Though a career transition is scary, being prepared can help make it easier. The more you have saved, and the fewer your bills and expenses, the more comfortable you will feel financially. Then you can focus on perfecting that resume, building your network, and polishing your interview skills instead.

I have no idea where I will go from here, but I know that having some money in the bank and minimal expenses makes it a lot less scary to not know.



Have you ever transitioned between careers? What advice do you have?

The Most Important Rule of Money: Pay Yourself First

 

Let me begin by saying I am not a financial expert, nor do I have financial training. I am not a CPA, an investment banker, or a tax expert. I am just a normal American, still in school, with a job (sorta), who has read a lot of finance blogs, books, and articles. I apply this one rule to my life every day. And I am in a fairly stable position. I can manage my monthly expenses, and have a small amount set aside for retirement and savings. I’d like to share with you the most important rule of money I ever learned.

My main financial training came from my parents. My father set each of us kids up with a savings account at age 13. We were taught how to balance a checkbook, and how interest works for or against you. I was given a book that remains the cornerstone of my financial outlook on life. That book was “The Richest Man in Babylon” by George Clayson (free audio version on YouTube). It is a simple fictional story of life in ancient Babylon, and how the richest man tried to teach the people how to also become rich.

The number one rule of how to begin growing wealthy, is this: Pay Yourself First. All other things will build upon that rule.

But what does that mean? An article from About.com says: “Money, like water, expands to fill the container in which it is placed”. This means that if you set a goal for your money, and take steps to get it to that “container”, it will eventually expand to reach that amount. But if you don’t have goals and a plan to reach those goals, you are likely to reach the end of the month with no more money than you began with. Many Americans are living paycheck to paycheck, 75% by some estimates! But it doesn’t have to be that way.

The Road to Financial Freedom

It will not be easy. If it were, there would be no debt and everyone would be wealthy. It will require discipline. It will require sacrifices. But it is more than possible. If you are determined to get out of debt and/or become financially stable and eventually wealthy, start taking these steps right now.

Step 1: At the beginning of the month, before paying anything else, pay yourself. Try for 10% of your take-home paycheck. If you feel that is too high, begin with 5% and work your way up. But DO IT. Take that 10%, whether it be $10 or $1000, and put it into a savings or investment account. Even if you can’t ‘afford it’. If after that, you pay your other bills and come up short, write down by how much.

Step 2: Find a way to make up the difference; increase your income and/or decrease your expenses. You may need to work a few extra hours, pick up a side job, sell some things, or give up a few perks. But ask yourself, are immediate gratification items worth lifelong financial bondage? Is it worth going out for dinner or drinks to always have debt hanging over your head? Pay yourself, then do what it takes to make up the difference this month. Then do the same next month.

Step 3: Reduce your ‘extra’ expenses. Anything you do not require to live is extra. Rent/mortgage, utilities, and basic food. Besides that, do what you can to cut back. Maybe take the bus or carpool instead of driving, eat in all week, stop going out for movies. Make it a game and see how low you can get your spending to go. This is where budgeting comes in. Create a budget of how much you want to/can afford to spend in certain categories each week/month, and follow it.

Step 4: Build up a solid emergency fund. For a typical single individual, you probably need about 3 month’s expenses. If you have children, plan for an extra month per child as well. This would help cover things like doctor visits, sickness, car troubles, job loss. It will give you a huge comfort knowing you have some money saved and so small life problems won’t totally derail your financial life. This emergency savings is the beginning seed of financial freedom.

Step 5: Once you’ve built up an emergency fund, invest your personal paychecks. Keep that 1-3 month fund in something liquid like a savings account, then start using that 10% per month to invest. Open a 401K or money market account, and start investing in your future. Pay down debts, or buy stocks/mutual funds/bonds/real estate. Educate yourself on investing options, and play it safe until you learn the ropes. Don’t believe ‘get-rich-quick’ schemes or you’re likely to lose your carefully guarded nest egg. This money is the seed you hope to grow into a tree of wealth, a bad investment will rip it up by the roots and you will have to start all over. Continue to ‘water’ it with monthly investments, and over time you will see it grow.

Though this can be so very difficult at first, over time paying yourself first will become natural. You will start to feel a great sense of pride and accomplishment as you watch your balances grow and your debts disappear. You will start to enjoy living more frugally, because it means you have more left over to add to your savings and investment. Best of all, you will rest easier knowing that if an emergency arises, you can easily take care of it, and your future retirement will be more comfortable. Don’t wait another day, set up that direct deposit and take the first step down the road to financial freedom today!


More articles on Paying Yourself First:
Pay Yourself First: What It Means and How to Do It from Wisebread
Pay Yourself First from Get Rich Slowly
What Does Pay Yourself First Mean from AboutBudgeting


Do you pay yourself? Any advice to get started?

How to: Save money on your grocery bill

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Groceries are a fact of life. Unless you are one of a VERY small minority, you do not raise and/or grow all the food you eat. Also I’m sure there are people out there who never cook their own food, but rely on take-out and fast food for daily nutrition. That blows my mind of course, because I find such joy in cooking, creating, and enjoying homemade meals.
There aren’t many things more exciting to me than to bring home a big load of groceries for less than I intended to spend. Every time I go grocery shopping, I have a certain number in my head that I am allowing myself to spend. If I get everything I need for the week for less than that number, I am excited. If I go over that number, I just know I need to plan better, or have better impulse control, next time. 
 
My plan of attack when it comes to grocery shopping is always the same. It comes down to:
1. Knowing what you use most often
2. Paying attention to sales & in-season produce
3. Price comparing between a few stores
4. Buying generic or store brands
5. Making a budget and sticking to it

Know what you use most often

To know what you use most often, simply pay attention to what you run out of the most. What types of foods do you and/or your family want to eat often? Do you make a lot of pasta? Maybe cereal disappears within a day. Is there a tradition in the family like Taco Tuesdays? Noticing what you use often will help you plan around sales and stock up on staples. What I use most hasn’t changed much over the past few years: rice, canned diced tomatoes, canned beans, frozen mixed vegetables. These things make up the bulk of my weekly diet. I don’t know that I’ve ever gone a week without eating each of those things somehow.

Pay attention to sales & in-season produce

Sprouts Farmers Market is a place I go often because of their amazingly cheap produce. I get weekly salad greens, fresh fruits and vegetables there. Most staple items like bread, tortillas, canned goods, etc, comes from King Sooper or somewhere else. Which reminds me, if there is something or certain kinds of food you need a specialty store for, keep them in your rotation of ads to watch.

All this produce was under $30! And most of that is just their everyday low prices, not bargain sales. However, most grocery stores will greatly discount whatever produce is in season, because they have a lot of it and it needs to sell before it goes bad. Pay attention to what is in season, and maybe try a new fruit or vegetable you’ve never had that’s on sale. You may have found a cheap new favorite!

Price compare between stores

Every week I get ads from at least seven different stores. I have a few favorites that I pick out, the others I discard because they are too far from me or for some other reason I don’t shop there. Typically Sprouts Farmers Market, King Soopers, and Albertson’s ads get saved and looked through.

I will sit down and look through each ad quickly, circling items which I know are a good deal, or which I use often and are on sale. Then I compare amongst the three which has more deals that week. Sometimes I will go to all three if the deals are worth it, usually I end up going to only one or two with the most things I want to buy. 

When there is a really good sale, I mean one that you only see once or twice a year, I will stock up. For example Albertson’s sometimes has “buy one get two free” sales on meats, or King Soopers often has 10 for $10 sales. I know how quickly I go through my pantry items, so if kidney beans are 50 cents, I will be bringing at least a dozen home. Because they usually are 69 cents, which saves me 19 cents per can. That may not sound like much, but it’s little things like that, added up over years, that makes a big difference in bank account balances. 

Buy generic or store brands

If you are a loyal brand-centric consumer and you don’t trust generics, start small. Try the store brand of flour, or salt, and cook with it. When you can’t tell the difference, try some granola bars or oatmeal. Pretty soon you will see what items you can’t tell the brand name from generic and which items are really different in quality. By this point, the things I refuse to buy generic I could probably count on one hand, because there just isn’t enough of a difference in quality for me to justify the price difference. And that saves me hundreds every year!

Make a budget & stick to it

As mentioned earlier, I look at a budget as a game. It is a number I set in my head, based on how much I think I’ll buy, that I try to beat. If I find some deal or coupon that brings down my total, I have a better chance of winning. If I plan and price compare, I have a better chance of winning. The lower the total at the register, the higher the total in my checking account!

You can read more in my earlier article on making a budget & sticking to it, which includes how to add in all the things you spend money on monthly, not just food.


I have read tons of articles that advocate for making a weekly or monthly meal plan, stressing those items on sale that week, and then buying only those things you need to complete the plan. I am not quite that organized to pull that off yet. Instead, I have a rotation of meals that I know I love and can make quickly, which all use the same basic ingredients. Then I add in a few meals I’ve found recently that I want to try making, or if there is an event coming up, I’ll add any items I need for those things to the list. 

If I’m feeling extra over-achieving, I will even split the list into types, like “dairy”, “carbs”, “produce”, etc.  to make navigating the store easier. But if I don’t get around to it, I don’t beat myself up. And almost every week for several months, I get more than enough groceries for under $100. I’m sure I could pare that down to half or less, but I also enjoy cooking new and more expensive foods now and then, and experimenting with things for this blog. 

Anyhow, if you normally only grocery shop when there’s nothing left in the house but a can of spaghetti-os and some green sour cream, try these simple steps. Check around and price compare, make a list before you go, then pick up only those things on the list. Short, sweet, and you can be sure you’re saving yourself some cash. You can look over those grocery receipts and smile.


How often do you shop for food?