Broke and... Single.

When you go from years of “us” to being on your own, it’s not just your personal life that changes.  Splitting the cost of bills, nights out, gifts for friends, and general life expenses suddenly become a huge one woman (or man) responsibility.  Cheap nights in spent cuddling on the couch and sharing a bottle of wine turn into expensive nights out in an attempt to socialize and not turn into a depressed, lonely hobbit.

So how can one be single and social without going broke?  That’s the question I’ve been exploring the last few weeks and here’s what I’ve found.

Share your story.  Everyone feels like poo after a break up, but it’s important to remember how many people love you.  Be open with your experience and those people will do everything they can to get you back on your feet.  A place to stay.  A warm dinner.  A drink.  Someone to talk to.  Enjoy and appreciate the love.

Be honest.  It’s weird to lay all your shit on the line the first time you go out with someone new, but if you want to date, and you’re pinching pennies, you have to be honest and up front about your financial situation.  Within the first two or three dates make it clear that you’re all for having a good time, but regular nights out of drinks, dinner, and a movie aren’t in your budget.  Brainstorm cheap things you can do together.  Not only might you discover something new and exciting, but you’ll lay a groundwork for your financial expectations going forward.

Coordinate.  Take on the role of social coordinator.  Instead of following friends to expensive bars and restaurants, be the one to make the plans.  Organize a potluck or host a game night.  If you want to have a night out, see if you can find a groupon, livingsocial deal, or restaurant.com discount for your favorite nightlife spots.

Cut yourself some slack.  As anal as I am about budgeting, there are times I just need to take a breath and treat myself.  I don’t want to make a habit out of it, but I’m not going to let my finances stand in the way of my happiness.  If you need a massage or a fancy night out with a friend or an elaborate, romantic date, go for it.  Just remember to keep track and make sure it’s not becoming a regular overindulgence.

It turns out single can be exciting, fun, and affordable too.

How I Started Choosing Stocks: A Clueless Novice’s Approach

While I tend to think of myself as being uber responsible and careful with my money, I’m strangely not overly cautious when it comes to my stock picks.  Thus far, it’s all worked out pretty well for me.  I’ve had anywhere from an 8%-25% return on my individual investments over the course of this past year.  Of course, my luck may change at any time, but I’ve got myself in the game, and that’s what I’m most proud of.

Like many of my fellow broke beauties, I was intimidated by the market. Let’s be real, I still am.  But I knew enough to know that my chances of growing my money were way better in the stock market than in the absurdly low yielding checking and savings accounts the banks were offering.  So after contributing the requisite amounts to my savings, checking, and retirement accounts I decided to set aside some “experimentation funds”.

I opened an account at a brokerage with $1,000 and decided to split that money between two stocks.  $1,000 was as an amount I could “afford to lose”.  Like the money you walk into the casino with.  In truth, I’d be devastated if I lost $1,000, but I know it’s an amount that won’t destroy me and it’s enough to get my feet wet in the reality of the market. 

So onto the stock picks.  I wanted to invest in companies whose product I used, whose message I supported, and whose potential for growth I could visualize.  I thought about the products and services I use every day and the brands I’m loyal to.  I settled on Amazon (AMZN) and Whole Foods (WFM).  I looked up their ticker symbols and saw they were both priced near their 52 week low.  With totally random, unscientific reasoning I decided they must be a good deal and bought my respective shares of each.  Like I said, not overly cautious but it got me started. 

Just by having my own money in the stock market, my desire to read and learn as much as I could grew ten fold.  I found new ways to save and cut back expenses so I could set more aside and use my newfound knowledge from books, articles, and blogs about the maket.  All of the sudden, just by experimenting with $1,000, I was not only invested in stocks but in the reality of my financial future and my own financial education.  I put aside more money for savings, more for retirement, and more for my stock portfolio. 

There is an attitude of “I’ll figure it out later” or “someday” with the young and broke when it comes to investing.  And while stocks will often dip and sometimes fail, I think the real mistake is not getting involved at all, especially when time is on your side.

I went on to buy Facebook (FB) at around $21/share this summer.  It dipped to about $17/share in the fall and stayed there for a while.  Now it’s around $30/share.

My AMZN, which I bought last year around $185/share, is now up around $270/share.

My WFM was around $85/share when I bought it, it went up to about $100/share this summer, now it’s back down around $88/share.

My recent purchase of Apple (AAPL) at about $535/share is down around $503/share now.

While I’ve been weathering the ups and downs of each stock, I’m not stressed.  I believe in each company I hold.  I’m not running to ditch AAPL or WFM.  I’m 26 years old, I’ve got plenty of time for those shares to rise.  What’s important to me is that I’ve made the decision to face the reality that is my finances by getting started and learning everything that I can to make my money work smarter, so that I don’t have to work harder and longer.

Start trading. Start learning.  Start earning.

https://www.tradeking.com/node/30195?ADTRK=sr-RAF90-t-05dhkod08clmf

Resolving to Save

Did you resolve to save more money in the New Year?  It’s a common resolution.  It’s also common for people to break their resolutions.  Chose to succeed by committing to your financial goals and following some simple savings strategies.

1.    Track your spending.  I’ve said it before and I’ll say it again.  Until you see how you’re spending, you won’t be able to assess how you can cut back and save.  Write down every purchase, every penny.  You can use a spreadsheet, your phone, fancy financial software, or the back of a napkin.  As long as it’s all in one place for you to see, you’ll be able to get a picture of your spending; what’s necessary, what’s not, where you’re overspending, etc.

2.    Make a Plan.  Be specific.  How much do you want to save this year?  Divide that number by 12, that’s how much you have to save each month.  Once you’ve tracked your spending you can decide where that money is going to come from.  If it helps, break it down even more.  Divide it into weeks, even days.  Saving an extra $3,000 a year may sound daunting, but when I break it down to $8.22 a day, it’s a number I can manage.  Packing lunch and skipping Starbucks.  Done.

3.    Substitute New Behaviors for Old Ones.  It’s all easier said than done.  I can sit at home writing out the perfect plan, but unless I can put it into action on a daily basis it won’t do me any good.  Beware of habits.  The daily purchases you make just because they’re the purchases you’ve always made, things like coffee and lunch are probably the most common, but also things like water, cigarettes, snacks, drinks, etc.  If you find a recurring expenditure when you track your spending, figure out if there’s a way you can cut it out, replace it, or reduce the cost.  Know exactly what new habits or routines you need to establish to make these new changes.  For example, getting up early to pack lunch instead of buying out or scheduling potlucks instead of meeting friends out for drinks and dinner.

4.     Pick a Cause for your Savings.  There are times when going out for drinks after work or ordering takeout will sound unbelievably tempting.  Breaking the routines and habits of spending on the little luxuries will be difficult.  To help you stay focused on your larger goals, pick a cause for your savings.  My extra $3,000 (or whatever number you decide on) in savings this year is going to help me buy my first home, or set me free from student debt, or allow me launch my new career.  By attaching a relevant and personal dream to your savings, you will give your goals the meaning and urgency you need to trump short term, fleeting desires.

5.    Track your progress and go public.  Acknowledge your successes.  Measure how far you’ve come and let it get you psyched to save more.  Share your progress with family, friends, and social media.  The more you put it out there, the more accountability you’ll develop with yourself and others to stay committed to achieving all you’ve set out to save.

May it be a prosperous and successful New Year!

5 Quick, Cheap, and Easy Holiday Gift Ideas

Stumped for gift ideas?  Strapped for cash?  Here are 5 simple, practical, do-it-yourself gifts you can have ready in time for the holidays without breaking the bank.

1. Homemade Body Scrub.

Skip the overpriced bath and body stores and stop by your local grocer to pick up a few key ingredients.  Mix it all up in some mason jars from the thrift store, wrap it in a bow, and you’ve got a great, practical, and long lasting gift for anyone.

Here’s a sample recipe.

2.5 cups sugar in the raw

¾ cup white granulated sugar

4-5 tablespoons of vanilla, almond, OR orange extract

¼ cup almond oil

2. Ready Meals: Pasta in a Pot, Breakfast in a Basket.

It’s all about the presentation.  Grab some festive trimmings, a few basic ingredients (ex. dried pasta, jar of sauce, block of cheese), and throw in a basic kitchen tool (ex. pot, grater) and you’ve got an adorable holiday feast.

3.  Teacup Candles

Pick up an assortment of tea cups from the thrift store and melt down some old candles on your stove.  Paste a new wick to the bottom of each tea cup and fill them up with the melted wax for a pretty, unique, and practical present.   

4. Bread (or brownies or cookies) in a Bottle.

Layer the dry ingredients of your favorite baking recipe in an empty milk bottle or mason jar.  Paste on a cute label and directions for baking and you’re good to go.

5. Garden Kit.

There’s nothing like having fresh herbs for my cooking year round.  Give the gift that keeps on giving with a small planting pot, a bag of seeds, and a pair of gardening gloves. 

Happy Holidays!

SEASONAL SPENDING: The "Giving" Account

When people budget, if they budget, they generally think about their expenses on a monthly basis- rent, transportation, food, cable, insurance payments, etc.  What they often fail to do is take a step back and consider major annual events that change spending in certain months or times of year.  The best example is the winter holidays.  Sure, you can just charge all your holiday expenditures on credit, but do you really want to spend the first weeks and months of the New Year paying off a couple frantic days of shopping in December? 

What I’ve done in the past few years is set aside 5% of my paycheck in a separate account for “giving.”  That 5% applies to every paycheck I receive.  While I pull from this 5% throughout the year on birthdays, Mother’s Day, Father’s Day, etc- I know that come December there needs to be enough to account for all of my holiday shopping.  Around Thanksgiving I can take stock of how much is left in my “giving” account and budget my gifts appropriately.  Some years are better than others and that’s ok.  Some times you have to opt out of a workplace “Secret Santa” to get your parents that something special for Christmas.  But if you’ve been saving all year with the big holiday in mind, you’ll know exactly where you stand come December.

As with savings accounts and retirement accounts it may be easier to set up a separate “giving” account at your bank and have that 5% automatically deducted from each paycheck and put into the account.  The less you have to deal with the money, the less likely you are to spend it prematurely.

Now if you’re truly feeling broke, feel free to adjust the percentage as needed.  Contribute 1% or 2% of each paycheck and spend the rest paying down your debt or building up that emergency fund.  No matter how dire the situation, I encourage you to put down SOMETHING, just so when the time comes, you’re not racking up more high interest debt on another credit card.  Your spending limit is strictly set by what’s in the “giving” account.

While you shouldn’t spend a penny more than what you’ve saved in the “giving” account, feel free to spend less.  Use the extra money to contribute to your 401k or make an early payment on your mortgage.  Also consider events at the start of the coming year.  If you clear out everything in December, there won’t be much to give in January.  Lastly, “giving” doesn’t only apply to your nearest and dearest.  Charitable giving and donations also come out of this account; so if you’ve had a good year, maybe share some of the excess with those in need.

Happy Giving!

10 Ways To Pocket Your Per Diem

If you’ve ever been sent out of town on business, you’re probably familiar with my favorite form of income- per diem.   Per Diem is an allowance for the daily expenses incurred while traveling on business.  The best part- it’s tax-free and you get to keep any leftover money you don’t spend!   Here are some ways to cut down on travel expenses and pocket that per diem for later and better use.

1. Sublet your apartment.  If you’re going out of town for a significant period of time there’s no reason to waste rent on an empty space.  Post in Gypsy Housing, a popular facebook group for short and long term sublets, or use airbnb.com to find a sublet for as short as a weekend.

2. Reach out to family and friends.  Don’t be shy, even if it’s someone you haven’t seen in years or some distant relative or family friend, chances are they’ll be thrilled to have someone to host and show around town.  By staying with friends and family you knock out your biggest expense- hotel stay.  And families, being the wonderful thing they are, will likely stuff you with delicious home made goodness so you can save on some meals too.  A nice bouquet of flowers and a thank you card will be well worth the savings.

If you do stay at a hotel, be sure to sign up for their rewards or loyalty program.  I’ve taken two vacations with points I’ve earned while traveling on business.

3. Ask the locals.  When I first arrived in Boston, the restaurant menus gave me sticker shock.  Then I thought people visiting New York must feel the same way; I just know where to go when I’m in New York.  Ask people who’ve lived in or visited the area, ask the locals you’re working with, or ask the hotel concierge for affordable dining and activity suggestions that suit your taste.

4. Bring Breakfast. If you’ll be out of town for more than a few days, hit up a grocery store as soon as you get there to load up on your AM staples.  My favorites are bread, peanut butter, honey, and banana.  Along with a tea bag and some water boiled in the microwave, it’s the perfect way to start my day.

5. Make Lunch the Big Meal of the Day.  Most restaurants have discounted lunch prices or offer excellent lunch specials.  If you want to go out and taste the local cuisine, consider doing it at lunchtime rather than dinner.  Not only will you cash in on the midday specials, but you’ll probably get more than enough food to take home for later.

6. Microwave Meals. By picking up a few grocery items and “cooking” at “home”, you can save A LOT.  I once spent 3 days in a city living off one small trip to the grocery store- bread, peanut butter, apples, turkey, cheese, baby carrots, peppers, hummus, frozen veggie burgers, and a package of frozen burritos.   Ah, the gourmet ways you learn to utilize a microwave when you have to live off $55/day ;)

7. Stock up on Freebies.  If your hotel has any freebies (fruit, yogurt, tea bags, honey packets etc) or if you’re served lunch or snacks on the job, be sure to pocket some for later.  As soon as I saw the leftovers from catering one day, I ran out and bought myself tupperware to pack up some meals for later.  Don’t forget to grab some extra plastic forks and spoons, they’re always useful.

8. BYOB.  While spending a night on the town is a great way to socialize and see a city, consider spending some nights in.   Host a “bring your own beer” happy hour or game night in your room.

9. Walk or Take Public Transit.  Walking is one of the absolute best ways to discover a city.  Pick up a free map at your hotel and make sure you ask about any areas that are to be avoided.  Most major cities also have excellent transit systems.  If you can ride the bus or subway in your hometown, you can do it anywhere.  I spent 4 weeks working in Hong Kong and commuting on their subways.  If anything, they were cleaner, faster, and more frequent than NYC.  And I saved a ton by avoiding taxis.

10. Use the Web. To find out what’s in your area search yelp.com for information and reviews on everything from the best pubs to cheap spas. Try a google search of “Free and Cheap Things To Do in {fill in the blank} City.”  You can also find great deals for almost any city on sites like groupon.com, livingsocial.com, and restaurant.com.

Being away from home can sometimes leave you in a vacation mindset when it comes to spending, even when you’re out of town for work.  While catching a movie every now and then or getting a taste of the local flavor at a piano bar can be fun- entertainment is expensive and adds up quickly.  Don’t deprive yourself of experiencing the places you go, but don’t use “being away from home” as an excuse to overindulge and consequently, overspend.

Happy travels and happy savings!

THE MONEY DIET

I’ve found that learning to live fiscally wise is like learning to live healthy.  Crash dieting doesn’t work and neither do get rich quick schemes.  What works is a total lifestyle change.  In dieting, it’s learning to develop a health conscious mindset and implementing that mindset in the form of healthy eating and exercise.  Allowing yourself the occasional piece of chocolate cake or pint of beer but knowing it’s all in moderation.   The same goes for spending.  We need to develop a mindset that defines our true necessities and make sure our spending is in line with what we actually need and value with splurges like going out to eat and drinks in the city in moderation.

            There’s an interesting book called The Millionaire Next Door by Thomas J. Stanley.  In it, the author takes a close look at the lifestyles and spending habits of millionaires.  Millionaire being defined as someone whose net worth is over one million dollars.  What he consistently found was that with the exception of a small percentage, the millionaires lived fairly simple lives.  Instead of leasing the latest car model they typically owned their vehicles for long periods of time. They didn’t join extravagant country clubs with exorbitant fees.  They sent their children to good public schools, rather than expensive private schools.  You get the idea.

Note that millionaires are not defined by their income but by their net worth.  In other words, all their assets (home equity, stocks, cash, artwork, etc) minus all their liabilities (credit card debt, student loans, etc).  You can have a six figure income and be netting zero, and conversely, you can have a modest income and be a millionaire.  The lesson is that those who live within their means and plan for their financial present and futures are those with the greatest net worths.

            These millionaires have mastered the finance diet; finding a lifestyle that balances the necessities and luxuries through financially profitable AND financially scarce times. 

            Just as keeping a food journal can keep you on track for weight loss so can writing down your spending.  Once you’ve got it all down on paper you can see where it’s going and assess whether you’ve “oversplurged” on some luxuries or whether you need to save more to pay down your debt or whether your shopping habit is keeping you from reaching the financial goals you’ve laid out for yourself in $$$ Dreams (post from October 29th).

            The following is a list of online resources that can help you track your spending and develop a budget.  You can even link your bank and credit card accounts to many of these sites so that they automatically track your spending for you.  Just be sure to manually input your cash purchases.  Bonus: All these services are free!

-       Mint.com

-       Buxfer.com

-       BudgetPulse.com

-       MySpendingPlan.com (Does not link bank accounts, etc.  All entries must be made manually)

            You can also chose to keep track of your spending on a simple spreadsheet.  With this method you can customize your spreadsheet to your specific budget plan.  I will be offering customized spreadsheet and budget templates for those who don't feel comfortable sharing their banking information with a website.  Email here for more information.

As we approach the New Year and the time for resolutions, let’s remember that diets aren’t only for waistlines and that a little adjustment in spending can mean a big payoff in reaching financial goals.