I love this story in the WSJ about how the author's daughter lives frugally in NYC and manages to save $5K while making $30K. Many of the tricks that she uses (eating lentils and other non-meat, non-processed filling foods) I have used for the last few years to get me through grad school and also last year to pay off my loan. When I look at my list of don'ts that I made in early 2008, it's pretty impressive. And now the don'ts feel natural (for the most part) so I don't spend money on these things, but don't miss them. Really, clothing is the only thing that I'm having a bit of a spending backlash on. So to people who say you can't save $ in NYC, you've just got to re-set your expectations as to what is "normal".
My Spending Rules/Don'ts
Spend less than 2K a month on rent
Don't take taxis
Don't get manicures, pedicures, waxes, facials or massages (or at least not regularly)
Don't buy clothes or shoes
Don't buy makeup
Don't order takeout food
Don't have a home phone
Don't pay any banking fees
Don't go to concerts
Don't own a car, pay for gas or car insurance or parking
Don't rent cars
Don't buy lunch out
Don't buy furniture or other home decor items
Don't buy books (use the library)
Don't buy napkins, other paper products or cleaning products (not good for environment anyway; obviously tp is an exception to this rule!)
Don't buy jewelry
Don't buy meat or processed foods
Don't buy wine that costs more than $10 a bottle
Monday, January 25, 2010
Sunday, January 17, 2010
Savings Strategy
Now that I received my bonus (a little more than last year which is great), I have to figure out what to do with my savings. I also realized that my online savings account rate where a lot of my cash is has fallen to 1.1%! Ouch. It's tough times for savers. So, this is my strategy:
-- $10,000 contribution to non-deductible IRA (5K in 2010 and 5K in 2009). This way even if I want to buy an apartment at some point, I can use this money towards that). It also lets me do something with this money i.e. invest it. And, it gives me the option to convert it to a Roth IRA, without having to pay any taxes since its a new account. Seems like a solid strategy.
-- $50,000 1 year CD. My credit union has a good rate for a 1-year CD -- 2.5%. I'm a little nervous about locking the $ up for a year, but I can always pull it and pay the penalty if I need to.
The rest of my cash will stay in my high yield checking account which still has an interest rate of 3.25% or something in the 3s anyway.
Sound like a good plan? I like it because it boosts my retirement savings, which I'm very behind in according to my Puddin Score. And it lets me invest that money, tax free. While I still have a strong cash cushion.
-- $10,000 contribution to non-deductible IRA (5K in 2010 and 5K in 2009). This way even if I want to buy an apartment at some point, I can use this money towards that). It also lets me do something with this money i.e. invest it. And, it gives me the option to convert it to a Roth IRA, without having to pay any taxes since its a new account. Seems like a solid strategy.
-- $50,000 1 year CD. My credit union has a good rate for a 1-year CD -- 2.5%. I'm a little nervous about locking the $ up for a year, but I can always pull it and pay the penalty if I need to.
The rest of my cash will stay in my high yield checking account which still has an interest rate of 3.25% or something in the 3s anyway.
Sound like a good plan? I like it because it boosts my retirement savings, which I'm very behind in according to my Puddin Score. And it lets me invest that money, tax free. While I still have a strong cash cushion.
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