If you recently graduated from college then you’ve been hit with the task of managing your own finances.  You may now have a job with a decent paycheck and along with that comes bills, unplanned expenses and learning to balance your checking account.  During this time you may also be experiencing some confusion, doubt and you can’t shake the feeling that nothing is wrong, but something just doesn’t feel quite right.

Welcome to your Quarter Life Crisis.

It is often around this time that Quarter Lifers can let their finances lapse leaving a trail of bad credit and unpaid bills due to overwhelming feelings around student loans and disillusionment around maintaining a desired lifestyle.

So how does a Quarter Lifer get through this extremely confusing period of life without letting their finances lapse?

1.   Get Organized

This is indeed a difficult time but it is no reason to let you finances lapse in the midst of it all.  Take inventory of your financial obligations and set them on auto pay through your bank or other online bill pay systems.  This way you can let the bills take care of themselves so long as you keep the funds in your bank account.  This includes saving at least 10% of your take home pay as well.  Remember, above all, pay yourself first!

2.  Create a Budget

You may be asking how do I do that?  It’s pretty simple, For the next month, track your expenses down to the penny.  You can do this by using all cash, only your debit card or just tallying up all purchases, bill payments and receipts at the end of the month.   After reviewing your information, decide which areas need improvement and go on a trial run for the next 30-60 days.  This way you gain a better understanding around which areas need closer oversight.

In my case, when I first moved to DC after college, I really needed to watch how much I ate out each week.  Of course I wasn’t the Martha Stewart wannabe I am today and ate out for breakfast, lunch and dinner, which got really expensive after a while.  So take stock of what areas need closer watch then tally up the totals.  Once you have an idea, you set the limits and voila, you now have a monthly budget!

Here’s a copy of a budget spreadsheet you may find useful:

• Personal Budget Spreadsheet

3.  Communicate With Your Student Loan Lender

If you haven’t already done so, call your student loan lender and find out when you first payment is due.  Get information around due dates, grace periods, payment terms, forbearance and in school status.  Depending on your personal/financial sitution you may be eligible to ask your lender for a forbearance just in case you aren’t able to manage payments at this point in time.  Some of you (like yours truly) may owe over 100k in student loans which is like a mortgage payment for most.  Still, Sallie, Citi, AES, KeyBank etc etc want their money.  It is in your best interest to make sure you are on track with this debt.  Like death and taxes, student loan repayment is another certainty in life.

4.  Curb The Shopping!

This includes lattes, the cute empire dress you could get for the after work party on Friday, the heels you don’t need and anything else not deemed a necessity right now.  If you must, give yourself a monthly shopping allowance and make it your duty not to go above it.  This way you’re able to shop and not feel guitly about it.

5.  Talk to Mom and Dad About Your Finances

Quarter Lifers are often caught up in wanting to seem responsible that they forget that it is still OK to ask for help even if they are on their own.  I can admit to calling my mom 8 months after moving here and telling her that my CC debt was unmanageable and I needed help.  She promptly called the credit card company and paid the balance for me and made me promise not to run it back up again.  Sometimes we need help and mom and/or dad are more than willing to help us out.  Of course, not without a stern talking to but it may be the help you need to get you back on the right path and giving you a fresh start.

Of course I do not advocate parents enabling their adult children, however, I am of the mindset that if they can still help out while you’re still getting your feet wet in adulthood, why not?

This is just one aspect of learning how to manage a quarter life crisis, keep in mind that issues around career, identity and relationships  are best handled by a life coach or therapist depending on the severity of the issues.  Your first step is realizing there’s a problem but that it’s totally OK to feel the way you do.  Just try to maintain control in the area of your personal finance so that you’re not paying for it years down the line when you’ve moved past this period in your life.

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It’s my fault, I totally didn’t budget for any off these expenses. I knew that my hair appointment was coming up but didnt factor that in, didnt think the cat would get sick again so soon, and decided on a whim that we needed to get the carpet cleaned in the whole house. *sigh* But I’m learning the important lesson of thinking/budgeting ahead, so read on.

Scotch, the Alpha Cat our beloved kitty

Scotch is quite the rambunctious cat, always has been.

[Exhibit A: , yes that would be Scotch on top of the closet door trying to get to the high shelf in the closet :), mmhmmm yes ma'am ]

You can guarantee that he will get into something at least every 3-4 months. Well this time was no different. Since getting a new kitten, Max, we’ve been keeping Scotch and Max separate because Scotch is rather aggressive and often tries to hump Max when he thinks we aren’t looking. After a few solo nights in the cat room, Scotch in his infinite cat wisdom started digging up the carpet in an effort to dig under the door. All that is left are the exposed nails, and you guessed it, while digging for freedom he got a nasty little cut on his front paw. By the time we noticed, it was already swollen, smelly and crusted with blood and pus. We took him to our trusted vet, Capitol Hill Veterinary Clinic and they patched him up. [Sidebar: They are the absolute BEST vet in the DC area IMHO] My mom and best friend scoffed at the cost just to have him seen and given a few meds but after the scare we had in October I think the cost is well worth it. I wasn’t blogging back in October 2007 (well about personal finance) but we spent over $1000 on his vet bills in 6-8 weeks. No insurance because we just didnt think we would ever need it. But I am happy that we didnt resort to using the credit cards, all cash baby! However, its now February 2008 and we’ve already spent $237.50 on his new litter, meds, vet bill and shots. I want to rip my hair out for not getting the vet insurance sooner but we will sign up on our follow up visit on Monday.

Damage: $237.50

Lesson: Plan ahead for vet expenses, and sign up for pet insurance. We didn’t have pet (medical) care as a line item on our budget this year as we only factored in their food and toys. I think this will call for $40/month in an ING sub account for things like this but I want to see how much the vet insurance will cost us and what it covers. At this point we need it to cover routine visits and “I’m being a bad ass kitty and need help” visits. *sigh* While administering Scotch’s meds last night and treating Max for pink eye, my husband said “Baby, we’re parents now, LOL!”. He has a point, they are like our kids, never quite saw it like that, but hey I wouldn’t have it any other way.

Carpet Cleaning

We moved in here last June and we had the carpet cleaned with the Rug Doctor and another cheapie carpet cleaning service. At $8 a room, we got what we paid for and the Rug Doctor was garbage. I don’t think it made a significant difference in the overall carpet appearance. So I called up the company, Superior Fabric Cleaners, made the appointment and they came out yesterday. FABULOUS! They cleaned, sanitized, deodorized and treated the carpet, top to bottom! I came home and screamed! I can now say that we have a home and not a house. There’s something about having a CLEAN carpet that made everything else in here POP! So it was well worth it for me. Why is it a budget buster? It cost $450 not including tip But the house is rather large at 3000 square feet and the technicians had to factor that in.

Here are some pictures of the living room and basement:

Very pleased!

Damage: $550 including tip

Lesson Learned: PLAN PLAN PLAN for things like this. Could the carpet cleaning have waited? I’m sure, but with 2 animals and a broken vacuum cleaner it needed to be done.

Hair Salon

So I’ve had this appointment for months, LOL! This is one of the things I struggle with on my budget because it costs $150-$200 plus tip every 8 weeks. Sure, I could just do my own hair but yea not so much and I definitely wouldn’t change hairdressers because she does awesome work. If you’re a black woman reading this, then you know that we don’t switch hairdressers often and when you find someone you like, you stick with them. Nuff Said. BUT—>I should have factored this expense into the budget because with everything else it just hit me that this is way too much going on for one weekend.

Damage: $230 including tip

Lesson Learned: Budget hair appointments into monthly budget.

Total damage: $1017.50

As you can see my overall lesson here was to plan for things that I don’t normally think about with regards to our budget. They aren’t emergencies so it didn’t warrant dipping into the emergency fund but situations which sorta kinda warranted immediate action, well except for the carpet ad hair salon appointment. I’ve been bad I know, but February will be better. Wait, this all happened in February. Well, I’ll do better for the rest of the month, how’s that?

We still have to go to Lowes or Home Dept to get some stuff in order to increase our energy efficiency because Washington Gas and Pepco are getting out of control, more on that in another post. We’re going to seal all the windows and *gasp* turn down the thermostat to see how much of a difference it makes in next month’s bill. We do have friends staying with us so we are accounting for 4 people living here and not just 2. We also have random, somewhat planned trips to go down to the wharf and get crabs for the game later. SSHHH!!! This is soo not a good way to start February.
January spending coming up soon!

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