photo credit: CarbonNYC

May is around the corner which for some means graduation from high school, college or graduate school. I remember the feeling well. And, while it meant being released from the bosom of self discovery into the arms of adult responsibilities, I looked forward to it with enthusiasm.

I moved to DC in 2003 and I remember talking to my Uncle about all the things I’d need to take into consideration on my meager salary. He wanted to make sure that I was well informed about the realities of adulthood which meant being independent and paying for everything on my own. Now its my turn, for those of you that are graduating high school, college or even graduate school, here are 8 frugal and cost cutting tips to take into consideration when spreading your wings.

Apartment

Consider the cost of living wherever you are headed. After living in NYC for most of my life and then moving to DC, for some reason I thought apartments were dirt cheap since I was moving to the “south”. Ha! I told my uncle that I’d found an apartment for $580 per month in NE DC (not knowing a lick of information about the area mind you…) he just agreed to take me over to the area to judge for myself. While he got a hearty laugh, as I realized we were now in the not so great part of DC, I almost broke down when I realized that where I actually wanted to live, Alexandria/Arlington, VA was more like $1100 per month.

I knew that was out of my budget and regretted taking the position because I wasnt able to afford to live in one of the better parts of town. I didn’t want a roommate and settling for NE DC (no offense anyone) wasn’t in the cards. Looking back I should have considered a roommate in a better part of town. What did I do? I chose an apartment in an OK part of town for $750 per month and lived solo. I’d never live there again but it worked for the time being and I was able to save money.

Lessons Learned:

• Visit the new city before signing a lease or settling on a particular part of town.
• Consider having a roommate or two, as this greatly subsidizes the cost of living in a better part of town while meeting new people
• If you aren’t splitting utilities, find an apartment that includes utilities in the rent. With rising utility costs you’ll avoid paying the high heating/energy bills depending on the season.

Transportation

DC is very different from NY in that people who move here aim to live near their place of employment, while in NYC, its pretty normal to have a 90 minute commute to work getting from Queens to Manhattan. Imagine my excitement when I figured out that my commute would be 20 minutes max! Well that’s because my apartment was walking distance to the metro and I was also 5 minutes from the beltway. If I drove in then my commute increased to an hour because of the traffic getting into DC.

Lessons Learned

• Choose an apartment or house within walking distance of public transportation the metro
• Forgo purchasing a car if you live near a metro as this will save you money on a possible car note, parking, fees, gas, insurance and maintenance
• Before signing the lease, take public transporation around your neighborhood and to work as you would on a typical day. As you get settled in, you’ll be familiar with the area and hopefully not skip a beat as you make your way around your new neighborhood.

Set Up Automatic Bill Pay for all Bills

This includes student loans and credit cards. Don’t risk getting hit with a late fee because you’ll get so caught up in your move that financial obligations fall through the cracks. As I got settled into my new apartment a few bills didn’t get paid because I totally forgot. Why? the credit card company hadn’t sent the statement to my new address and it slipped my mind to call and pay the bill. Also keep in mind that when you pay over the phone, most credit card companies charge you a convenience fee and using checks opens yourself up to identity theft and possibly not mailing the payment to the correct address. If you must use snail mail, use the envelope that accompanies your statement.

Lessons Learned

• Set up automatic bill pay to ensure on time payment of all monthly financial obligations
• If you must use snail mail, use the enclosed envelope that accompanies your statement

Compare Cost of Living with New Salary

This was one of my biggest mistakes when moving to DC,not understanding what my salary would afford. I saw $23, 000 and thought, oh Im rich! I was sadly mistaken and in for the shock of my life when I realized I didnt have enough money to go shopping for new clothes or eat out for lunch with my colleagues. Had I known how to negotiate a better salary I might have been in a better position once I moved here. While I know some believe in paying your dues, I believe strongly in paying the bills. And, after spending 4 years and amassing thousands in student loans, college graduates should command salaries that will keep them just above the working poor, ie living paycheck to paycheck.

Command what you are worth and don’t settle for a salary that will limit you in terms of quality of life and being able to pay your bills, save and live comfortably.

Lessons Learned

• Master the art of negotiating your salary if the offer falls below your target goal
• Compare the cost of living with your salary offer and determine if you will be able to save and cover your monthly expenses without having to eat Ramen Noodles every night
• Use the Paycheckcity calculators to determine how much money you will actually take home every pay period

Sign up for a Local Food or Grocery Charity

The cost of groceries here in DC is higher than NYC. *shrug* Don’t ask me why as I thought the opposite would be true, I was quite surprised after leaving my local Giant supermarket one afternoon. Neighbors told me about Sharedc.org which allowed me to get groceries on the cheap at $18 a bag. This included fruits, veggies, meats and some snacks. It was enough to subsidize my grocery spending significantly. I still toy with the idea of doing the same thing now given the rise in food expenses.

Lessons Learned

• Compare prices of your food staples and create a price book to help you keep track of your favorite items
• Sign up with local food charities like ShareDC.org or Angel Food Ministries
• Cut coupons from the Sunday newspaper to save even more money
• Utilize sites like The Grocery Game to compare local sales in your area
• Buy in bulk in addition to utilizing food charities
• Plan your meals for the week and use leftovers for lunch

Decorating Your new Diggs

While I was on a Ms Independent kick, my mom did purchase my first bedroom set and my uncle purchased all of my kitchenware, bedroom and bathroom linens. I went for a while without real living room furniture because I refused to go into debt for furniture I wouldn’t take with me to the next apartment. I advise you to o the same. I scoured Craigslist for a futon frame and bought a cheap futon mattress from a retail store, bought a 20 inch TV for $30 and a coffee table set for $55. My living room was now complete! All courtesy of Craigslist.org. My futon doubled as a bed whenever friends stayed over and I had a working TV along with a semi new coffee table set. Had I gone out and purchased a new living room set it would have set me back over $1000.

Lessons Learned

• Check into semi used furniture to cut on the cost of furnishing your new space

More Lessons Learned….

• Spend Less than you Earn while Devising a Plan to Earn More
  • Create a budget and stick to it. Know how much you need for monthly bills and how much you have remaining for discretionary spending. While keeping this in mind, remain focused and purposed in devising your next step. Set career goals that will enable you to be promoted by learning new skills through graduate school or taking on extra responsibilities.
• Buy New Work Clothes on the Cheap and Recycle What You Already Have
  • Stores like Charlotte Rousse, Forever 21 and H&M are a godsend in helping a fab fashionista remain updated on the cheap

While this is a new and exciting time in your life, make a serious attempt to reign in your spending habits as this will be useful as you learn to make better decisions when it comes to money. What are some tips you have for the new graduate in a new town? How did you handle your finances in your first year after college?

photo credit: CarbonNYC

Here’s the 3rd and final installation of Cheap Alternatives for the Must Haves in your Life. You can find part 1 and 2 here and here. Enjoy!

Hotel Stays

• House Swap
  • Folks sometimes advertise their digs hopes of an exchange. What kind of exchange? You let me stay at your place and I’ll let you stay at mine. Check it out here.
• Couch Surfing
• Sign up for price alerts via SpiritAir because they are famous for their $9 fare club airfare specials and with that savings you can totally afford to stay at a hotel. We took advantage of this and were able purchase airline tickets to Miami last Spring for $90-total for 2 people.

Gym Membership

Here are a few alternatives to that pricey gym membership:

Do it yourself! Yes I said it!

• Calisthenics
  • The primary calisthenic exercises are:

• Sit-ups/crunches

• Push-ups

• Pull-ups

• Squats

• Calf-raises

• Running at local park or around the neighborhood with a partner
• Workout at company gym
• Workout with exercise programs on demand and record them via Tivo
• Purchase small space saving gym equipment on Craigslist and Ebay
  • Air Stepper
  • Dumbells
  • Ab Lounge

Electricity/Gas

The bane of my existence in the dead of winter and the middle of summer. It’s no news that heating and gas prices have shot through the proof but I am determined to keep my bills to the minimum. By employing these practices in our home we expect to save roughly 30% on our heating and gas bills.

• Buy an automatic thermostat and set the heat to come on at 5am and 6pm or whenever you rise and go to sleep/get home.

• Wear warmer clothes such as a sweater and thick socks and lower the thermostat.

• Heart of the Earth also recommends:
  • Use compact fluorescent bulbs. They last 10 times as long as standard incandescent bulbs and use only one-fourth of the energy to produce the same amount of light. Even with the higher purchase price, they save over $40 per bulb over their lifetime.
  • Air leaks around doors, attic openings, outlets and windows in the typical American home are the equivalent of leaving an average-size window open all the time. Close them with weather stripping for a cost of less than $2.00 for one door or two windows. Hardware stores also sell pre-cut outlet insulators. If you can see daylight around your door, attic hatch or window, it needs weather-stripping or caulking. Reducing small air leaks in your home can save 10 percent or more on your energy bill.

    Get rid of halogen torchieres. They can add $100 or more to your electric bill per year (and are a fire hazard).

    Use only the amount of light needed, and turn lights out when you leave a room. Turning them on again, even after a few minutes, uses less energy than leaving them on (even with fluorescents).

    • Web sites for more information

      • http://www.ase.org/powersmart/fbulbs.html

      • http://www.ase.org/powersmart/lightup.html

Personal Finance Software

Stop paying for Quicken and Microsoft Money, Mint.com is free, easy to use, integrates accounts and allows for seamless expense tracking. Best of all? Its FREE!

There you have it! There are things we can all stand to cut back in so that we can save more money. Try just a few of them and see how the savings rack up! Feel free to add your suggestions in the comments!

Groceries

With the rising costs of food it’s become harder to maintain our grocery spending. Here are a few sites that provide coupons as a way to save money.

• Sign up for coupon sites:
  • Grocery Game
  • Coupons.com
  • Printable-Coupons
    • Printable-Coupons is an awesome site which goes into great detail about how you can use coupons to cut back greatly on your grocery bill. Here are a few sites the site author recommends:
      • Local Restaurant Coupons
      • Save on Groceries
      • The Coupon Book Organizer
      • Local Printable Grocery Coupons
      • How To Save On Groceries
      • Coupons On Ebay
• Food Co-oop
  
  • You can typically save between 20-40%by using grocery/food co-ops. The savings result from members participating in the set-up, bagging and distribution process which results in passing the savings on to the consumer.
  • The Frugal Duchess has a really informative article on how she saves money by going using an organic food co-op. This is a great option for those of us who don’t want to bust the budget at Whole Foods.

• Nonprofit organizations
  • This is another option if you just need the basics and not much more. For example, ShareDC.org and Angel Food Ministries are two organizations that I have worked with and referred others to in a time of need. Keep in mind that not all organizations require that you have a financial need, but for the frugal bunch, saving money constitutes a need See their menu here.
    • ShareDc.org – $18/bag of groceries
    • Angel Food Ministries $30/box

Make-Up/Cosmetics

As a woman who wears some form of makeup everyday I am always looking for deals in this department because it can get expensive, especially if you have problem skin. I stick to what works for me so I am always able to find my products on Ebay and Craigslist. This way I get really low prices which results in a savings of at least 30-40% off the normal price.

If you generally can’t find your items online via Ebay or Craigslist then track local sales in your area and rack up when the prices drop. This weekend, we got spaghetti sauce on sale at Shoppers, 10/$10. Can you say DEAL?! As with grocery shopping, you create a price book and make a section for cosmetics. Track the prices and when something truly goes on sale you’ll know that it is a good time to buy. This is especially good or those things that you buy often, like we are always tracking Green Giant Sweet Peas.

Here’s an example of how it works from No Credit Needed:

I’ve been tracking the price of Canned Corn at my local grocery store. For months, the price of Canned Corn hovered around .50 per can. In September, the price dropped to .40 per can. A great time to buy, right? Nope. I knew, because of my grocery price book, that they tended to drop even further nearer Thanksgiving. So, I waited – and last week, Canned Corn was on sale for .25 per can! I stocked up, and now we have enough Canned Corn to last the winter and enough to donate to the local food drive.

Try out your local pharmacy/drug store because I know for a fact CVS is good for their end of season sales on certain items which always include cosmetics.
Daily Newspaper/Magazines

My husband is guilty of this, we get the Washington Post and Wall Street Journal delivered only to have them pile up on our magazine rack. He reads most of his news interests online most of the time so we really don’t need to pay for the newspaper to be delivered. Still, I know he likes to read while on the metro going in to work.

With the advent of the World Wide Web it just makes sense to use it to your advantage. Here are two alternatives to buying the paper:

• Read them online at the respective websites
  • Wall Street Journal
  • CNN
  • New York Times
  • WashingtonPost
• Check out niche blogs if you want to read about gossip, fashion, political and things that might interest you.

Mobile/Cellular Phone

Wanna beat the mobile phone giants at their own game? Then try one of the following alternatives. If you use your cell phone infrequently then there is no reason to carry a large cell phone bill each month. The benefits include no credit check and no monthly bill making this area of your finances a cake walk.

• Prepaid Phones
  • AT&T Wireless, T-Mobile, TracFone, Verizon Wireless, and Virgin Mobile.
• Skype
  • This service has proven to be invaluable to us because we have family overseas and my husband often makes conference calls using this service. Its cheap and reliable as long as you have a consistent cable internet connection. So if you’re looking for a reason to dump your cell phone and save money, you’ve got your reason right here!

This concludes our 2nd installation of the Cheap Alternatives series. Let me know what works for you and what doesn’t. What are some cheap alternatives you employ that aren’t listed here?