October 5th, 2011
Broke Gal in NYC, Part 1: Getting to know you
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Welcome to the “Broke Gal in NYC” blog series! For the next six months, we’ll be following Kate from the Broke Gal in NYC blog in her progress to pay down debt, make a career change and do it all in a financially savvy way! Keep track of Kate’s progress each month on the Credit Karma Blog. This month, we’ll meet Kate, hear a little bit about her progress thus far, and get some savvy money tips from her.
As of August 2010, I was unemployed, owing nearly $3,000 in credit card debt, and had no savings. I was living way beyond my means. I felt hopeless, helpless and out of control. A year later, I have almost $5,000 in savings and my credit card debt is nearly paid off (I only have 100 bucks left!). I am so pleased that I managed to do this on about $1600 a month in NYC. Even better, in learning how to take control of my own financial future, I have found a new passion in personal finance.
After graduating with my bachelor’s in political science and sociology in May 2008, I set off to volunteer and travel abroad. It was an amazing experience, but it was very expensive. I maxed out my credit cards and returned to NYC in August 2008. Then, simultaneously, I lost my job and the national economy took a turn for the worse. The night the stock market crashed, I stayed up all night drinking with friends who worked on Wall Street, listening to their stories of the fear and chaos of that day, which mirrored my own internal state. I started the final year of my Master’s that September while looking for a part time job. I was unemployed until 2009, when I started freelancing in non-profit administration.
I’ve realized in the past year that faced with uncertainty, it can be so easy to bury your head in the sand and just let it all become overwhelming. Out of school I thought I would be working in a more consistent and traditional fashion. I’m privileged to have a very good education and live in New York City, which provides tons of opportunities. As of now I’m currently working part time and looking for a second job and other freelance gigs all while planning to go back to school. My main, and soon to be only, debt is $37,000 in federal student loans, which I am currently deferring.
Now, with my credit card debt almost gone, nearly six months worth of savings, and a new career in sight, I feel significantly less insecure and anxious and finally feel like I am in control of my financial and personal future.
Kate’s tips for surviving as a young person in the recession:
- Use any and all of your skills to make extra money. Etsy, Craiglist, blogging and Fivver can all be great outlets for non-traditional ways of making money. Be creative! You might even stumble upon a new career.
- Redo your budget weekly. I have a daily amount that I can spend on “whatever,” and sometimes I save that amount for large activities with friends or my sweetie. I decide this amount with the formula income minus expenses (including savings) divided by seven. You could extrapolate this out for monthly budgets too, if that is more your style.
- Save ALWAYS! It is essential to have an emergency fund that is ideally several months’ worth of living expenses. Additionally, make sure you know if you are able to get unemployment and potentially pursue supplemental food benefits and public health insurance if you are eligible.
- Use your social network both on and offline for advice, connections, and support. Your friends, social media outlets and blogs can be amazing sources of income and friendship in large and small ways. With the youth unemployment rate the highest on record, it is important that the youth of America support each other as much as possible.
Kate’s October numbers:
Credit card debt: $100
Student loan debt: $37,000
Approximate monthly income: $1,600
Justine’s October Goals for Kate:
Each month, Justine, Credit Karma’s Credit Advisor, will give Kate three small goals to work on before next month’s update on Kate’s ongoing career change. We’ll see how she’s progressed in next month’s post.
Your resilience is inspiring for everyone dealing with financial goals, big and small!
You mentioned juggling multiple jobs and eyeing a new career on the horizon. I’d love to help you put some concrete goals to your aspirations to put you that much closer to making your dream job a reality. Let’s get started!
- Do now: Nail your resume and cover letter right now. Don’t get stuck updating your resume; just get the details down on paper. Editing is the time-consuming part, so recruit help by sending your resume to trusted friends and family for feedback. Make templates for your cover letter to save a ton of time! Get a general outline down that will let you plug in specific details for each job, and have a few templates ready for different types of jobs you’re applying for.
- Do continuously: Stay in the know! Whatever your dream job is, it pays to be informed on the industry and trends. Set up a feed reader like Google Reader or news reader apps like Pulse and add in news sites and blogs relevant to your dream job. Also, follow companies or people you admire on Twitter and LinkedIn. Not only will you be knowledgeable about your field of interest (and score points in an interview!), but you might get wind of job opportunities!
- Just for Kate: Since your dream job involves writing, I encourage you find other ways to promote yourself. Start with creating an online portfolio. Try a free blogging platforms like WordPress or Blogger, or go simpler and set up a one-page About.me. Kate, can you think of other creative ways to put yourself out there, online or otherwise? Fill us in on your next blog post!