December 7th, 2011
Broke Gal in NYC, Part 3: Frugal Finds at Holiday Time
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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!
November was another busy month filled with saving, consulting, budgeting, and in the final week of the month, a new job! I start another part time job this week with a local urban environmental organization, and I couldn’t be more excited.
I took Justine’s advice and started shaving money off my daily budget bit by bit and decided to challenge myself by seeing how long I could go without spending. I made it four days, a new personal record.
I prefer to use my credit cards for things like travel purchases and shopping online since credit cards offer better protection than debit cards, so I am trying to find a way to use them without overspending and carrying a balance. Currently I rotate what card I use based on the bill’s due date so that I can make sure to pay it off before I incur interest. It’s been working pretty well, and I have not slipped back into credit card debt.
My only debt as of now is my student loans which are at $37,000. I am formulating a strategic plan to start making payments after the first of the year, mainly focusing on my highest interest rate unsubsidized Stafford loan which is currently at just under $15,000.
My savings are going great and they are currently at $6,200, which is just $800 below my savings goal of $7,000. By the end of the month I should be at $6,500 and therefore totally on track to fund my apartment move without using my credit cards.
Kate’s tips for keeping holiday spending in check:
This time of year it can be so hard to stick to a budget when there are all kinds of treats and presents available. Since you want to be nice and find your family and friends the perfect gifts it can be easy to be tempted down the road to naughty overspending. Add that to any holiday travel, and your budget can be trashed before you even have your first glass of eggnog.
With so many of us facing lean times this holiday season, it’s important to set limits and budgets for all holiday spending, including gifts, travel and entertaining.
- Make a list and check it twice. Decide who is on your gifting list. You do not have to give gifts to everyone. If you are short on money, keep your list short, too. Don’t be afraid to make this clear to your family and friends. Find some good tips in Bundle’s article on How to Stop Buying Gifts Without Being a Scrooge.
- Think practical and unique. If you have friends in the middle of a job hunt, they might appreciate a gift certificate for resume help, career coaching or dry cleaning for their interview outfits. Maybe you have friends who are funding personal artistic projects or starting their own small businesses, and you could contribute to that instead of giving them a gift. The fact that you believe enough in them to help with their venture will probably be a gift unto itself. Do you have friends that sell their wares through Etsy? Shop their stores for your other holiday presents and you’ll essentially be giving two gifts!
- Be a bargain hunter. I am a huge fan of lightly used clothes, and since styles change every season eBay can be a great source of new or like-new clothing at deep discounts. If you’d love to get that designer jacket for a special someone but can’t afford it, try looking for it online or in a thrift store for less.
- Don’t stress. The holidays should not be a time to get upset over gifts and money. If you cannot afford to spend much or at all this year, make that clear to your family and friends. Maybe consider utilizing your talents to make gifts by knitting, baking or cooking. Those who really love you will only want one thing for a happy holiday: the pleasure of your company.
Remember, the holidays are a time to have fun and enjoy friends and family, and doing that on a budget is easy if you plan ahead. Happy holidays from Broke Gal!
Kate’s December numbers:
Credit card debt: $0!
Student loan debt: $37,000
Approximate monthly income: $1,700
Justine’s December 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.
Great advice for holiday shopping! I’ll be sure to bag a couple of those tips for myself. With the end of the year fast approaching, and you coming closer to achieving your debt and savings goals, how about we start looking around the corner to the New Year?
- Do now: Your gift-giving strategies make a wonderful point: “The holidays should not be a time to get upset over gifts and money.” With that in mind, I challenge you to reassess the rest of your holiday shopping so you can come in under your budget for the holidays. With the leftover shopping money you will save after you ring up your last holiday purchase, gift it back to yourself by depositing it into your savings or putting it towards your student loan payments.
- Do continuously: Take on new financial “habits” for 2012. Don’t think of these as New Years’ Resolutions, which seem to have an “end” goal; think of these instead as habits to become a routine part of your financial management. Given your current goals of paying off debt and pumping up your savings (which you are succeeding at wonderfully), what new financial goals and habits can you take on in 2012? Maybe you want to build and maintain a credit score in the excellent range. Or perhaps start individual savings goals, like an emergency fund, a vacation fund, or a small business fund. Whatever it is, pick three realistic financial habits, and remember, they need to be something you can keep up and maintain weekly or monthly. Let us know what’s on your 2012 financial wishlist!
- Just for Kate: Crunch your student loan numbers. Looks like your last debt is your student loans, so let’s begin tackling that by stepping back and looking at the numbers. Figure out, starting with the Stafford loan you’re planning to tackle first, how long it will take you to pay off your student loans. If you need some help, check out Credit Karma’s simple loan calculator. The goal is to find out three things: What your monthly payments will be when you start paying in January, how long it will take you to pay off your total student debt, and if you can afford to pay more than the monthly payments. If you can prioritize to put even just $50 more towards your monthly payments, you can pay off your students loans faster and with less interest.