Financial Advice for the Very Poor

[neatdesign]

You have to budget everything down to tiny purchases like that. Sounds exhausting.

Sure, it can be exhausting -- but it's worth it. And it's not like it has to be done constantly. Once one understands the big picture and has an idea of where every penny tends to go, then they know to allot for those smaller purchases in their budget and that takes the guesswork out of it.

In my case, I budget my expenses by category and have a "miscellaneous" category which serves as a buffer to cover any little, unexpected expenses that might pop up. If I don't use everything budgeted for that category that month, then it just rolls over to the next month. I try really hard to stick to the budgets I've set for the other categories (groceries, gas, entertainment, etc) which aren't already fixes expenses (like rent, cable, phone, etc).

Until last December, I basically had no budget. I had a rough idea of what my fixes expenses were, but that was about it. It took me a few weeks to analyze my expenses and spending habits, create a budget and then learn to stick to it, but it was time and effort well spent (no pun intended). This budget has enabled me to pay off $3,000 in credit credit debt so far this year -- I have $200 more to go -- and by Dec 31 I will be completely debt-free for the first time in 12 years.

Just to put this into perspective, five years ago I owed about $13,000 in credit card debt. Without a budget I was only able to pay off about $1,960/year. With a budget I was able to pay down $3,200 -- so yes, exhausting but worth it!

You might want to try Mint.com, which employs the envelope/category method. And it's FREE!

[snafu]

eLIE: Like you, most students are struggling to get by. Those that learn the tricks to effective money management along with the course material will be 'The Millionaire Next Door.' It's not really about how much you earn, it's truly about much you keep. You're a smart guy and don't have to learn by experience. Being late on payments wrecks your credit score and results in already high interest rates going to gouging.

[Sian]

if you go for the social interaction and not the booze, then what are you spending the money on? <curious>

get a water and a large appetizer (like the samplers they have where they a little bit of everything).

just trying to help you cut down your spending. if you even do that you can spend $15/mo instead of $30-40/mo and still go out every month. (spending $180/yr vs spending $360-480/yr)

that's at least an extra $180/yr to pay down debt. which means you can get out of debt sooner.

[Gina23]

I agree wholeheartedly. I'm trying to decondition myself from the learned helplessness. I also have some opportunities coming up, so I believe my resilience is starting to reap cosmic results. I guess I just have to stay positive, like my mother always said. Thanks.

In addition to what dczech said...

There are a lot of "us" that came from nothing, poverty, section 8, white/black/brown, etc... If you go around thinking you are less fortunate than others, you will be treated that way. It's that simple. It will hinder you until the attitude is changed.

I grew up probably worse off than what you described. But, I'm fine. I decided I didn't want to live that way and didn't make excuses. When I travel to visit my family back home and see the poverty, the drug addictions, the rampant unplanned pregnancies, and the excuses... I'm reminded how my life would be if I were to think that way.

If you want something bad enough, you'll get it. Good luck to you... you can do it.

[BuckyBadger]

Students are usually poor. Students don't get to treat "themselves and their family."

You're no worse off than many students in your position.

Pay off your debt. Stop racking it up. Stop using credit cards. Choose a marketable major and get a job after school.

People who don't have much money DO have to budget down to the penny. Once you're doing better for yourself, you won't have to do that.

And perhaps stop accusing people who are giving you good advice of being "classist" and actually listen to what they are saying.

[Nika]

You are a student and your condition is temporary.
You say you can't get more hours while being in school full time? Understandable. (are these 20 hours work-study, btw?)

Than you have to put up with this sort of lifestyle. But 10 hours a months more would give you a lot of breathing room, because proportionally to your income, that would be a significant difference.

There are seasonal jobs right now and plenty of them. If you go to retail stores and small businesses and ask them if they need help on weekends, I think you have a good shot. Just 4 days of full time work can help you start to build up a cash cushion.

Talk to your professors. In college, besides work/study job in the library, I worked on data collection for a study my Psych. professor was running (he had a grant to pay for such things). I house-sat to keep a company for his dog for another professor when he was out of town (very nice house in the suburbs, I liked it because living at home gave no privacy and that was a change).
None of these were difficult jobs, all they required is that you are trustworthy and reliable.

Before Christmas I went back to a store where I worked when I was in high school and they would hire me on as extra help for the busy time for short period. Because they already knew me and I was a safer choice than a new candidate. I did not want to work there normally -- college jobs were much more interesting and flexible, but working for few weekends around the holiday gave me some cash boost.

Things like that...

[Gailete]

You have to budget everything down to tiny purchases like that. Sounds exhausting.

Yep it is exhausting. Fraid I don't have much sympathy for you as Poor college student. You are living the high life compared to what I went through when I was in college. I worked three on campus jobs, baby sat, grandpa sat for a woman who had her dad in her home and didn't like leaving him alone, I typed term papers and everything else I could find to do. I was always grateful when a typing job came up (on an old fashioned MANUAL, portable typewriter for those who remember the 'joy' of typing on those) because a typing job either meant laundry money or toothpaste money. Thankfully I didn't drink because I didn't have any $30-40 bucks a month to spend on booze and saying this is for the social interaction for your writing is hog wash. You are a college student--there are tons of activities going on a college that are entertaining and give you a chance to socialize for free, even hanging out at the student union or whatever they call it these days, or anywhere else in that city of millions of people. Why in the world would you need a bar to socialize? In NYC area you would have to go out of your way to not be around people.

That being said you have to get the poor me and the poverty nonsense out of you vocabulary. There are many that have climbed their way up out of poverty and it is hard work for sure, but worth it. You need to open up your mind and look at the savings possiblities and the recomendations others offer instead of calling them names like classist. The definition to me of being a poor college student is being 1600 miles from home in the midst of a Canadian Prairie winter, and finding out you only have less than $2 in your account (and no money in your pocket) because your father who promised to pay for your education didn't send in any money and I never saw another penny form him until I graduated. By doing all the things that I mentioned above, I managed to graduate 3 1/2 years later with NO debt, all my schooling bought and paid for with an extra $100 in my account to start my 'adult' life on! I worked HARD and I was exhausted but I wouldn't trade those 4 years in for anything!