I graduated from college (UPenn) in 1999. After being on my own at college, I couldn't make the adjustment to living under my mother's roof (the home cooked meals were great, but the freedom of making my own rules outweighed any positives). I began my career at AIG as a Professional Associate making $31,000. New furniture (including the much needed pool table), buying suits for work (thanks Today's Man), going clubbing on the weekends (Jimmy's Bronx Cafe), and constantly going out to eat quickly added up to $25,000 in credit debt - not to mention my student loans ($25,000) also kicked in. I had to quickly get my life on track and become disciplined with my spending and savings. Here are a few helpful hints that helped me knock out my debt by 2004:
1. Transfer balances from your higher interest credit cards to a lower APR. Watch out for transfer balance fees, make sure you transfer to a credit without a balance & don't make any new purchases on it, and note when the offer expires so you don’t get slammed with the APR increase.
2. Call your credit card company and ask them to lower your APR (if they say no, tell them you have a lower offer from someone else).
3. Go to movie matinees.
4. Brown bag your lunch.
5. Drink water when you eat out.
6. Open an ING Savings account and set up automatic monthly savings transfers (high interest, no fees, and you get referral bonuses for friends).
7. Sell unwanted items around the house on eBay (cds, dvds, books, etc).
8. Use coupons, join frequent buyer clubs, or buy groceries on sale.
9. Transfer your money to a bank with no or lower bank fees (some banks offer zero maintenance fees if you set up direct deposit through them).
10. Concentrate on paying your high interest debt first.
11. Make your long distance phone calls using your “anytime” minutes on your cell phone (or cancel your home service).
12. Shop for food using a shopping list.
13. Use generic drugs – they have the same active ingredients as the name brand but at a fraction of the costs.
14. Take advantage of shopping online: free shipping and no tax.
15. Always shop around for the best auto insurance quotes (GEICO is great, but sometimes they are not the cheapest).
16. Pay your car insurance off in one payment – eliminates installment payments.
17. Use plastic bags from the supermarket as trash bags.
18. Resole your shoes (much cheaper than buying new shoes and something I learned from The Millionaire Mind).
19. Rent videos, cook at home, walk in the park, go to a museum, or play board games as ideas for dates.
20. Buy iced tea and lemonade mix as alternatives to soda.
21. Recycle.
22. Borrow books and videos from the library (you could request to have the books and dvds you want sent to your nearby library).
23. Buy frequent use mass transit passes when feasible (participate in pre-tax programs at work).
24. Download music and movies.
25. Try to use only your bank’s ATM machine to avoid fees.
26. Machine wash and iron instead of dry cleaning.
27. Compare prices at Target, Walmart, eBay, Amazon, or clothing outlets.
28. Save gifts that you were not fond of and re-gift them.
29. Go to a bar/club with drink specials, free buffet, or allows free admission before a certain time.
30. Ski and go to driving ranges at non-peek hours for savings.
31. Check to see if your credit card offers discounts for eating at a restaurant or shopping at a store.
32. If your job offers a 401K or similar where they match, definitely participate (free money and forced savings)!
33. Cut back on vices: cigarettes, drinking, and coffee.
34. Take a defensive driving course to save on car insurance.
35. Take advantage of credit card reward programs.
36. Vacation during off peak time
37. Apply your tax refunds and work bonuses directly towards your debt.
If you have any more suggestions, feel free to leave them in my comments section.
I try to read as much about personal finance as possible - call it a weird hobby. I became interested in the topic when I was $50,000 in debt ($25K credit card debt and $25K student loan debt). Back then, I was eating out all the time, buying things I didn't need (pool table, candles from the Yankee Candle Company, etc.), and I was in a rush to have my own apartment after graduating from college (new furniture and groceries add up when your APR is 16.9%). After educating myself, playing the transfer balance game properly, and after a lot of sacrificing, I was about to get out of debt in 5 years.
and it was one of the best Personal Finance books I have ever read. Ramit Sethi is the co-founder of PBwiki and has a blog by the same name as his book www.iwillteachyoutoberich.com Although I didn't learn anything (I'm a self proclaimed expert on debt and budgeting), its a great intro book for those new to the topic, people in debt who realize its time to get out, and college students who recently graduated. The book is easy to read (no boring financial jargon), the author has a sense of humor, and he does not talk down to the reader. Here are a few of the topics covered in the book:
