CollegeReflections.com

Seeing as how I’m out of college and have become terrible at posting regularly, I thought I’d make an effort to write about something that’s personally affecting my life and might be of some use to college students. Do to some recent financial challenges, I now need to save some serious cash.

I’ve had some unexpected bills pop up that have to be taken care of as well as my college car kicking the bucket and me needing to pick up a new ride. First off, let me admit that I didn’t buy cheap and I didn’t buy used. This may not have been the best decision but that’s where we are. I don’t switch vehicles often so I decided looking at a 10 year horizon I had much greater need for an SUV than a car. I also looked at used versus new. With auto sales in the dumps you can get a brand new vehicle for only a few thousand over used and often get 0% interest from the car manufacturer. With these factors in my favor I decided to pick a brand new 4runner for $1500 below invoice with 9% interest.

So where does that leave me? Broke. I need to be saving mass amounts of cash for the next 4-6 months until my bonus and tax returns come in (i get my taxes back because i’ve only had a real job for 6 months and haven’t made enough). So what have i done? First I did something that I normally would consider very very stupid and preach against. I took my 401k contribution form 15% to 1%. I did this with the understanding that this is very short-term change made due to a 4-6 month cash flow problem. My recent financial problems will have paid themselves off by February. A soon as that last payment is made in February the percentage will be bumped back up. I consider this a smart move because the difference between these bills and what i can afford to pay will go on my credit card. My credit card is clearly going to have a higher interest rate than what my 401k can bring in.

2nd I have tried to minimize any and all expenses. The fact that I had to purchase a vehicle now is just bad luck, but I’ve negotiated a great deal by pricing my vehicle to almost a dozen dealerships. I finally found the best deal in Oklahoma City, lowering my payments by at least $50 per month over the 5 year loan. I also shopped around my insurance. Now lets look at my spending.

I’m a pretty frugal person in general. Even before I needed the money I was a habitual saver. I don’t eat out a lot and when I do it’s not all that expensive. I don’t buy a lot of random items either. I take my lunch to work most days, so for me it takes some extra effort to make cuts.

Breakfast. In the past week I have been eating a banana and a bowl of oatmeal for lunch each morning. Prior to this i was splurging at least twice a week for breafast in the cafteria, costing me on average $3.00 each time. Savings $6.00

Lunch. I typically bring my lunch 3 days per week, buy a salad in the cafeteria one day per week, and eat out on Fridays with my co-workers. In the past week I skipped my typical salad, but did go out on Friday. But we only grabbed a sandwich at Quiznos, keeping the bill to $8.o0. Savings 5.oo on salad. Wasted spending $8.00 on lunch.

Dinner. I normally cook dinner 4 nights out 5, eating out typically one night per week and spending around $15.00. This week I did not eat out a single occasion. Savings $15.00.

I have two major areas that I do spend on. Now that I live in a small, boring town in Oklahoma, I often go back to Fayetteville on the weekends and tend to eat out and go out partying quite often. These weekends typically cost me $50 in gas, $30-60 in food, and $30-70 in alcohol. There have now been 2 weekends in the past month that I skipped going back and chose rather to stay in town. This has saved me an estimated $300.

This weekend I spent more than I intended, but it couldn’t really be helped. I had to drive to OKC to pick up my car and needed a ride. In order to do that I bought a friend’s $30 in gas and lunch, totaling $24 for both of us. Upon getting back we ate leftovers at my place rather than go out. This morning we ate breakfast on his way out of town to head back home, totaling $13. Overall I spent more than I had hoped, but minimized the cost of driving over 2 hours to pick up my vehicle.

I bought some groceries tonight and spend $50. While groceries are necessary I really looked at my list and tried to cut out the unneccesary items. I got rid of the junk food and soft drinks which reduced my bill as well as helped me be more healthy. I also removed the grapes and strawberries which have risen to ridiculous prices levels in the past few months. I mainly bought some fruit, veggies, and lean proteins for the rest of the week. I plan on taking my lunch to work all of this week.

I’ve also put off several minor $100-$400 purchases I had been looking at making (new snowboarding jacket/pants and a wii). I’ve also cancelled my January ski trip which would have likely cost in the range fo $500.

Overall I’m pretty pleased with the savings I’ve managed thus far. In the following week I plan on keeping track of my daily expenditures and what might have normally been mindless purchases and posting my thoughts and decisions here in the blog.

I hope all the college kids out there will consider what I’m doing and see how they can apply this to their own lives.