Decisions

When it comes to money, once you have a bit, there are so many decisions to make. For example, should I pay extra on my student loans or put more towards retirement? Should I have a 3 month emergency fund or a 6 month emergency fund (EF)? If I put more of my savings in my emergency fund, what do I cut? The problem is we cannot do everything we want, spending or savings wise.

For students the choices can be do I work or take student loans? Or should I take out the minimum I need or have some breathing room? All of these choices will affect our futures but we don't know which is the best choice. So how to choose?

Personally I think it is ok to take the max amount of subsidized student loans to give yourself an EF as long as you keep that money as EF and not an excuse to spend more. Also, I would assume that a student would repay the extra amount they took within the first 6 month after graduation to avoid having a large month expense. Also check what fees you pay to get the loan (discover is 0% but direct loans can have up to a 1.5% fee).
In regard to SL vs retirement it depends, if you have having trouble with cash flow maybe paying some the student loans off may be better for you or if you have private student loans (because they are variable) it may be a good idea to pay them off before the rate goes up. For my DF and I, we will be paying off my small loan while he is graduate school while saying 14% of our income to retirement. Because he started saving late, that amount is the least amount we feel comfortable saving. This will allow us some breathing room when he is a post doctoral fellow (which does not pay much).
To determine how much of an EF you need, I would look at your expenses, how easy it would be to get a job to cover those expenses and how stable your job is. As a graduate student my DF's job is extremely stable for the next three years so I am fine with a three month EF but once he becomes a post doctoral fellow it will be moved up to six months because a post doctoral fellow is not as stable.

But all of these are our choices and everyone makes their own, as it should be. Just make sure you know why you making your decisions and why they are right for you.

Where to Save?

Now, you have done some surveys or gotten some cash back from shopping or been frugal for a few weeks, now where do you put that extra money you now have? Well you definitely don't want leave it in your checking, you will spend it. You could move it your saving at your bank or credit union but the interest is pennies so where should you put it?

Well if you opened a upromise account, also open a Sallie Mae account and set up $25 automated transfers from your checking to Sallie Mae and you will get an additional 10% on your cash back from upromise, that it transfer from upromise to Sallie Mae every time you have $10 or more in your upromise account. This additional 10% will be deposited (they say) in February. Keep in mind that this is a new venture for Sallie Mae and expect problems. For example, they were supposed to withdraw $25 from my checking and deposited it Sallie Mae and they withdrew the $25 from both accounts. It got fixed, but it took awhile and I do not know if they would have fixed it if I had not noticed. But checking the account for mistakes takes me a few minutes every week and I do it with all my accounts so that is not a problem for me. My fiance, on the other hand does not want to deal with the issues so he does not have a Sallie Mae account. At this time the interest at Sallie Mae is 1.40%.

Otherwise save up $250 and open a ING account using a link for someone who already has the account. If you do so, you get an additional $25 (if you leave it open with the $250 for three months) and the person whose link you used get $10. At this time the interest at ING is 1.10%. Looking at just rates, if you were going to pick on high yield savings, I would pick Sallie Mae but the additional $25 makes up for a lot. If you do not know anyone who has a ING account, please leave a message here with your email and I will send you a link.

As you start putting the money in these account, they will begin to snowball and you begin to have more money for less effort.

Memorial Day

Happy memorial day for those in the USA. Many people have barbecues/parties and trips over memorial day but is there a way to do these things cheaper? I think yes.

For barbecues you can have a potluck instead of paying for everything or you could buy the meat in advance and take advantage of the sales or find a small meat market and make a deal if you buy in bulk. Many small meat stores will discount if you are buying in bulk. The same goes for some liqueur stores.

For trips, fuel up way before memorial day, even put some extra in a gas can if you have one. Go to the grocery store and pack drink and snacks as well as lunch for at least the first day and stay at places that include breakfast. If you do this, you will buy four meals instead of seven plus you won't have to buy drinks on the road.

Have fun.

Frugal Fun Part 1

Students especially if they work don't have a lot of time and if you work more to get more money often your financial aid is cut so if you can't work more how do you get more money?

Well, you could take a page from high school and babysit or house sit, that money would not go on your FAFSA. However, you are suppose to claim that on your taxes and therefore on your FAFSA (frugalstudents does not say to cheat on your taxes, mostly cause the IRS is scary!). So what can you do?

Most students have very little time and want to have fun so many of the tricks on frugal blogs don't work, either you live at home and they are not applicable or you live in the dorm and you are not allowed to try the tricks (stockpiling being one trick) or again they are not applicable. So again, what can you do?

Well, you could buy gift cards for places you know you will spend, like movie theaters for great movies like Iron Man 2 (I am going to see it this weekend) and then go see the movie during the matinee. Lets do the math, shall we? Say you and your SO (boyfriend/girlfriend) want to go see Iron Man and your are in buffalo, NY. You could go buy the tickets for Friday night at 10.00 a person. So just to see the move you have spent $20 not even counting popcorn, candy or a drink.
So how could you do this and pay less? Well first you can go to plastic jungle and buy a gift card for Regal theaters for 10% off, then you go to the theater Saturday afternoon instead and only pay $16 for the two ticket ($8/each) but since you got the gift card for 10% off, it is only $14.40. You can use the rest of that money ($5.60) to buy popcorn.

Same fun date and by being frugal (not cheap) you get even more than if you were not and honestly all it takes is 5 minutes and a little thinking ahead.

Emergency Funds

Everyone should have an emergency fund (EF) but most financial advice is for you to save three to six months of your salary, how does that work with students? Honestly it does not work. For a young student who is living on loans and side income the best thing is to have a small EF and ways to access money. For example, if you are receive subsidized loans for school but have $5000 each semester of unsubsidized loans available to you, figure out how long it will be till you would able to access them and what bills you would need to pay in that time.

When I was an undergraduate I had a small subsidized loan as well work study, a waitress job and access to another $3000 each semester from unsubsidized loans. My school also would loan (in a emergency) an additional $500 to be repaid in a month, however it would take about two or three weeks to get the money. So my emergency plan was put what ever problem on the credit card (fixed rate of 9.9% from my credit union), apply for the $500 no interest loan from school and then apply for the unsubsidized loan of 6.8% (it took about two months because the loans went to the school and then the school cashed the check out to me).

This allowed me to know that if I lost my waitress job I had a plan which is in sometimes better than just cash. I did however put away as much as I could to use in case of a smaller emergency, such as car repair, and rarely had to use it.

Next article will go into where to put that extra cash you can manage to squirrel away.

Summer is Coming!!!!!!

Students are gearing up for finals and then either a break or graduation! Congrats to the grads and have fun to those who will be on break!
Grads should be aware that their student loans start repayment in about 6 month even if the company does not contact you.

But enough of the depressing stuff, it is almost summer. Summer is one of the best times for frugal fun. Grilling (if you have a grill) with friends in the backyard, picnics with you SO, farmer markets and hiking are all fun things to do over the summer (and they don't cost very much money).

Also fruits and vegetables are starting to be on sale. I got a bag of red potatoes (5lbs) for 2.99, two artichokes for $1.00 and two corns for .25 each. I made mash potatoes and had a great dinner last night. For dinner last night, since I only used a pound of potatoes, I spent $2.50, which includes the amount of milk, butter and spices used to cook with. So dinner, which I still have left over potatoes cost me $1.25/person. Cheap! And it was healthy.

Also I have been getting the ground ready for its first garden. I have a basil plant that I will need to move to a bigger planter and I bought a few raspberry and blackberry plants online that should be coming soon (there was a sale, that made the online price much lower than home depot), so that is taking up time and giving me some exercise. But I am enjoying it and next year we will have lots of fruit.

My advice for the summer, find free or cheap things to do outside and enjoy yourself. So get on your tennis shoes and get out there. Have fun and eat lots of fruits and vegetables, your wallet and your body will thank you.

5 minute mom UBP after party

This year was my first year participating in the UBP from 5 minute for mom and I learned a lot (and ticked off google, they apparently do not like blog parties).

I was able to read of ton of financial blogs that I would not have found and now have many more people checking out my blog as well. I will be participating in the blog party next year, I hope. I now check a few more blogs on a regular basis, for example: 5 minutes for mom because of how they create a blogger community; frugally fabulous mom for all of her deal especially for children (I am a planner and we plan to have children soon after the wedding which is in 2011); and of course A Maui blog for all the information about Maui to help me plan my honeymoon.

This blog party has been so great for me, I have gotten great new contacts, a new information for both my present and future in all aspects of my life, so thanks to the great bloggers at 5 minutes for mom!