The Recessionista's Ultimate Guide to Finances

Of utmost concern to Americans right now is the economy. How do we save money? How do we get rid of debt? How do we start living within our means? These aren't easy questions to answer, especially in our present-day Culture of Debt. Our get-rich-quick, do a little/gain a lot, expedient, fast-food mentality has driven us to the brink of economic collapse. It's scary. However, there are tons of things you can be doing right now to save money, pay off your debt and live a more frugal lifestyle, and most of the solutions are at your fingertips.


Step One: Your Budget
Your very first step should be creating a budget. That means you should sign up for Mint. Mint is a reputable online program where you enter all of your accounts: credit card, student loans, paypal, savings, checking, IRA, etc. and it consolidates it all into one coherent overview. It's really genius. It maps out trends in your spending, warns you when you are close to your limits, and helps you figure out a budget that is perfectly tailored to your needs. It does this automatically, everyday. It takes so much of the guesswork out of personal finance. I am in love with Mint.com.

[If you're more old-school here is a great budget that you can print out monthly and keep in a binder so that you can keep track of your spending: Budget spreadsheet.]

Set your budget and stick to it. No really. Stick to it. Balance your checkbook and know the amount you have in your account at all times. Knowledge is power. Pay every account on time. It's not hard, but it does take some planning. If you have trouble keeping track of what you owe and when it's due, I recommend signing up for the PNC Virtual Wallet. It includes a really awesome calendar program that highlights when things are due, the ideal time to pay for them, and gives you red alerts when you are nearing your due date. I used to roll with an Excel spreadsheet to track how much I owe, to whom, and when it is due. Now, I use the PNC Virutal Wallet. I also stamp every bill that I've paid with the date that I paid it, in case I need to go back in my records and dispute anything. I track my credit score monthly (it's worth the monthly payment!) and I do a check of my credit report every 6 months (Go to Fico for a free copy of your credit report).

None of this is difficult, but it is time consuming. That is why I sit down every Sunday and I map out what my budget is for the week. The best part is, my PNC Virutal Wallet account sent me a debit card, so I put spending money into that account and only use it for eating out, groceries, gas and clothes. All of my "bill" money stays in my regular BofA checking account. It's so simple. If I don't have enough in my PNC account, then I don't spend any money. Figure out your State of the Finances day and check in with your money weekly. It's better to face every challenge head-on than to pretend like your finances are fine and get hit with a billion overdraft fees because you weren't paying attention.

For things that fluctuate in price, like gas, it's better to hedge your bets. You can actually use gas prices as your own hedge fund. Ramit at I will teach you to be rich gives a thorough lesson on gas price hedge funding. It's something you can do from the comfort of your own internet and it takes maybe 15 minutes to set up. It's easy to do and if gas prices go back up, you'll still be on Easy Street.

Also, try the separate accounts method. Open two checking accounts. Use one for your bills and utilities, and one for your purchases. You gotta keep 'em separated. Keep only what you budget for expenses like gas, groceries, and entertainment in the latter account. Only carry around the debit card for the account for purchases. That way, you'll never go over budget and your spending will never interfere with your ability to pay rent.





Step Two: Your Savings Account
Suze Orman is my financial guru. I adore her. However, we disagree in one area: savings. She says that if you're broke (like I am) and have debt (like I do) to not have savings and instead to put every dime that you would put into savings toward your debt. I disagree. I like having a little nest egg, just in case. Ideally, you would be able to put 10% of your earnings into savings. If you can't do that, just make sure you put a little bit every month.

There are two great savings accounts you could use:

1) Emigrant Direct American Dreams Savings Account. I use this one. It has a 3.0% APY (annual percentage yield). This is the highest APY I've found for a free savings account anywhere.

2) Most people are partial to the ING Direct Orange Savings Account. They offer a 2.75% APY. I think they are a great company to do business with, but I prefer Emigrant Direct.

Putting money into a savings account with a higher APY means that your money, just sitting there, is growing. It might be in tiny increments, and it's basically the lowest risk way to invest your money, but look at it this way:

If you save $100 a month for 30 years, you would have $36,000. If you save $100 a month for 30 years in a savings account that has 3.0% APY you will have $37,080. So by doing nothing, you will make $1,080. I know it's not much, but it really is something for nothing.

Higher risk accounts usually mean higher yield over time. If you want to invest in mutual funds, CD's and the stock market, I recommend getting a trusted investment advisor to handle your accounts. You want an investment advisor with a proven track record who will be communicative about your money. If your IA that you signed up with a year ago hasn't contacted you at least 3 times in that year, they're not a good IA.







Step Three: Education
It is paramount that you begin educating yourself about money. It's a stereotype that women are bad with money, that they don't understand its value, and that they spend all of their money on clothes and shoes (see the Confessions of a Shopaholic series). Do your part toward putting an end to this shitty stereotype by getting on top of your finances. Here are some great resources for educating yourself:


Smart Money

Suze Orman Resource Center

Free Money Finance

The Consumerist (my personal favorite)

Credit Boards - A forum for people who are taking control of their credit situations.

Makeupalley Work and Money Board - A messageboard for women who have questions about their jobs and finances.

Become knowledgeable about the Fair Debt Collection Practices Act

Saving Advice

Consumer Affairs

Better Business Bureau






Step Four: How to Save Money:
Saving money almost seems to be easier than making money. With small adjustments like bringing a bag lunch to work, replacing your showerhead with a water-saving showerhead ($5 cost, with an annual savings of $240), eliminating Starbucks and drinking coffee at work, or turning your thermostat down to 65 degrees in the winter and wearing layers in your home can save you hundreds upon hundreds of dollars a year. Yet, this is often money we don't actually think about because it doesn't appear in our account in lump sums like payments do. Still, it is important to save money when the economy is in recession. Here are some good articles on how to do just that:

7 Radical Ways to Save Money

Save Money on Practically Everything


75 Painless Money-Saving Tips


My best advice to you: STOP EATING OUT. Preparing meals at home is cheaper, healthier and often tastier. The average person in America spends $2,300 a year eating out. Think of what you could with $2,300 a year. Even eating out half the time you normally do could put $1150 back in your pocket!!


Another good piece of advice: brew your own beer! Stop spending $100 tabs at the bar, and start a fun home-brewery project. Not only will you get to learn about a fascinating process, but you will get to add your own personal touch to it. Who knows? Maybe you'll create a secret recipe that becomes world famous and you'll open a brewery to rival the likes of Rogue and Dogfishhead. Here's hoping!







Step Five: Making A Quick Buck:
I have been desperately poor before. Like, Broke Diaries poor. If you are experiencing severe economic hardship, there are ways to put cash in your pocket, but I reserve these strategies only for when I've fallen on desperate times. Luckily, this year, it's only happened once due to a very unexpected car repair crisis that cost me over $1,000 to fix. You could make a quick $500 if you really try.

1) Sell your clothes, shoes and accessories. Try places like Plato's Closet, Buffalo Exchange and Daisy Exchange which give you cash up front for your clothes. I made $150 in one go at Daisy Exchange. If you don't need your money immediately, sell them at a nice consignment store.

2) Sell your DVD's and CD's. FYE, Rasputin's, Amoeba Records and other stores will give you cash for your items. I've made $85 selling off crap CD's to FYE. Make sure you stuff is in good condition, though.

3) Give blood/plasma. Make $40-80 a pop.

4) Go to the local food bank. Free food is just as good as cash in your pocket.

5) Sell your items on Craigslist. I sold my (precious) vintage poker table for $100. It took up tons of space and my cats kept using it as a giant cat bed, so I decided to get rid of it. It paid for my groceries for 2 weeks!

6) Pawn your jewelry, appliances, electronics, and misc. items at the pawn store. Don't feel bad about selling at a pawn shop. I just read an article that said that selling at pawn shops and consignment shops is at an all time high. Everyone's doing it.

7) Sell your services on Craiglist. No, not those services. I'm talking dog-walking, babysitting and other innocent things like that.

These steps could leave you with several hundred dollars cash, and with your back against the wall, this money just might be the bail-out you needed.








Step Six: Managing Your Debt:
Debt can be a terrifying monolith that stands in the way of your financial freedom. You can't wish it away; it absolutely has to be tackled head-on. There are some great programs out there that help you get of debt, but there are a million more shady and bad programs out there that will screw up your finances and leave you destitute. That's why it's always good to research the hell out of any "Get out of Debt" programs. Luckily, I've done the research for you and have found two incredible programs. One asks you to make enormous lifestyle changes and helps you on the path to becoming debt free. The other is a reputable credit counseling agency that you can pay a small sum to every month in order that they interact with your credit card companies on your behalf and make your payments and help lower your interest rate.

The first program was created by Dave Ramsey. You might have heard his show on the radio before. He sincerely believes that everyone can be debt free with hard work and dedication. The only thing is, his program is Christian-based, but in reading through it I found that it wasn't too preachy or off-putting.


The second program is Greenpath Solutions. I did extensive research and so many credit counseling agencies had hundreds of consumer reports filed against them. Greenpath has none. Furthermore, they are not-for-profit and are accredited by the Council on Accreditation (COA). If you need help with debt-consolidation, credit counseling, and bankruptcy counseling this is the place to go.

If you are having problems with your credit cards, you should definitely read this article: The Top 10 Credit Mistakes. Credit cards are a gigantic pitfall. I froze all of mine up around a year ago. I do not use them and I hope to become debt-free. I know that credit is important, but I'm in the Recovering My Life from Credit Card Damage stage right now. Maybe one day, after I've paid them off, I'll feel ready to use them responsibly.







Step Seven: Read Inspiring Finance Blogs:
These are some blogs I read that I find to be very inspiring. The first two are my absolute favorites:

I Will Teach You To Be Rich
Make Love, Not Debt
Blunt Money
Toxic Money
The Simple Dollar
Get Rich Slowly
Frugal Underground
English Major Money
Blogging Away Debt
How I Save Money
No More Spending
Three Bean Salad
Stop Buying Crap
Single Broke Female






Step Eight: Be a Smart Gift Giver:
As an Adbusters girl, I am all about not spending a dime on Christmas. It's too commerical. It's too greedy. It's expensive as hell. However, there is a part of me that loves giving gifts. I actually love giving gifts more than I love receiving them. I get absolutely giddy when I buy gifts for people. So, this year, I have a teeny tiny Christmas budget and I am only buying 5 people presents. Some of it I'm making, and some of it I'm getting someone else to make for me (thanks Etsy.com!). Here are some ways for you to cut wayyyyy back on your holiday spending:


A Financially Free Holiday

Getting Crafty For Fun Holiday Frugality

Gifts from Your Kitchen







Steph Nine:Frugal Entertainment:
You don't have to spend hundreds of dollars to have fun. I promise. Here is a list of things to do that are still a blast (some may or may not apply depending on the area you live in):

1) Dollar movies! So, you might have to wait a little longer to see The Dark Knight in theaters, but you only have to shell out $1. I think that's a decent compromise.

2) Hiking, bird watching, trail-walking, lake-driving and anything else remotely outdoorsy.

3) Fly a kite. No, really. Go fly a kite.

4) Go to free concerts! Check your local listings.

5) Go to art galleries.

6) Hit up all the local music, film and art festivals.

7) Go to a play. It's especially cheap if you're a student. College campuses also put on quality productions that are dirt cheap.

8) Go to the metro library. Check out awesome movies for free and even check out their comic book selection!

9) Go see a local sports game.

10) Listen to podcasts. I highly recommend the Ricky Gervais Show. It's amazing.

11) Have a nintendo tournament.

12) Have your friends over for a potluck where everyone contributes a dish. Have a theme like "Hot & Spicy" or something awesome like that.

13) Knit!

14) Photograph old buildings in your city.

15) Go to the museum.

16) Build a fort. Indoor or outdoor - the decision is yours.

17) Do the Sunday New York Times crossword puzzle. Don't cheat.

18) Start a poker night. Play Texas Hold 'Em with a $5 buy-in.

19) Host your own wine tasting party. Charge people a cover at the door.

20) Have a mini-road trip. Pick a destination within 1.5 hours of your home. Pack some snacks and make a playlist. Take loads of pictures along the way and stop everywhere that looks interesting - even at the Giant Ball of Yarn.

See, there are tons of things to do that are interesting, cheap and fun. You just gotta stretch your creative mind grapes.





Step Ten: Smart Shopping
Did you know that you could go blow $100 at JCrew and make money back? Did you know that you don't ever have to buy retail again? It's totally true. For the internet and money savvy there are all kinds of things you can do to be a frugal, but incredibly well-dressed, fashionista.

Learn how to be a smart consumer. I pick up the Sunday paper and I clip coupons! I buy stuff from Aldi! I buy meat at the asian market (it's fresher, actually)! I buy my produce at the Farmer's Market! I bake my own bread! I cut corners, but I also feel proud of doing it. You can too.

Join Fat Wallet. Fat Wallet is a site that has coupon codes, allows you to compare prices, and also has hundreds of websites that are a part of their system that give you cashback on purchases. Join Fat Wallet and follow their links to Target, Hobby Lobby, Amazon, and more. Each time you'll get between 2-14% back on your purchases. Not bad!

If you are a subscriber to Lucky Magazine, you can join Lucky Rewards and get up to 15% cashback from retailers like Beauty.com, Zappos, Target, Ann Taylor Loft, Saks Fifth Avenue, Barnes & Noble, Macy's, Urban Outfitters, Itunes, and Avon.

Coupon Suzy has printable coupons that are actually really good. I printed off coupons from that site yesterday and will be saving around $8 on my Thanksgiving meal buying (on only 4 ingredients! sweet!). Coupon clipping is so old school, but it's really making a comeback. I actually kind of like clipping coupons from the Sunday paper. It makes me feel like a 50's housewife. :)

Last, but certainly not least, never pay retail again by using coupon codes. Here are my favorite sources for codes:

Reesycakes

Retail Me Not

Grechen's Closet






Okay, I am just about tapped out of advice and my wrists are starting to hurt from all of this research and typing. I hope I was able to bring some good advice and resources to the table. Here's to living within your means, saving buckets of money, and pulling yourself out of debt!


*Clink*









***** I have not been compensated by any of the aforementioned sites to write about them. This blog is completely independent of any advertiser. My opinions are entirely my own and for the benefit of my reader. I personally use nearly 100% of the sites I mentioned, and I have done all of the research included in this blog post on my own. Thanks for reading!*****