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Tracking my expenses and income

In order to expedite the painful process of paying my law school loans, I decided it’d be a smart idea to keep a watchful eye on my income and expenses. After all, once you get past the rah-rah YouCanDoIt self-help talk, personal finance guides seem to boil down to (a) reduce your expenses; and (b) increase your income. Obviously, option (b) is much harder and more elusive but (a) is within everyone’s grasp.

The first step to reducing expenses is figuring out where the hell all my money is going. So, I went through my bank and credit card statements for February and got to the bottom of it. Here’s what I found:

Public Transportation $185.00
Gym $63.00
Kindle Unlimited $9.99
Beer $31.26
Entertainment $12.99
Gas $22.09
Food $30.91
Work-related $16.12
Parking $4.00
Restaurant $45.00
Cell phone $32.00
Uber/Lyft $16.00
Life & Disability Insurance $54.00
Student Loans $3,202.30
Google Drive $1.99
TOTAL: $3,726.65

I take the train to work every day, so that’s the transportation cost. Regarding Kindle Unlimited, I’ve since canceled this subscription. I have more than enough to read. The restaurant expense is an eye-popping $45. I would never spend this much, but a good friend unexpectedly came through town last month and insisted we meet at a restaurant. In general, I try to avoid restaurants like the plague since they’re money traps.

The gym expense is high. I’m a member of two gyms – one near home and one near work. The huge hours required of me at work recently has translated to a very sporadic attendance at the gym near work. I’m considering dropping the gym near work, which would save $45/month.

The beer expense: what can I say? I’ve got in the bad habit of wanting a couple beers when I get home from work to ease the tension and stress. After work, I’m often miserable and don’t get home until 10:30 or 11pm and beer helps take the edge off. I’m fully cognizant this isn’t a good habit and could lead down a very negative path, but it is what is it. I’m trying to make this blog about unvarnished honesty. Looking at the numbers now, $31.26 just seems like too much to spend on beer every month. That’s more than $375 a year! Granted, I enjoy it, but I don’t have the money to spare.

Even the entertainment cost of $12.99 just seems frivolous and childish. I think I bought a Kindle book for $4.99 and I also bought a couple episodes of Louis CK’s new show Horace and Pete (which was great, but I can’t justify the needless expense).

The work-related expense was some copying I had to do at the court. The court charges the unbelievable fee of $0.50 a page for the difficult service of photocopying. It’s a total racket, but the court in question has a monopoly, and hence pricing power, on copying case documents.

Uber and Lyft are premium services, which I would normally avoid, but I had a couple emergencies where I needed to dash off to court and it was either use those services or hail a cab, which would have been more time consuming and expensive. I will still aim to plan my schedule in such a manner that I won’t have to use these expensive services.

Obviously, student loans are the big, honking expense – 85.9% of my income. Yikes. My after-tax income in February was $3,911, so I only was able to save $184.35 after expenses.

Now that my 20s are behind me, I find myself contemplating issues that I seldom thought about before: retirement, savings, middle age, old age, etc. I look around and I see middle-aged and older adults seriously struggling with finances, with living situations, and just having trouble handling life. Becoming a well-adjusted, comfortable adult is not inevitable or even likely for most. Maybe it was my misplaced entitlement or young adult delusion, but I never considered that I would possibly be a middle-aged adult who would worry about food, housing, and relationships. I thought my strong academic performance would somehow protect me from the essential roughness and brutality of survival. But here I stand, foot firmly planted in my 30s, not an intimate relationship in sight, broke as broke can be, middling career accomplishments, don’t own a car, and living at home. Reality is a stark contrast to my early-20s vision of my future.

Perhaps all of this is just part of the process of finding your place in life. I’m not quite the genius my deluded teenage self thought I was. I’m not Elon Musk, Aaron Sorkin, or Thomas Edison. I am meant for the work-a-day life, to struggle, scrimp, and save, and not to ruminate on and solve the large and complex and not to create the remarkable or the beautiful. It could be that my struggles are part of coming to terms with being the grunt worker, the working Joe who you never read about in the news. Someone needs to figure out how many days you have (including weekends and federal holidays!) to file a cross claim. Someone needs to read the manual for the new legal practice management software.

My 30s have been nothing if not a coming to terms and a waking up to cold reality. Coming to terms with my faults and shortcomings. Coming to terms with my tendency to daydream, to have utterly misguided delusions of grandeur. Coming to terms with my struggles with concentration, with discipline, with motivation, with direction, with organization and planning, and just plain laziness. My gut screams at me when I have to scrutinize dull and turgid legal documents. I want to jump out of my office window when I receive discovery responses. A good friend told me recently that “you are where you’re supposed to be.” There’s a nugget of truth there. I am where I am – living with my folks in my early 30s, living with a tremendous amount of financial strain and scant professional success – because I have failed to fully confront, address, and rectify my shortcomings.

This has all been a bit of a tangent, but what are blogs for if they’re not for meandering tangents. This isn’t an annual shareholder’s report. This is a record of my journey back from the brink and back to solvency. Sadly, my story isn’t unique or all that shocking. My finances and life situation are pretty emblematic of a whole generation. From my perspective, student loans  and poor career options are why Millennials aren’t getting married, buying homes or cars, or starting businesses at the same clip as previous generations. I also think debt and wage issues are the fundamental driving force behind the rise of populist political candidates like Donald Trump and Bernie Sanders. People are barely scraping by and they see the head honchos at institutions that benefit from debt, taxes, and low wages – fat and happy federal government muckity mucks, Wall Street masters of the universe, sanctimonious and overpaid nonprofit and education professionals, C-level think tank and interest group pros, banking industry execs, and the like – just cleaning up and it makes them sick. The pitchforks are out and the populace wants someone to pay.

I don’t place the blame for my horrifying financial situation on anyone other than myself, but I can see how so many people are so enraged at current trends in our society. In any case, tangent over.

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Tips for plowing more of your paycheck into your student loans

I have managed to reduce my spending pretty drastically and I thought I would share some of the frugality strategies that work for me.

Keep a personal spending ledger

Keep a personal spending journal. I write down every expense in a notebook that I carry around with me. I don’t use an app or punch it into a Google Sheet on my phone. I believe the act of physically taking out a pen and recording the expense on actual paper embeds the reality of expenses in my mind. Every time I’m thinking about spending money, an image flashes in my head of writing the expense down in my notebook. It creates personal accountability.

With personal finance, things have become so abstracted with credit cards, Paypal and Stripe, online bills, etc. that it’s easy to conceive of money as nothing more than data. If you’re spending money by swiping a piece of plastic or clicking a few buttons, it almost doesn’t seem real. This is the same psychological phenomenon that casinos take advantage of when you use chips rather than currency to gamble. Losing $100 in chips doesn’t seem real, but if you had 100 one-dollar bills stacked on the blackjack table, you’d be furious about losing it.

Keeping a personal spending ledger reconnects me with my spending. If I know I have to write down the expenditure, it makes me think longer about a purchase (“Do I really need to pay the inflated price for a pack of gum at the gas station when I can wait and get it for 30% of the price at Walmart?”). It’s these little things that have an enormous cumulative effect on your life.

I keep a reporter’s notebook Moleskin (which, by the way, I would never buy now due to being overpriced. Moleskins are not worth the price, but I happened to have one laying around from my earlier, more profligate days) in my bag and I record my commuting expenses, food costs, and any other daily outflows.

Keeping a personal spending journal has made me want to learn more about accounting. The exercise of keeping a spending journal made me understand the challenge of categorizing costs (e.g., how to record a car insurance payment when you know you’re getting a refund, how to record tax-deductible commuting expenses). One of my personal projects over the next several months is getting a handle on accounting and bookkeeping methods. This seems like an essential life skill that everyone should know and one that will serve me well for the rest of my life.

Don’t go out to restaurants or bars

I have a friend who always wants to meet at a restaurant or bars – usually overpriced, hipster places full of unfriendly people. I don’t want to spend $9 on an unsatisfying beer. I told him that I’m trying to save money and if he wants to hang out somewhere else, that’s fine but I’m not going out to a restaurant or bar. He didn’t text back and if that’s the end of the friendship, so be it. If a friendship depends on spending money, then there’s not much of a foundation for an association and frankly, I’ve had quite enough of people who don’t bring value to my life.

This is all to say that I’ve pretty much stopped going to restaurants and bars. This small (some might not call it small) behavior change has lead to a pretty dramatic decrease in spending habits. You really have to be utterly ruthless about spending. I’ve got into the habit of reviewing my checking account daily and making sure nothing is falling through cracks.

Don’t buy snacks and drinks at Walgreens/CVS/Rite Aid

I had a bad habit of buying gum, nuts, energy drinks, and other various items at these chain pharmacy stores. But they’re all really a rip-off at these places. The pharmacy stores have better prices than 7-Eleven, but they’re still very overpriced. You’re better off getting these items at Walmart, Costco, Target, or another discount big box store. The chain pharmacy stores – CVS, Rite Aid, Walgreens, etc. – usually have higher prices than the big box stores. Avoid.

Get a weekend job

In my case, I’ve signed up for two weekend jobs. I’m going to deliver vegetables for a local startup for a few hours on Saturday and Sunday mornings. The pay isn’t great, but it will force me to get up early on the weekend and also every little bit helps in the battle against law school loans.

On Saturday and Sunday evenings, I have signed up to man the front desk for a condo building. The time commitment is significant (16 hours per weekend) and the pay is less than $14 an hour. You might think it’s crazy, but here’s the thing: I can study programming while I do this job. If all goes according to plan, I can get paid while learning skills that will improve my earnings. Yes, I won’t have a social life, but I didn’t have much of one in any case, so I’m not concerned about that. I’m 31 and my bar and party days are behind me. I’d rather build a foundation for a prosperous future than waste time in a bar or restaurant.

Even though these jobs don’t pay much, I think they’ll help me in more ways than merely generating income. It gets me in the “hustle” mindset to work like this on the weekends. Also, the front desk job will force me to stay in one place and study for hours every single weekend. It also gives me a good excuse for why I can’t “hang out” with people. For some reason, people have a hard time accepting that you’re studying and can’t hang out if you’re not in school, but won’t protest if you have a job to go to.

I’ve also generated a couple one-off technology gigs that will put a few hundred more toward the loans. These are things like making alterations to a WordPress site and providing some search optimization services for a local business. Unlike legal services, I’ve found that it’s pretty easy to get clients for technology services because there’s a real market demand. People don’t need lawyers very often, but plenty of people have technology challenges.

I’m in the earning mindset. If my job won’t pay me enough to make an impact on my loans, I have to take matters into my own hands. Since my law degree has had an awful return on investment (negative amortization!), I need to get creative and work my butt off. I’ve seen too many people who’re broke and desperate in their 40s (and, sadly, beyond) and I will do anything in my power to prevent that from happening.

Use the library and free learning resources

The government wastes vast sums of money and overpays its employees, but it does one thing right: libraries! Libraries don’t cost any more than the taxes you’re already forced to pay, so you might as well make use of this awesome resource.

I used to think libraries only had outdated books and other materials. Wrong. Most libraries have digital lending programs where you can find new releases in ebook and audiobook formats. You download the library app on your phone and you can instantly borrow books. It’s great. The app for my library is really easy to use and it’s not a hassle. I was using Audible and Downpour for audiobooks (I like to listen to audiobooks when running or working out), but the library has more than enough for me to listen to and it’s free. Needless to say, I canceled my Audible and Downpour subscriptions.

For free learning resources, I’ve found the Internet Archive and the Gutenberg Project to be full of fantastic books and educational materials. Want to learn about accounting, business, history, or pretty much anything else short of a new technology subject (there are PLENTY of free resources for those as well)? Definitely check out those websites. You could literally spend the rest of your life digesting the valuable information on those sites and it wouldn’t cost you a penny.

I was extremely despondent after finishing law school with huge debt and no job. For a while, I neglected the development of my intellect, which only worsened the decreased sense of agency that I had about my life. But I’ve begun using the Internet Archive and the Gutenberg Project and I’ve begun to enjoy learning once more. It’s satisfying, rewarding, engenders a sense of self-respect and self-reliance, and costs nothing. I can’t recommend self-education enough.

Loan status

I made a $1,500 payment toward my loans in the last couple weeks and hope to make a few more large payments in September. I’ll post numbers soon, but I wanted to check in and share some strategies and approaches that are working for me.