Shortly after I finished college and moved to Boston, I began working my first full-time job at a non-profit health care organization. As a program assistant, I made just under $30,000 a year. Below you’ll find the 10 ways I saved money and lived debt-free on a $30,000 salary!
1- Get a Roommate. I initially rented an apartment for $1,000 a month by myself. This was a big mistake. After several months of scrimping by, I decided that sharing my space and paying $500 a month less, made much more financial sense. If you need a roommate ask friends and family first. If you can’t share with someone you know, try craigslist or your local newspaper classifieds. Don’t spend more then a third of your take home pay on housing. If you can’t afford your rent, you will end up going into debt.
2- Say “No.” When You Can’t Afford Something. Be honest with your friends about your financial situation. “I work for a non-profit…” was usually a sufficient explanation as to why I wasn’t willing to chip in on expensive wedding gifts or “go in on” a beach house. Don’t let your broke friends convince you to make bad financial decisions. If your friends tease you, they’re probably secretly jealous you have the fortitude and commonsense to say “No”. If they try to bully you into spending money, ditch them! People who encourage you to spend money you don’t have are not your friends, they’re debt enablers.
3- Barter and Trade. If you have a particular skill or can offer a service, barter with your friends and neighbors. I often babysat for friends in exchange for pet sitting while I was on vacation. I saved about $50.00 a day in boarding fees and my neighbors got a reliable sitter for free. Be honest and only make trades that both parties think are fair.
4- Cook at home. When I made $30,000 a year I cooked most of my meals at home. An average takeout dinner will set you back about $10.00. For that same amount of money, you could buy a pre-cooked rotisserie chicken, a bag of potatoes, and a can of peas. The meal you bought at the grocery store is more nutritious and will last longer. To stay debt-free on a $30,000 salary, you need to be willing to cut back on luxuries like dining out.
5- Have an Emergency Fund. When you make $30,000 a year, unanticipated expenses will cause unprepared individuals to have a financial meltdown. I always tried to put aside 3-6 months’ worth of expenses in a savings account for emergencies. Several times when I had to do minor car repairs, I was pleased to be able to dip into my savings and not go into debt. Emergencies happen, whether you save for them or not!
6- Don’t Buy Things- This seems pretty obvious, but don’t buy things you don’t need or can’t afford. It’s tempting to buy things that you want immediately, but practice a little self-restraint. Each month I let myself have $150.00 of “blow money” to spend on whatever I wanted. When the money was gone, I stopped shopping. If I wanted a $300 wool jacket, I saved for two months to buy it.
7- Stay at home. When I was making $30,000 a year, I had to limit number of times I went out in a month. Instead of spending money going to the movies or meeting friends for happy hour, I invited friends to my apartment to have a few drinks and watch borrowed DVDs. While many of my friends were racking up thousands of dollars of credit card debt on food and entertainment, I was able to save money each month and pay down my student loans.
8- Use Public Transportation. If you live in a city that has decent public transportation, use it. When I lived in Boston I took the T everywhere. Not only will you save money on gas, parking and maintenance on your car, you’ll also be saving the environment at the same time.
9- Don’t Compare Yourself to Others- When I made $30,000 a year, I assumed that many of my friends were making much more money then me. To be honest, I felt jealous and even a little bad for myself that I had chosen a job that paid so little compared to what my peers made. Don’t have a pity party for yourself! Years later, I found out that many of those friends also made $30,000 a year, and are now in over their head in credit card debt.
10- The Best Things in Life are Free. Take advantage of everything in your area that’s free. Hike in local parks, attend free talks at the local community college, sign up for a book club at the library et cetera. It’s amazing how many events, classes, and performances are available for free to the public. Some of the best Shakespeare performances I’ve ever seen have been free on the Boston Common. Ask around and you might be surprised how many free things do exist in your area.
This is an abbreviated list of some of the things I did to save money and live debt-free when I was making a $30,000 a year salary. There are so many more! Don’t be afraid to “think outside of the box”. Many of my favorite memories of living in Boston, stem from one or more of these money saving tips.