Between the excess of beer, the long hours, the rundown shoes you patch yourself and the inability to “go out” or do “anything fun”, existing on an entry level salary is like not existing at all. When compared to living away from home during four, five, six, or eight years of college life, entry level can feel like a punishment for not joining the workforce immediately. Though this week’s episode of Freakonomics proved that college graduates will earn more over the course of the employee life cycle than their less-educated peers, it’s still hard to survive today. Plus, the further away you were from an entry-level salary beforehand (say your parents were supporting you or you lived off student loans), the harder the adjustment.
According to a new study, entry-level jobs are increasing, meaning that more of us are going to start finding work (woohoo!), and less of us are going to start off with great salaries (boo). If entry-level jobs are in demand, and companies can get away with paying recent grads less than those with more experience, it is going to take a lot of flimsy paychecks and hard work to eventually land that leathery, oak finished office you envisioned on graduation day. Do find solace in hearing that the degree is still worth something though, because it means that no matter how far down your current position is on that slippery, gnarled, metaphorical ladder, you are valuable. Plus, you’re doing a lot better than 8.3% of Americans.
But, while an easier future is nice to think about, the fact remains that you are broke right now. I’m not an economist, but I do have some secrets to living well on little.
How to Live on Little
- Compare your Bills to your Friends’: After I started working at my entry-level position, I had to get used to making less money a week than what I had been earning as waitress and bartender. In time, I started to ask my roommates and friends what they were paying for car insurance, cellphone service, groceries, etc. I didn’t do this because I’m responsible, I did it because I was sinking. I realized I had been paying $30 a month for a gym membership I wasn’t using, over $50 more a month for car insurance than everyone I knew, and about $20 more a month on my cell phone. So, I quit the gym (because I wasn’t going anyway), changed car insurance providers and joined a family cell phone plan. I saved over $130 a month this way, which was huge. Learn where you can save on your set monthly bills, and then start using sites like Mint.com to set budgets and analyze the rest of your spending.
- Stop Going Out to Eat: Okay, not entirely. Try to limit eating out to the weekends, and even then only splurge on two meals or so. You have no idea how much money I saved once I started cooking at home as opposed to grabbing lunch at the office or accompanying my friends to dinner throughout the week. Plus, you’ll appreciate restaurant meals more once they’re a treat and you’ll probably lose weight.
- Go to the Outlets: You shouldn’t dress like an Olson Twin just because your salary is low. Well fitting, good looking clothing won’t only help you to feel more confident, but they are absolutely necessary in business. Dressing well at work will help you to move forward and may expedite the process entirely. I should know, I once landed a yearlong freelancing position based solely on my outfit. Visiting your local outlet mall will help you buy designer (or near designer) clothing without forcing you to eat Ramen for the rest of the month. Go online, find the outlet’s website, look up the weekly sales, and shop wisely. Even buying two items a week will help you slowly build up an impressive closet without breaking the bank. Plus, the stores in the malls or the fancy designers in your city are simply not an option right now. In fact, that brings me to….
- Be Realistic: I’d love to buy a new car, new pants, and a diamond necklace. I’d love it so much so that I actually have my next few big purchases already planned out. Unfortunately, those are my future plans, because big spending is not currently an option. It’s that simple. Running up a credit card bill just to afford yourself luxuries you can’t actually pay off is as dumb as running up a credit card bill to afford yourself luxuries you can’t actually pay off. You are not only stealing from yourself the chance to feel financially stable, but your also screwing your future self. A good credit score may be all you have right now, and the stronger your credit the more likely you’ll actually be able to one day afford those dream-list items. Think about it: no one is going to give a BWM to someone who can’t afford it.
- Look Ahead: Do you need to find a new place to rent in a year? Is your car going to die? Do you have to purchase a new computer? Look at the absolute expenses that are headed your way and never forget them. It’s harder to go to the bar three nights a week when that $1,500 deposit is sitting heavily on your mind.
- Drink at Home: Of course it’s important to go out sometimes, but for the most part, do your drinking at home. A six-pack from the liquor store is way cheaper than six beers at the bar. Invite your friends over and make a party out of it. You’ll save money and you won’t have to worry about finding a DD.
- Entertain Wisely: I’ll eventually write an entire thing about party throwing, but for now just remember: BYOB. Throwing BYOB parties saves a ton of money and leaves you with the leftovers (usually).
- Hang with Broke Friends: If your friends are rich, that’s awesome for them, but don’t expect to keep up with their spending habits. Try to hang around friends in a similar economic situation as yourself. You can plan days around fun, instead of cash flow, and you won’t be embarrassed to say “I can’t afford to eat there/do this/buy that”. If you spend your time with people spending their money, you’re going to want to spend yours too.
- Collect Grocery Store Cards: I have a store card to the two groceries stores I frequent and I try to buy store brands and sale items. At the end of the trip, my receipt tells me how much money I saved and I always feel like a good poor person, singing “I win at poverty!” repeatedly in my head. I don’t use coupons and I hate circulars, but if you can stomach such things then go for it. As far as I’m concerned, saving by keeping my eyes peeled for those red “Sale” signs is good enough for me.