Thrift.

September 9th, 2010 § 3 comments

Let’s just start out by saying: the advice in this post is almost ENTIRELY drawn from “Things I learned the hard way.”  Though some of comes straight from Damon Darlin’s fantastic 2007 article for graduates.  (That’s right I said 2007.  As in, this is what I read when I graduated….before the stock market went into a black hole).  There is a certain value to falling on your face when it comes to managing personal finances.  But I think that value is extremely small when compared to the value of avoiding mistakes altogether by making smart(ish) decisions when you can.  I know that a lot of you all are coming from different backgrounds.  While many of you are red-cheeked-newly-minted BAs direct from your pastoral life at America’s various “Colleges on a Hill,” others have spent some time in the professional sphere, and others are “mid-career.”

So, as a starting point, while I think this advice might be useful to everyone, it is definitely geared toward those who are joining us straight from college, or after a stint in the spine-straighteningly terrifying current business climate.  Those of you with more experience managing 401(k) portfolios, your own health insurance, benefits, hell, even (I know, perish the thought) a 30-year fixed mortgage–please, by all means, throw some comments on the board.  I think we all aspire to one-day be “mid-career” and would love advice about how to get “there.”

Here’s the quick list, with details after the jump:

1) Understand Your Loan; 2) Auto-Pay; 3) When it comes to books…; 4) ATM fees are stupid; 5) Pack your lunch/drink MAPH coffee; 6) Tax-time; 7) Plan your adventures wisely; 8) Groceries; 9) Zip this; 10) Get a credit card and use it wisely

1) Understand your loan:  The government has taken over your student loans.  I don’t want to weigh in on a political point this early in the year, but keep track of the changes.  As WSJ reported last month, student loan debt now exceeds credit card debt in the United States.  Seriously.  So keep all of those forms in one place.  Or better yet, sign up for electronic alerts and keep everything in one email folder.   Most importantly, if you didn’t understand the terms of your loan when you signed up for it (and trust me, I’ve been there….just sign here, right?), learn them now before you have 1000 pages of reading per week.  You will get a six-month grace period at the conclusion of the year to start making payments, unless you enroll as a full-time student at another institution (which–please, we’re begging you–don’t apply this year).  For the vast majority of you, this means that the government will start asking for its money back on January 1, 2012.

Trust me, it’s not that far away.

2) Auto-Pay: When you sign up for new utilities with ComEd and People’s Gas; and commit to a new cable/internet contract with AT&T or Comcast (don’t ask which is better, they both suck), sign up for auto-pay.  Do it for your wireless bill while you’re at it.  It’s simple: you cannot be late on your bill if you’re paying it automatically.

And being late on your bills is a very bad thing.

NOW, do bear in mind, you still have to READ the bills that come to your email.  Comcast WILL try to charge you for service that you didn’t buy, and channels that you DO NOT WANT (*cough*Bravo*cough).  So if you don’t want to get pwned by cable companies, you still need to read the itemizations.  Did you really rent “Up in the Air” four times on-demand?  Did you??  I didn’t think so.

3) Look, when it comes to books, trust me, I understand.  We’re humanities nerds.  We want them.  We want to own, keep, cherish, mark, hold, organize, reorganize, and dust them.  So, rather than telling you to check books out at the library and make judicious use of free online resources (HA!), I’m just going to advise you to be smart about your purcheses.  Sign up for Amazon Prime (hell, if you’re THAT much of a bibliophile, sign up for the Amazon Awards card….SEE BELOW), and buy a Sem Co-Op membership.  Let’s be honest.  Amazon will be cheaper a good 80% of the time, but often you will want some instant gratification.  In my book, the Amazon super-saver shipping more than justifies the annual membership cost–let alone the fact that the book discounts are often outrageous.  BUT, a Sem-Coop membership will save you 10% on all books, and it’s always nice to buy local blah blah blah.

Another fantastic option is Powell’s Books.  Especially on September 26 during what’s known in Hyde Park as “Midnight Madness.”  All books under $50 at Powell’s are 50% off with the purchase of a tote bag (the ownership of which, in turn, gets you regular monthly discounts throughout the year).  This is the time to go absolutely bananas and buy all those art books you know you want to put on your coffee table.

4) ATM fees are stupid: Chicago has a HUGE amount of cash-only establishments (Jimmy’s is a primary offender here [yet ANOTHER reason why the Cove is superior {they take debit}]).  By my estimation the best bank for use in Hyde Park and throughout Chicago (especially if home is on the East Coast) is Chase.  Get a Chase account or browbeat your own bank into getting rid of ATM charges.  Otherwise, you’re just basically setting your money on fire.  If you’re REALLY ambitious, use your Chase checking account as a means of controlling monthly spending.  Schedule a monthly transfer from your home account into the Chase checking and use ONLY that money monthly for booze, food, Comcast on-demand rentals of “Up in the Air,” and other essentials.

5) Pack your lunch and drink MAPH Coffee: I love working at the Bourgeois Pig more than anyone else in the universe.  But I try not to do it more than once a week–that is, when caffeine is what you need, either brew your own, or come hang out in the lounge and drink our horrible brew.  On your fixed income of Student Loan money, think about how great it would be to have roughly $2 per day back ($4 if you’re a soy-latte drinker….also, what the hell are you doing drinking soy lattes?).

As for lunch, Anscombe Lounge is being slowly renovated and filled with mood-improving furniture and plants.  Go there after Core, drink MAPH coffee, and eat your peanut butter and jelly sandwiches together.  It’s so much better than going to Div School and spending $7.00 on soggy pad-Thai, especially on cold-ish fall days when you can hang out with the windows open.

6) Tax-Time: the IRS LOVES students.  Your new best friend should be the IRS Tax benefits for Education.  You can deduct supplies up to a certain amount.  You can also deduct any payments you have made toward student loans.  Be smart and use the benefits that are available to you.

7) Plan your adventures wisely: While it should be clear by now that we here at MAPH Central are adamant about getting out of Hyde Park, put a little thought into your adventures first.  Here are several suggestions:

  • Groupon: The best way to get deals on some fun stuff in Chi.  There are other rough equivalents, but to my mind Groupon is still the best.
  • ArtsPass: Can’t emphasize enough how useful free admission to Chicago’s museums will be to your social life and well-being.  Take advantage of your student ID!
  • @brokehipster: Even if you’re not on Twitter (though you should be, to follow the very useful @maphmentors and the totally hip @kanyewest) you can get great ideas for saving money by checking in here.

8) Groceries: Hyde Park is really slim on options for groceries.  Hyde Park Produce and Treasure Island are the two largest options, and each has its own following.  Overall, I think it’s a wash when it comes to prices, but be cognizant of the options at both.  Some things (eg cereal, milk, various dry goods, and SOME types of produce) are just cheaper at Treasure Island.  Don’t be one of those people who will ONLY shop at Hyde Park Produce.

9) Zip this: use public transportation, nuff said.  I still think these hourly car service things are scams.  Correct me if you have proven otherwise

10) Get a credit card and use it wisely: You have a student loan.  You are an adult.  Build your credit and get something that you can use regularly and pay regularly (see auto-pay above).  I find the United MileagePlus card to be extremely useful in Chicago, especially as someone who flies out of O’Hare a lot.  Triple miles on United purchases and double on groceries and dining.  As long as you’re hemorrhaging cash, you might as well be getting points.  If this is your first credit card, for the love of God please do not sign up for more than one.  While Student Loans are now a bigger burden on American consumers than Credit Card Debt, this does not mean that we need to try to reverse the trend.

And for those of you that have read this far, remember: mentors are here for all sorts of advice-giving.  Even the giving of advice that we ourselves are not good at following (see all above).  If you’re stressed about money in any way at all, come talk to us and we can tell you stories of disastrous champagne toasts at The Roof, dinners at The Publican that we can’t afford, &tc.

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§ 3 Responses to Thrift."

  • stillman says:

    Der, when I run out a da moneys I go to da magic money box and put in da magic number!

  • [...] knew how to manage our time, and had self-control when it comes to budgeting, we’d all pack lunch.  But let’s face it, it’s hard to get up in the morning, period–let alone [...]

  • Margaret F-B says:

    All ATMS on campus and near campus are Citibank, fyi. I am not a Citibank customer, but I *was* a Chase customer. AND GUESS WHAT THERE’S A CHASE ATM BY THE AU BON PAIN IN THE UofC HOSPITALS!!!!!!!!!!!!!!

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