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There is a huge difference between being cheap, and being frugal. These two words get used interchangeably, when they really are completely different. Yes, there are some things that will cross lines, but for the most part they are very different.
Cheap means that you never spend any money and watch your money very closely. When you are cheap you spend the least amount of money.
When shopping, you simply are looking for the cheapest cost. When in reality there are many other pieces in play when determining “cost.”
Being cheap is usually driven from a place of scarcity or necessity. You don’t feel in control of your money, so you feel you must hold onto it.
Being frugal comes from a place of abundance. You have power over your money and know exactly where it is going.
Instead of thinking solely about price, you take into consideration multiple value points. You think about cost, you think about how it helps others, you think about how long it will last.
These are just a few points, but you get the idea. Being frugal is being wise with your money and consciously choosing to be frugal with it.
Being Frugal vs. Being Cheap
An example of the difference between being cheap vs. being frugal that I experienced was bringing water to work. I would buy the cheapest water bottles I could find to refill when I was on the go in graduate school.
I was busy. I worked 8-3 and then had class from 4-7 every single day. I was working full time and attending school full time and making a measly $1,000/month on average.
What I found was that I was needing to buy new ones regularly because they were constantly breaking. I was living in a scarcity mindset because I didn’t have any extra cash each month.
Once I graduated, got my teaching job, and got my finances in order, I was able to move towards an abundance mindset. I no longer needed to live in this scarcity area.
I was able to see the other value points once I moved to an abundance mindset. My low cost water bottles I realized didn’t have much value because they were constantly breaking.
I took this into consideration, along with that they were always made from plastic, and researched higher value water bottles. Now, I’ve had mine for 3 years and it has dents and scratches, but it still serves the purpose of holding water.
This is just one example, but it serves as a reminder that there is a difference between being cheap and being frugal. It is all about the mindset you are currently living from. What are your thoughts about being cheap vs. being frugal?
I know when I first realized how much student loan debt I actually had, I got angry. Afterwards, I viewed it as a challenge and just wanted to tackle it head on, paying it down as fast as possible. I spent every spare moment I had in grad school searching ways to pay down debt quickly, save more, make more money, anything to get this debt paid off faster. I made quick easy changes that didn’t change my lifestyle, but made me save a lot more money. By making these changes I was able to pay down a lot more debt while I was in grad school making about $1,200 a month.
1. Plan your meals each week before you go to the store
Meal planning overwhelms me, I just don’t have the patient or the time right now to learn a good system for it. So, I don’t do it as well as I’d like to. But, I do have a plan for the week generally before I go to the grocery store and always have a list. This way I know exactly what I need to buy for the week and I throw away less food.
2. Pay attention to portion sizes
I buy mostly organic foods, which can be expensive. Especially when it comes to meat. I used to always eat an entire chicken breast for my dinner with a veggie. Not anymore. I eat about half of a chicken breast, depending on the size, with brown rice and a veggie. Rice is SO much cheaper than chicken, so this allows me to get two dinners, sometimes three if it’s bigger, using one chicken breast.
3. Baby wipes
I can’t even put into words how wonderful these little wipes are. I used to spend a ridiculous amount of money on make up removing wipes. Out of pure convenience, I just couldn’t give them up when I started trying to save more money. When I found out that baby wipes work in the same way, I had to try it. I have very sensitive skin and using the sensitive skin fragrance free baby wipes I had no problems.
4. Sign up for store rewards cards
The best one I have is Rite Aid, I currently get 20% off everything in store because my family shops there so much. On top of that, I switched to using all store brand products and those usually have an additional discount. For me, this works for my budget because it is so convenient. I wish I had the time to make my own products to use because it would be even cheaper, but being a first year teacher makes my time limited!
5. Waiting to buy
This one was very hard for me at first. I can be stubborn and want to get an item right away. I quickly realized that I was missing out sometimes on great sales or realizing that I didn’t actually want what I was buying afterwards. Once I started waiting to buy, I saved so much money because I was no longer impulse buying. If I still wanted the item after doing all my research and finding the best deal, I went ahead and got it. If I realized it wasn’t what I wanted, then I saved myself the wasted money on something I didn’t actually want.
These are just a few tips that I have been using to save money that I find to be very simple changes that made a difference in my budget each month. The easiest thing to do is look at your spending habits and find ways to make slight adjustments or ways to make what you’re currently doing cheaper. What are some ways that you save money?
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So, the day finally arrived that I had been anxiously waiting for, my first student loan bill arrived in the mail. I just finished my graduate studies in August and knew it was coming. My private loans did not have a grace period, so I assumed my first bill would most likely be due by November. Sure enough, my first payment is due November 2nd. Before I got the bill, I wasn’t sure how much my payments were going to be each month. I guessed that they would be around $1,500 a month because that’s what my sister pays with a similar amount of debt. Of course, I budgeted for the worst and went for $2,000, since I went to grad school. It turns out all the debt I paid off during grad school was worth it, my private student loan payment is $1,400, much less than I thought it would be. My federal student loan payment was originally $600 each month, but I switched to an income based repayment plan and got it lowered to $250. It was a tough decision to switch to a different payment plan, but I wanted to be able to put as much money to my private loans, since they have much larger interest rates.
Where to Begin: Get Angry
Like I have mentioned in previous posts about my amount of debt, when I first really acknowledged the amount of debt I had, I felt like I would never be able to pay that off. I mean, $200K is a massive amount of debt. I don’t want to be paying this off still when my children are starting college, which is what will happen if I stick to the 30 year repayment plan. Honestly, that’s what really lit the fire under my butt, knowing I wanted to buy a house, have kids, send them to college, things that will be much more difficult if I have this massive amount of debt looming over my head. Plus, who wants to be paying off their student loans at age 50, definitely not this girl. Get angry at your student loans, put things into perspective and get crazy mad at that large sum of money that is preventing you from doing more things and saving more money. And just think about how nice it will be once it is all paid off 🙂
Create a Plan to Payoff the Debt
Once you have reasons to motivate yourself to payoff your debt, create a plan. Some people need to use the snowball method because they need motivation in the beginning to get going. Others think more long term and prefer a method that allows them to save the most amount of money, or the avalanche method. Personally, since I have such a large amount of debt, I’m thinking long term and how I can save the most amount of money. So, I’m sticking with the avalanche method. This means that right now I am focusing on one of my debts that has a 8.05% interest rate and started at just above $40,000 (I’m proud to say that this debt is now at $12,000 after chipping away at it for the last year during grad school, WOOHOO!!!). After this debt is paid off I will move onto my next largest interest rate and so on. If two loans have the same interest rate, then I pick the loan that is largest amount. I strongly recommend using ReadyForZero, I basically swear by this website in my debt payoff. It does take some time to type in all the information each month, but it provides me with a graph of my progress and when I’ll be debt free. Also, it’s completely free and has an app that allows me to check my progress wherever. I find it extremely motivating to see my daily interest go down after I make all my payments each month and to see how much sooner my debt payoff date is.
Update June 2016: I officially paid off that first loan!!! This means that I have now moved onto my next focus loan, which also has a 8.05% interest rate, but it is much smaller, only $16,000. I plan to pay this one off in one year, June 2017.
Update March 2017: I paid off my second loan 3 months early! I now have no loans with an 8% interest rate, finally! Now onto the next one.Also, ReadyForZero no longer offers their service. I have finally found a tool that works well and I find it very motivating and helpful in my debt payoff. Check out my review of the website!
How Much to Pay Each Month
It can be difficult to decide how much you can afford to pay towards your debt each month. I strongly recommend paying extra each month, any extra money you have, even if its $20, can make a difference in your debt payoff date. For me, I can afford my required payment in one paycheck, so I pay my bill on the 15th, when I’m paid. I never budget for my additional payment. This may sound odd to some people, and for a lot of people this might not work. However, I am currently in a very different situation than most. After I finished grad school, I moved back in with my parents in order to really tackle this debt, and they live 20 minutes from my job. This means that I don’t have many bills each month. Also, I work other jobs each month, like tutoring and babysitting, that make my income vary month to month. I do budget for gas each month, my bills, my 2 savings account, and my 403b account. You’ll notice that I do save each month, it’s not much, about $250 across the 3 accounts, but while I’m living with my parents I want to make sure I’m saving some money while I can. Since I pay my bill on the 15th each month, this allows me to make my additional payment at the end of the month when I am paid again. This is when I go through my budget for the month and see how much money I have left over that can go towards my debt. I hope to be able to pay an additional $1,000 each month.
Update June 2016: Since writing this post my monthly payment plan has completely changed, I found ways to make it much more aggressive. I made it a goal for myself to pay off all my student loans before I turn 31, that’s in 7 years. So, I went to my ReadyForZero account and changed my debt payoff date to determine what I would need to pay each month to pay it off by then. Turns out an extra $1,000 allows me to be debt free by my 31st birthday. I’m currently paying at least $2,600 each month with my teacher salary, living at my parent’s house (thanks Mom and Dad!), working extra jobs, and lowering my savings withdrawn each month. Instead of $250 I only put $125 into savings each month so that I can focus on my student loans.
This system might not work for you, but it’s what is working for me and my current situation. If I wasn’t living at my parent’s house, I don’t think this system would work for me since I probably would not be able to afford paying my entire bill in my one paycheck. What’s your debt payoff plan? What strategies have worked for you?
Ever since I can remember I have dreamed about having my own classroom someday. As I worked through my undergrad program, that dream seemed to be getting closer and closer. Just thinking about it would get me excited to finally do what I have wanted for my entire life. But then reality came crashing down, teachers have to pay for their own supplies and books?! WHAT?! The thought of stocking an entire classroom library like the ones I had seen in my placements, made me sick to my stomach. How was I going to be able to afford all of those books?? Now that I am less than a month away from starting my first year, I have become very creative in my ways of stocking my classroom library with books. Here are some ways that I have found books for my classroom, for cheap!
1. Tell People You’re a Teacher
Seriously, whenever I am buying anything for my classroom I tell people I’m a teacher. Usually, they can tell. I mean come on, who else buys that many school supplies in one trip, or that many books in one haul. No one. Except teachers. I can’t say it has always worked for me, but sometimes there is a discount that I didn’t know about. The best place to tell people you’re a teacher is at garage sales 🙂
2. Garage Sales
I can’t tell you how much free stuff I have been given from people hosting garage sales after sharing with them I’m a teacher. They’re trying to get rid of their stuff, and I will gladly take it off their hands 😉 I’ve picked up school supplies, storage bins, children’s books, and so much more at garage sales. It’s such a great way to get things for so much cheaper. But, I’ll warn you, go in with a plan, know what you’re looking for before you get there. Otherwise, you’re aimlessly looking at stuff and the next thing you know you have a bunch of stuff you don’t actually need sitting in your house.
3. Ask Family/Friends/Anybody That Will Listen
I’ve had a lot of luck asking people I know for things. Everyone knows I’m a teacher, so whenever they are getting rid of things, they call me. I don’t always need or take the things they are offering, but when I do it’s always nice. A lot of families I know will get rid of the books their kids no longer read, I gladly take those off their hands.
4. Book Sale Fundraisers
This is my all time favorite. Last weekend there was a book sale fundraiser by my house. It was book heaven. I don’t think I can even accurately describe the scene that was this fundraiser. It was just that amazing. Imagine a middle school cafeteria with every table piled with books, and all the books being under a dollar. AND THE BOOKS WERE ORGANIZED BY GENRE AND SUBJECT. There was even an entire section for children and young adults, and within the section it was organized by grade level. It made my searching so much easier. I ended up leaving with 53 books for 53 dollars and it all went to providing kids with scholarships for college, I was so excited.
5. Store Sales, like Target
This isn’t my favorite one, but it did get me books for very little money. In the dollar area when you first walk in Target there are sometimes teacher stuff. One time I found some books in there that were a dollar each. I wouldn’t say it was great literature, but they were chapter books that my kids may enjoy reading. Additionally, I have a Target card, so I got an additional 5% off my entire purchase, which is nice 🙂
I’m still working on adding books to my classroom library, but this definitely helped me find way more books than I ever thought I would for the amount that I have paid so far. What are some ways that you stocked your classroom library on a budget? Share your tips in the comments 🙂