How to save money after college

Any tips for living cheaply out of school? FYI, I already cook a lot, bake, and obviously brew. I figure HBtalk people are some real DIY-types, so any suggestions are welcome. I'm down for anything--just started making my own cheese, for example.

One caveat--I don't eat processed foods (they're not even cheaper than stuff from scratch, anyways).

The problem is that I am not used to living on a budget. I worked throughout school but that was for spending money, parents paid rent and groceries.

Do a budget at the beginning of the month and stick to it. You work too hard to not know where your money is going. My wife and I took Dave Ramsey's Financial Peace University at our church and it was life changing. Since going through it we do budgets every month and find that our money goes a lit farther because we are being intentional with it. That and getting out of debt have been the keys.

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One place to start is to actually track your money... all of it. Like mistercameron said, "know where your money is going"

Next, I suggest that you get direct deposit from your job and then pay yourself an allowance, and leave the debit and credit cards at home. Just withdraw your allowance each week or each payday. It's your choice how to spend your allowance, or you can save it up for a bigger purchase. You'll find it easy to turn down stupid purchases ($5 coffees and such) if you have to watch the wad of cash in your wallet get smaller each time.

Buy nothing on credit.
Wait until you can fully pay for something before you buy it.
If you do that, then you will have more money in the long run and it will be easier to not buy on credit in the future.

Cook as much as you can.

Don't buy a new car yet.

Live in a place with cheap rent.

You don't need cable.


I set our budget every month, which helps. But the best way to save money is the above. Right now, since I am looking for work, my wife and I make far less than most of our friends. But we still seem to have about the same amount of money. Because we don't have two new cars, a 3,000 sq ft house for two people, and we cook a lot.

From a philosophy perspective, remember that the world doesn't owe you anything and you don't deserve that material thing that is going to sit on the credit card. I think the worst trap people get into is swiping the card when they know there's no way to pay it off in 20 days. Someone will probably throw a Wii controller through the flat screen before it's even paid off ;-)

From a practical perspective, I have no idea really. Split rent with room mates for as long as you can stand it. Drive crappy cars for as long as you can stand.

I was at the bank the other day filling out the paperwork to transfer my regular Visa cards to a rewards card. A couple patrons overheard the conversation and asked about it. See, the perk is that you get 1% cash back but the downside is that the interest rate is 3 points higher. I was floored when 4 adults working at a technology company scoffed at the idea of trading 3 points of interest for 1 point of cash back. They tried telling me I was bad at math when they were just bad with money. You pay it off every month and the interest doesn't come into play.

Bobby_M said:

You pay it off every month and the interest doesn't come into play.

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Most people can't handle this because they don't understand it.... most people are overwhelmed with high interest consumer debt!

I get 1-3% back on all purchases without ever paying a dime in fees or interest. Over the last few years, I've gotten about $1500 deducted from my statements. $1500!!!

I get confused when I explain this to really smart people and then later I still see them using cash and/or debit cards. I guess some people just don't like money.

I'm a credit card 'freeloader' too--don't pay an annual fee, never carry a balance. I got an Amazon card not too long ago, and their rewards are great. That being said, it doesn't sound like the OP can afford to buy enough stuff to get significant rewards.

And yeah, people don't seem to understand interest, and how to calculate it yearly.

McGarnigle said:

I'm a credit card 'freeloader' too--don't pay an annual fee, never carry a balance. I got an Amazon card not too long ago, and their rewards are great. That being said, it doesn't sound like the OP can afford to buy enough stuff to get significant rewards.

And yeah, people don't seem to understand interest, and how to calculate it yearly.

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Actually, I buy a fair amount of stuff on Amazon for baking and cooking, but I see it as an investment. Just got a bunch of stuff for pizza making, which is one of the cheapest foods you can make, and is delicious.

The credit card seems like a good thing to check into, thanks.

rexbanner said:

The credit card seems like a good thing to check into, thanks.

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As everyone else has said though, make sure you pay it off, once you get money put on it, it is really hard to get it paid off. I got a credit card about 4 years ago now when I was a student, shortly after I was out of work for 2 months and needed to pay rent. Card was maxed out and basically has been since. I am working really hard to try to pay it off but once you get in the mind set that its your money(when its not since its a loan) its hard to justify not having it full.

Good luck and don't dig yourself in a hole that you can't get back out of.

Yeah, I also like to take advantage of the cash back cards. I have gotten a LOT of money back for free essentially just by buying stuff on the cards and paying at the end of the month.

But it is important to stress that the minute you start building ANY monthly debt on those cards, you have just kissed away all your free money.

It is also important to stress that some of the cards now have changed their grace period (and some don't even HAVE a grace period) so that this isn't as easy to do anymore. Read the terms very carefully if you are thinking about doing this.



Insofar as leaving cheaply, what you really are aiming to do is live below your means. Getting a roomate or two or three and sharing living expenses is one of the easiest ways to do this when you are first starting out. If you are in DC and both your home and work are metro accessible, USE IT. It will save you the headache of dealing with traffic, and it's cheaper than paying for gas unless your commute is very short.

If you bake a lot, I would recommend getting a Costco or Sam's Club membership, and then buying bulk yeast and flour from them. I get 25# bags of flour for $7 and 2# blocks of yeast for somewhere around that price, maybe $8-$10?...I dunno it has been a looong time since I bought yeast because it lasts forever. Anyway, it is a much better deal than buying those individual packets of yeast by an order of magnitude at least, and also better than buying smaller bags of flour. I stick the yeast in tupperware containers in the fridge/freezer, and the flour goes into a couple of airtight containers in the pantry.

The trick with the Costco/Sam's Club membership is that the actual cost of the membership fee can negate the savings you get buying a few things in bulk. Sometimes they will have deals for free membership for a year, etc. which you can take advantage of, and sometimes they will give you a membership if you get e.g. a credit card with cash back rewards. That is the route I go for mine. We end up with the membership and because we buy all our gas there (3% cash back on all gas purchases) and buy almost everything we can on that card, we end up getting way more cash back than the membership fee.

Make your own lunch and coffee. You can make some pretty cheap lunch with some cooking ahead of time. Beans and Rice, soups, stews and casseroles can be made and last all week.

Get a second job, even if you can make ends meet with your current job. You have the spare time to work extra at this point in your life, before you get married and have kids. Pay off your student loans and start socking away money. Having no debt is a huge!

Invest in yourself: develop your skills, educate yourself (learning about investing, learn a language, read, etc) and be resourceful on how you spend your time.

Don't smoke, limit drinking and drugs....at the end of the day its basically throwing money out the window.

Spare time = spent money.

You might also be shopping around for a mate at this point in your life. Beware of the ones with the bad shopping habits and who lack financial sense. They'll suck all your money away if you decide to spend the rest of your life with them. Maybe you can afford it, but what other opportunities do you miss out upon ?

Just some things off the top of my head...hope they help!

I'm a vendor who accepts credit cards (and pays the fees associated with them) so I'll give you my spin on it.

Every one of those "affinity" cards that gives you cash back, perks, awards, air miles, etc. charges a higher % to the retailer for the "slice" of the transaction that goes to the credit card company.

It used to be that if you did electronic Point-of-sale swipes through a machine, the merchant fee would run 1 to 1.5%. Nowadays I'm seeing my average fee running close to 3%, and some of those Corporate Cards are charging over 4%.

After seeing the numbers and talking with my accountant last year (along with more than a few conversations with the Visa/Mastercard Merchant Services group) I've raised my prices in order to cover the extra fees and lower realized revenue that I was seeing. It was either that, or stop accepting affinity cards (which be a violation of the Merchant Services agreement I'd signed.)

So next time you think you're saving money using a card, as the owner or manager if they give a 3% discount for cash. I bet they do.

There was a comment about how the benefit of rewards can be negated by carrying a balance just once. Some banks now offer rewards debit cards, so you don't have to worry about even paying a card every month. If you are indeed living within your means, this shouldn't be a problem.

One other piece of advice - build up a small emergency fund of $1000 and don't touch it unless it's an emergency and you can't otherwise pay for it in your monthly budget (what's in your checking account). Car breaks down and you can't get to work? Emergency. You "need" a bigger TV? Not an emergency. The point is that by having a buffer, you prevent yourself from having to go into debt for the unexpected problems in life... The credit card company will kick you while you're down until you pay that debt off. Long-term it would be better to have a couple months of expenses saved up for bigger emergencies, like some health-related problems, losing your job, etc. And, this doesn't mean you can't save for other things ... just be prepared for the crap that can happen at any time.

XXguy said:

So next time you think you're saving money using a card, as the owner or manager if they give a 3% discount for cash. I bet they do.

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That is so common in other countries that I've been to, but I rarely see it here in the U.S.

XXguy said:

I'm a vendor who accepts credit cards (and pays the fees associated with them) so I'll give you my spin on it.
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So next time you think you're saving money using a card, as the owner or manager if they give a 3% discount for cash. I bet they do.

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And, what usually happens in B&M in my experience is that the vendor inflates their entire price list by 3-5%, and if you pay in cash they will happily pocket the extra money without mentioning a discount. And if it is any kind of chain with multiple levels of management, forget about it. They don't let the store grunts offer discounts like that. So, maybe you can get that discount if you ask for a manager, and the manager calls the head office and those guys say, "yeah ok". But I'd rather just use the card and move on with my life.

The simple approach is to live below your means. That sounds obvious, but I know lots of people who are upside down in their mortgages and who have big car payments. It's not easy, but it's possible and I think the world would be better off if everyone lived within their means.

I live WAY below my means. I buy all of my clothes (except underwear!) at thrift stores. I don't have any kind of what my daughter calls "bags" that I call a purse. I mean, I have a $10 purse that is falling apart but I don't see the need for 10 different expensive ones that are "cute". I don't have any expensive electronics, dish TV, etc. I don't ever go out to eat. We eat better at home anyway!

I paid cash (by saving frugally) for my last two vehicles. Not fancy trucks and cars at all, just a Chevy Z-71 in 2004 and a Hyundai Elantra in 2009.

I don't have a mortgage, or credit card bills. If I can't afford something, I don't buy it.

The best way to start is to really think about what your needs are, vs your wants. We all need food, clothing, and shelter. No one "needs" an iphone or a big screen TV. For things that are important to you (cooking, brewing, sewing, whatever), make sure you enjoy the hobby enough to justify the expenses. But still, stick to a budget with an eye for the future. If you can save $10 a week now, it will really add up over the long term and you won't even miss it if you put it away every week. $10 a week is what? Two gourmet coffees a week? Two meals at McDonald's? Most people spend a few dollars here and there (the Latte' Factor) and seem to always be broke. Don't fall into that trap!

The best thing that I have ever done is take all of my credit cards (ALL OF THEM) and feed them one at a time through the shredder.

There's something to be said for paying cash for everything. I mean literally handing over the paper money. For people who have trouble associating the consequences of swiping a card and signing, paying with cash drives it home that the money is now gone.

I carried a balance past the interest cycle one month in my entire life (just after I bought a house) and it pissed me off to the point where I never did it again. I think that moment is a turning point for everyone. If you make a payment less than "in full" and get charged the interest and it DOESN'T piss you off, I think it's going to be a long road ahead.

On the other hand, I don't think credit cards are evil. I use them for the rewards (not my problem that the merchants pay more, if they do) as well as an easier way to track my spending. Visa will fight for you if the vendor you bought from screws you. They also provide gap insurance on car rentals. I don't like carrying a bunch of cash around.

Skip the company cafeteria (unless heavily subsidized) and eating lunch out with coworkers. I limited both of these to once a week (you don't want to be antisocial). You can always eat out more if it is a emergency or you are running late. I used to watch my employees blow $75-100 a week in the company dining hall.

Someone mentioned getting a second job --- Find something you enjoy for example see about getting a job at a LHBS a couple evenings a week (you might get a discount as well). I enjoy restoring old stuff, so I am always working on some project or another that I will end up selling for a decent profit I have done everything from crank phones, wooden canoes, gas pumps, to Cushman Motor Scooters. I enjoy it, and I can generally make a fast buck.

Buy good stuff once. You mentioned cooking and baking, I am constantly amazed and the money people blow on that stuff. Save up and buy quality knives, commercial grade baking pans, pots, pans etc. They don't cost all that much more, and they are designed to be used several times a day everyday, in the home they last forever.

Working 2 hours a day at a Pizza delivery (or any delivery service) in the afternoon can earn you an extra $200-$400 a week. They are always hiring part time help and can get you out of a financial bind if in need.

What concerns me about this whole thing is that you went to college, assuming you earned a degree you should be making plenty of money to support yourself. That is the point of going to college, right?

mredge73 said:

What concerns me about this whole thing is that you went to college, assuming you earned a degree you should be making plenty of money to support yourself. That is the point of going to college, right?

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PLEASE TELL ME YOU ARE RUNNING FOR PRESIDENT! cause THIS is the first time I've heard anyone other than myself with this exact concern!

shafferpilot said:

PLEASE TELL ME YOU ARE RUNNING FOR PRESIDENT! cause THIS is the first time I've heard anyone other than myself with this exact concern!

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Very few people graduate from college and then instantly make tons of money. You still end up with fairly low starting salary because you usually have got little to no experience working in whatever job you get after graduating.

Going to college puts you on a PATH to make more money over the rest of your life. There are many job opportunities that they either do not hire non-college-educated people for (e.g. most engineering positions I am aware of) or for which you are competing against people with similar resumes, except they have a college degree and you don't, and guess who gets those jobs more often?


This is not to say it is impossible to have a fulfilling career that earns lots of dough without going to college. It is certainly possible. For example, there are many trade professions that do quite well. But, there is a whole world of opportunities that are basically out of reach without a college degree.

weirdboy said:

Very few people graduate from college and then instantly make tons of money. You still end up with fairly low starting salary because you usually have got little to no experience working in whatever job you get after graduating.

Going to college puts you on a PATH to make more money over the rest of your life. There are many job opportunities that they either do not hire non-college-educated people for (e.g. most engineering positions I am aware of) or for which you are competing against people with similar resumes, except they have a college degree and you don't, and guess who gets those jobs more often?


This is not to say it is impossible to have a fulfilling career that earns lots of dough without going to college. It is certainly possible. For example, there are many trade professions that do quite well. But, there is a whole world of opportunities that are basically out of reach without a college degree.

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Almost everyone I know who graduated college in the last 4 years are working as bartenders and retail pions.... their degrees are currently only costing them money

Well my company has hired people in the last 4 years and they were all college grads.

Sadly there a RCGs that think they should be CEO by the end of the year. They have the attitude that they want to learn something and then move on to the next thing and never do the first again. I think this stems from the elimination of dodgeball in schools, telling the kids they are special, not keeping score and giving everyone trophies. Hopefully the ship will self correct soon though. I just hired 2 RCGs and they said they are the only ones they know if their friends that have real jobs.

Back to the topic at hand. If you are already cooking, consider investing in a slow cooker (crock pot) and a vacuum sealer. You can make and save things like pasta sauce, chili, soups and the like to have throughout the year. I got a silicon mini loaf tray that I freeze ingots of food in and then vacuum pack. This way you don't get burned out on things and if you have no fresh food in the house you can avoid eating out by pulling something out of the freezer.

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XXguy said:

So next time you think you're saving money using a card, as the owner or manager if they give a 3% discount for cash. I bet they do.

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You might as well ask them if they have a 10% or 15% discount coupon that they could swipe for you while you are at it! Some places have coupons just sitting next to the cash register and all you have to do is mention "coupon" and they will swipe it for you.

shafferpilot said:

Almost everyone I know who graduated college in the last 4 years are working as bartenders and retail pions.... their degrees are currently only costing them money

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Sounds about right in my experience as well. Those who decided to go onto grad school are still working at the mall with masters degrees. Guess I lucked out being a slacker?

LVBen said:

That is so common in other countries that I've been to, but I rarely see it here in the U.S.

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Specs, a liquor chain in the southern part of Texas offers it up front. It's pretty cool. I'm happy to give up 1% for 3% saved.

Figuring out a budget and tracking your expenses is really important when you're first getting used to paying your bills. Start out spending as little as possible. Start out saving, even small amount, in a 401k or IRA. You might not think you have the cash for it but if you put away 1% of your salary, could you really not live without it? Right now is the best time to put money aside because it comes with the biggest return through compounding available to you going forward. (The older you get, the less time for compounding.)

Keep cooking your own food. Bring your lunch to work. Make your own coffee. Invest in reusable containers like coffee cups (the big ones with lids), tupperware that won't melt in the microwave, etc. You would be surprised how even the occasional visit to a coffee shop or restaurant will soak up cash. Similarly, limit how much you go out to drink. Obviously as a homebrewer you know the difference of costs between your beer and what you pay at a bar. Your freezer will be your best friend to save food.

Resist marketing. You don't have to have all the newest electronics. You don't need a new car. You don't need the ipad, a new cell phone every six months, etc.

Don't feel like just because you're a graduate you're too good to have a roommate. It's a huge cost saver (typically).

As your salary grows (hopefully) then you can add all luxuries back in.

ReverseApacheMaster said:

Resist marketing. You don't have to have all the newest electronics. You don't need a new car. You don't need the ipad, a new cell phone every six months, etc.

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Agreed! I don't understand the "have to have it right now no matter what it costs" attitude!!!

I know several people that have a hard time paying their utility bills on time, but they'll go and buy the latest video game for $60. Wait 6-12 months and you can probably get it for $10. In the mean time, there are plenty of 1-2 year old video games that are still really cool video games.

Having the latest, greatest, most expensive stuff doesn't make you cool. You're still a [insert noun here]. The only difference is that now you are a [insert same noun here] with cool stuff.

Also, conserving energy isn't just good for the world. It is also good for your wallet. You can save quite a bit of money in the summer just by setting your thermostat to a couple of degrees higher than you'd prefer with only a minor difference in comfort levels. If you have a programmable thermostat, turn off the A/C or heat when you are at work, and schedule it to come back on about a half hour before you get home.

OMG don't get me started on video games. If you play games on the PC then get Steam, and wait until they have a sale. They have two big sales; one over Christmas/New Years, and one around the beginning of July. You can get some AMAZING deals during those sales where they mark stuff down 80-90%. I mean we are talking AAA, award winning, game of the year type of stuff for like $5.

It is the only time I ever buy stuff on Steam.

weirdboy said:

OMG don't get me started on video games. If you play games on the PC then get Steam, and wait until they have a sale. They have two big sales; one over Christmas/New Years, and one around the beginning of July. You can get some AMAZING deals during those sales where they mark stuff down 80-90%. I mean we are talking AAA, award winning, game of the year type of stuff for like $5.

It is the only time I ever buy stuff on Steam.

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There are a few games I really want to play (next Modern Warfare, Deus Ex, the Old Republic) but once I start a full time job, I think it might be just better to steer clear, although I probably won't. There's so much to do in the real world, and not enough time as it is. I cut back on games a lot over the last two years, and the results have been very positive.

I don't know if anyone has said this yet, but let me add my big thing: save. I invest as much as I can into my pension and 457 (401k equivalent). I definitely have not made the best decisions with the money I've spent over the years, but I have tons of money saved and its constantly growing, even now (just less... lol). The younger you start, the more you will have for your retirement years.

Airborneguy said:

I don't know if anyone has said this yet, but let me add my big thing: save. I invest as much as I can into my pension and 457 (401k equivalent). I definitely have not made the best decisions with the money I've spent over the years, but I have tons of money saved and its constantly growing, even now (just less... lol). The younger you start, the more you will have for your retirement years.

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I know what you mean, but I'd rather invest in a business than save. My family has a house in Guatemala, so I can retire there for next to nothing if I want. Not worried about retirement. I'd like to start a business. I don't need to save that much money, mostly just need to scrape by for the next couple years while I research and write a business plan. Have some friends/family who'd be down to invest. I just picked a really low-paying major, political science. Whoops.

I know what you mean, but I'd rather invest in a business than save.

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You could do both...

rexbanner said:

I know what you mean, but I'd rather invest in a business than save. My family has a house in Guatemala, so I can retire there for next to nothing if I want. Not worried about retirement. I'd like to start a business. I don't need to save that much money, mostly just need to scrape by for the next couple years while I research and write a business plan. Have some friends/family who'd be down to invest. I just picked a really low-paying major, political science. Whoops.

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weirdboy said:

You could do both...

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+1 to weirdboy's comment...multiple income streams don't hurt, regardless of your what stage of your life you are at.

Lots and lots of people write business plans while working full time, have families, etc. etc. For where you are in your life, if all you are doing is researching/writing a business plan then you are seriously under-utilizing your time. Especially when you really need to developing your skills/experience to be successful later in life.

Do you have experience in the field that you are going to start your business in? If not, that is where I'd be focusing my efforts...for multiple reasons.

You aren't going to have any less commitments than you do right now.

rexbanner said:

I just picked a really low-paying major, political science. Whoops.

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Undergrad majors don't matter much. Maybe at the very start, but for so many jobs out there, no one cares.