When Times Are Tough, Part I

I wanted to open this entry with a comment left by one of the Anonymous posters that opens up a very interesting debate:

"So alot of what you talk about is kind of from the stance of having a decent career type job. Do you have advice for those coming out of college who just land the $8-15/hour jobs? or is your advice get a real job that makes your degree worth it.... a lot of my friends have degrees and still end up getting these kinda of jobs and so they are stuck tryin to make it in NYC on this salary while paying back [loans], etc etc and it's driving them into debt(and bad credit)..."

Anonymous brings up a very good point. Sometimes its difficult to find work in certain industries that pay for your degree. This can hurt especially if you have loans. Because your degree may not be in high demand it can be discouraging to find employment. Or perhaps you may not have the desire to work for the large companies who are willing to pay more. How can we tie all this together?

Well, the first thing I would say is that when it comes to living on a modest income in NYC, its especially important to watch every penny until you can find higher ground. The road will be tough, but it won't be impossible. I will use a middle-of-road example to try and determine how we can work through this. If some of you who peruse the site would like to contact me directly, you can reach me by e-mail.

Let start with a "sample profile." Take John Q. Worker, who has graduated with a degree in graphic design and is currently making $12 an hour, and he works 40 hours a week and does not currently work any overtime.This equates to roughly $875 after taxes every two weeks. So how can we work this and loans?

First, you should be very aware of where your dollars are going. All of them. John would probably start by listing in writing the basic outgoing expenses on paper, Microsoft Excel, whatever makes you comfortable. Let's take a look at John's "sample" expenses for one month:


Monthly Expenses (Outgo)
Rent: $750
Electric Bill: $50
Gas Bill: $54
MetroCard: $76
Food/Grocery Bill: $250
Hair/Clothes: $200
Student Loan: $100
Credit Card: $50
Entertainment: $50
Cable/Internet: $100
Cell Phone: $50
Total Expenses: $1680



Next, its time to determine all sources of income:
Monthly Money Earned (Income)
Salary: $1750

Then we find the difference: $1750 - $1680 = $70, a slim margin to work with here, but its above zero. If it was below zero, we would then have a problem, because he would be trending negative each month. If he doesn't mind his expenses, he could easily fall into the red very quickly. That's why monitoring and a written spending plan is very important . Many people feel that budgeting is for those who don't know better, or they can keep it in their heads or check their banking account online "to make sure everything is all right. But until YOU do it, it will be very difficult. Why? Because knowing how your money is being spent establishes control. Millionaires keep a written budget, and they're "rich". Why shouldn't the rest of us?

Part II: Next Week.