Change: $77 or 0.21 %

Ok, let’s face it. October was pretty plain-vanilla as far as money goes. I made a little more than I spent, and I saved it. I started a new job, but I haven’t received any  paychecks for that yet, so it won’t show up until I do November’s net worth update. So, November might be a big jump up. But December will be another slide down as I take out my last batch of student loans.

So, sorry so boring! You’ll just have to look forward to November with me.

For a look at my assets and liabilities, check out my NetworthIQ for October. For an explanation of the categories I use, check out the bottom of my entry about February’s net worth balance.

That seems kinda silly, doesn’t it? Releasing the best tip right off the bat! Shouldn’t I save the good stuff for later, to keep you reading? Ha! Come on guys, I’m not that crafty. I’m way more concerned about you guys getting a running start, right now. So here we go.

Track What You Spend.

That’s it. That’s the secret. It’s hugely simple, and hugely effective. And everything else builds on top of it. Maybe it’s that old "knowledge is power" thing. Actually, it’s probably more like this:

For anything else to work, you need to know where the %@$# your money is going.

Too lazy? Bah! No one in the world is lazier than me, except maybe LazyMan, and even he seems to use Wesabe to track his spending. Which brings me to my next point - there are a ton of tools to make this task easier:

Old fashioned, dirt cheap: Small memo pad from the dollar store, and a pencil. Keep these two things in your purse or pocket, and every time you spend money, write down what you bought, where you bought it (maybe), and how much it cost.

*Bonus tip* I highly suggest that if you don’t use pencil and paper (I don’t), you at least keep a piece of paper in your wallet for tracking cash purchases that you don’t get a reciept for. If you’re anything like me, cash is incredibly hard to keep track of, even when you didn’t mean to be carrying much in the first place!

Free, more high tech: An Excel spreadsheet on your computer. This is what I use, so that I can track how much I make right alongside it. You don’t have to know how to use the math functions in Excel to do this - you can just use the little boxes (cells) as handy columns for the what, where, and how much.

Other computer programs work as well. Notepad, Word, whatever the Mac equivalent of Notepad is… you could even use a Paint program if it gets you to do it. I don’t care, just as long as it’s easy for you to read.

Also free, even more high tech: There are a lot of online sites that will pull the information from your bank accounts and credit cards, and analyze your spending for you. This is good if A) you trust the site and B) you rely on plastic forms of payment much more than cash.

Some examples of this: Wesabe, Mint, and Yodlee. Actually, most of these type of sites use the Yodlee system to do this - Bank of America’s "My Portfolio" feature is just Yodlee dressed up in Bank-of-America-red. To use Yodlee directly, click "Yodlee MoneyCenter login" on the upper right of their page.

I can vouch for the three sites listed above, because I’m a user. Your information will be safe thanks to their privacy policies. However, these tools aren’t completely perfect - you will have to keep an eye on them. Since they automatically sort and categorize your purchases, you might run into some weird blips. Like once, I had a textbook purchase show up in the "Health and Beauty" category. But most of these services are smart enough to "learn" after you correct them once.

The Power of Tracking

Not sold on tracking your spending? How about a story.

There was once a girl so broke and bad with money, she had to drop out of college and face the real world. But, when she dropped out of college, she also started tracking her spending. Over just nine months, she was able to go back to school. One year after that, her credit card was paid off, while she was still in school. Two months after that, she had $1600 in savings.

If you’ve read any other part of this blog, you’ll know that girl is me. It all started with tracking my spending. It’s the crux of all I was able to do.

You won’t have to do it forever. And you can automate it, now or later, using online tools. But you simply have to have some way to tell if you’re making progress. This is where it all begins.

We’ll get into how to use this information later. The important part is that you start immediately, if you aren’t already doing this. Start with the next thing you buy, or the next bill you pay. It won’t kill you.

• We think we don’t have any
• We don’t know where to start
• We don’t think it’s important
• We think it’s too hard
• We’re kinda lazy - I mean, it will work itself out, right?

Sounds like the exact same reasons we put off doing assignments for class. And we all know how well procrastination pay off there, don’t we? It’s the same for money - put it off, and it’ll bite you right in the ass.

The only one of those that might actually be an excuse is "I don’t have any money." But for most college students, I don’t believe that for a second. In 2004, 78% of undergraduates worked while they were enrolled, according to a brief by the American Council on Education [PDF]. Thanks to current economic uncertainty, I’m willing to bet that percentage is higher right now.

So, at least 78% of us have a job of some sort - which means there’s money coming in, even if it goes right back out again. But thanks to that aforementioned economic uncertainty, we have to shape up. No one else is going to take the reins of your financial future - you have to do it yourself.

How to Become Financially Savvy While Carrying a Full Class Load

Ok, I’m done pressing the doom and gloom. If you’ve made it this far, you’re ready to ask me, "How, Stephanie, do I take the reins of my financial future or whatever?"

To answer that, I bring you a new weekly series on PTY. Every Friday, a quick tip you can use to bring yourself closer to financial freedom. Carrying out these tricks shouldn’t take you more than 15 minutes a week, but it will have a profound impact on the rest of your financial life.

Is that too lofty a promise? I don’t think so. But you can’t prove me wrong if you don’t read the series! See you tomorrow.

Are you older, wiser, or already financially savvy? Share your tips and financial hacks in the comments. Show us whippersnappers how it’s done!

Here’s what my Savings Snowball looked like when I made it in August:

Priority	Name	Goal Total	Monthly Minimum
1	Textbooks	$400	All extra $$
2	Student Loan Interest	$1,500	$50
3	Getting Established	$2,000	$50
4	Emergency Fund	$10,000	$10
5	Future Car Fund	$10,000	$10
6	Retirement	Infinite	$5

Two months later, here’s what things look like:

Name	Goal Total	Progress	Monthly Minimum
Textbooks	$400	$495	Done!
Student Loan Interest	$1,500	$584	All extra $$
Getting Established	$2,000	$100	$50
Emergency Fund	$10,000	$382	$10
Future Car Fund	$10,000	$25	$10
Retirement	Infinite	$26	$5

Some things you might notice:

Textbooks: I put more aside than I originally planned. As I was saving, I was also buying the textbooks for my first term of the year, and the bill was higher than I expected. So I put some extra cushion room into this account.

Student Loan Interest: This is now the main focus of the snowball. I’ll tell you, I never would have thought I’d make this much progress in only two months! I’ve been acting like a squirrel, hiding nuts for the winter. Soon my income will dry up a bit (it always does in November/December), and I’ll be glad I got a head start on my savings before then!

Getting Established Fund: I wish there was more here, but that’s the nature of the savings snowball - this doesn’t get focus until my student loan interest is taken care of. Still, things are on the right track, so I’m not too concerned.

Emergency Fund: If this number looks high, it’s because I already had it started before the savings snowball. Also, it’s fed by sources other than just the snowball!

Future Car Fund and Retirement: Chugging along! Once the student loan interest is done, I plan to increase the minimums for these. Maybe. It depends on how things are going at that point.

Flexibility

My savings snowball might not be perfect, but it doesn’t have to be. If at some point I decide, for example, that I wish I had put more toward Getting Established than other goals, I can yank money out of the other savings accounts and move things around. Nothing about this is set in stone.

Some people think I should put more toward retirement sooner. Or that my emergency fund goal is too high. Or that I shouldn’t work on anything except my emergency fund. But it’s working for me, for now, and I can move any of the money at any time, as long as it’s all just sitting in different savings accounts.

Which is the beauty of the savings snowball.

What do you think? Do my goals need adjusting? Are you ready to start a savings snowball of your own?

But I already know how rich I am, because of the quality of the education I’ve received. I’m not even talking about the fancy college education that I’ve gotten into way too much debt for - although that certainly could be used as an indicator.

Rather, I can tell my relative wealth simply by looking at my elementary and high schools. Textbooks, teachers, computers, music classes, science classes, drama club… all courtesy of the New York State public school system.

Most of the nearly two–billion children in the developing world are inadequately educated, or receive no education at all. One in three does not complete the fifth grade.

-One Laptop Per Child, www.laptop.org

Is poverty a cause of poor education, or is poor education a cause of poverty? As best I can tell, the answer is: Yes. Both. It’s a vicious cycle. Poor schooling means little economic opportunity, and struggling economies can’t afford to build schools.

Many of you already know that I lead a group on my college campus called Students for Cambodian Schools. I haven’t been able to donate much money to the cause, thanks to my debt and all that. But debt - being "poor" in America - is no excuse for ignoring the real plight of others. Just because I can’t give money doesn’t mean I don’t have something to give.

Time.

Call this what you want: bleeding heart liberalism, white guilt, "#62 Knowing what’s best for poor people" … it is what it is. I implore you today, on Blog Action Day, to take a look at people that truly are Poorer Than You. And think what one hour of your time or one bill out of your wallet might mean to someone living in poverty.

The floodgate - I mean, the comments section - is open.

More than one year later, the question is: was I right?

The Costs of Commuting

Even though I saved money on rent by living with my parents, I incurred the extra cost of commuting 16 miles to campus. This includes the cost of gas, the nearly $800 in repairs that my car needed during the school year, insurance, and little things like oil changes, inspections, and new windshield wipers. I did manage to keep the cost somewhat low by crashing on friends’ couches now and then.

Car costs and miscellaneous from living at home: $2,177 for the 2007-2008 school year.

The Costs of Living On Campus

If I’d lived on campus, I would have probably lived in same apartment there that I’d been living in, in 2006. The rent for that apartment was $3,060 for the 2007-2008 school year.

So already, rent vs. cost of commuting, I’ve saved money. But it keeps going.

Food! I guesstimated groceries at $120 per month, based on what I was spending when I lived in the apartment before. That’s another $960 for the school year.

And, even if I’d lived on campus, I still would have had my car. I have no way of knowing whether or not my car would have still needed all those repairs if I’d lived on campus, so I included them as a cost as well. I assumed about $25 a month in gas - I didn’t drive much when I was living on campus, but I did go to the grocery store and such. Car costs add $1,692 to the cost for the year.

Total costs for living in an on-campus apartment: $5,712 for the 2007-2008 school year.

Total Savings

$3,535

Case closed - I was right in the first place. Commuting saved me a boatload. In fact, the saving are even better than that: that extra $3,535 would have come from student loans, so I would have had to pay interest on that, as well.

One final note: although commuting can save a lot of money, I don’t necessarily recommend it for incoming freshman. Living on campus, on your own, is an experience that you can’t really put a price on, even with all this math. I moved back home because I absolutely had to.

If you can’t afford to live on campus, I would recommend picking a cheaper school before I would recommend moving home. That, unfortunately, was not an option for me.

I hope the questions weren’t too hard! There were nearly 200 correct entries, so I think it was a nice balance of hard-but-not-too-hard. Also, I gave you second chance and third chances if you needed them.

So, who won?!?

Heather Brown is the lucky winner of the HP dv4t prize pack! She’ll be receiving all of the following:

• HP Pavilion dv4t series notebook
• HP xb4 Media Docking Station
• HP 500GB Pocket Media Drive
• HP Photosmart C6380 All-in-One
• HP Protect Messenger Bag

And the following four runners-up will each get an HP Protect Messenger Bag (which is a pretty sweet bag, if I do say so myself):

Alain Lai
Rebeca Chirinos
Karim Turay
and Scott Campbell

I’ve emailed all of the winners, so if you see your name above, check your inbox!

What if you didn’t win? Well, if I don’t hear back from one or more of the winners, I will pick new names, so keep a keen eye on your inbox. Also, keep an eye on this site - this isn’t the first giveaway I’ve done, so I highly doubt it will be the last. Subscribe via RSS or email to get financial tips, stories, and future giveaway announcements delivered right to you!

Many thanks to everyone who entered, this was a blast! And don’t forget, there are 14 other sites giving away similar prize packs! Here’s the list:

• Sep 26 - Oct 3: Poorer Than You
• Sep 28 - Oct 5: Broke-Ass Student
• Sep 30 - Oct 7: Broke Grad Student
• Oct 2 - Oct 9: Study Hacks
• Oct 4 - Oct 11: Cooking for Engineers
• Oct 6 - Oct 13: College Being
• Oct 8 - Oct 15: Paul Stamatiou
• Oct 10 - Oct 17: DormDelicious
• Oct 12 - Oct 19: Student Bloggers
• Oct 14 - Oct 21: Jessica Mah Meets World
• Oct 16 - Oct 23: UNEASYsilence
• Oct 18 - Oct 25: Gomeler.com
• Oct 20 - Oct 27: CampusGrotto
• Oct 22 - Oct 29: Hack College
• Oct 24 - Oct 31: The University Blog

Change: -$2,735 or -8.08 %

Oh, the agony! My net worth chart is starting to look a lot like the stock market. Alas, not much to do about it but keep plugging away at savings. Speaking of savings, how’d that go in September?

Cash accounts: $680 increase
This category includes all of my various savings accounts for my savings snowball. Goal #1, my textbook fund, is completely full and done. Now I’m working on Goal #2, my student loan interest. Next week I’ll go into more detail on how the snowball is rolling.

All in all, I’m pretty happy with September - as long as I ignore the huge debt increase. Such is life, and it will happen again in December, for the last time. That’s right - a degree is within my grasp, and the student loans will finally stop piling up. Huzzah?

For a look at my assets and liabilities, check out my NetworthIQ for September. For an explanation of the categories I use, check out the bottom of my entry about February’s net worth balance.

Too bad! I’ll do what I want for my birthday, and what I want to do is give you the chance to win a sweet laptop prize pack from HP. I’m really pumped to be the first blog in the HP Freshman 15 giveaway, so let’s get this party started, shall we?

How to Enter

It’s an Easter Birthday Egg Hunt! The answers to the following 10 questions can all be found on this blog:

• Since it’s my birthday, how old am I?
• What did I do for Earth Day this year? (Not on what I did here on the blog, but out in the "real world")
• What is the Compact?
• How many college seniors have four or more credit cards?
• What’s one reason you should over-pay your taxes right after graduating college?
• List Rule Zero and the Steps of the Quick Start Financial Guide.
• Name a government application that I hate.
• Name a show from my childhood that I miss.
• What should you do with extra financial aid money?
• What "percent of a guy" is checking in on bottled water’s cleanliness?

Find the answers to these questions, and submit them using the contact form. If you get all the right answers, you’re entered to win! I’ll use randomizer.org to pick the winning entry, and announce the winner on October 3rd.

Rules and Stuff

• Don’t post the answers anywhere online! Remember, the more correct entries, the lower your odds of winning, so giving other people the answers can only hurt you.
• Send in your entry by 11:59PM, EST October 1st. This will give me time to sort through all the entries, so I can pick the winner before the announcement date.
• You do not have to be a US resident to enter!
• One (correct) entry per person.
• If any of your answers are wrong, I’ll reply to your email telling you how many you got wrong, but not which ones. Kinda like that game Mastermind, which I love!
• The correct answers are the one’s that come from this blog. Although I’m sure many of them can be found on other websites, the only answers that are correct for the purposes of this giveaway are the ones that come from PoorerThanYou.com.
• Use a valid email address that you check often when entering, so that I can contact you if you win!

That’s it! Find the answers, send them in, and then check back on October 3rd to see if you’re a winner! You might want to subscribe via RSS or subscribe via email to help you remember. And most importantly, don’t forget to check the other 14 blogs giveaway away these prize packs! The next giveaway starts on September 28th at Broke-Ass Student!

How can a poor college student, that doesn’t have $1000 on hand, start investing?

- A PTY reader

Your boat is my boat, my friend! It’s hard to scrape together enough money to put gas in my car - how can I save up enough to start investing and take advantage of sweet, sweet compound interest?

Should I Invest?

First things first, you’ve got to figure out if investing is a good idea for you right now. When we say "investing," we mean "buying stocks and holding onto them over a long period of time." With this in mind, ask yourself three questions before you start looking for ways to invest:

What’s my goal?
Since investing is so long term, you should really save it for goals that are 10+ years off. If your goal is shorter-term than that (say, a new car in five years or a down payment on a house), you should look into more conservative investments, such as bonds, CDs, and money market funds. If your goal is something like "retiring in something better than a shack," then stock investments are your friends.

Could my money be put to better use?
It seems like investing is the best thing you could do with your money, right? But that’s not always true. If you have any debts with interest rates over 10%, you’re better off funneling your money into paying off your debt. Compound interest works both ways, so high interest rates on debts will only work against you.

Do I have enough savings?
Along the same lines as above, your money might be put to better use preventing debt. This means having an emergency fund and a "getting established fund" to take care of expenses you’ll incur when you start off on your own. You know, like security deposit and furniture for your fabulous new apartment. Don’t go overboard, but make sure you’ve got a nice cushion of savings before you dive into investing.

Investing What You’ve Got

So, you made it through the three questions, and you’ve decided it’s time to start investing. But, that just brings us back to the original question: HOW? The way I see it, there’s two ways to go about this:

No-Minimum Online Brokerages

Check out sites like ShareBuilder and Zecco - you can buy stocks and pay less than $10 in commission each time. Since there is a charge, what you’ll want to do is save up your investment money in a savings account, and then buy larger amounts every few months.

What, exactly, are you buying? Well, if you want to try your hand at individual stock picking, that’s your deal. But what I would do is buy index fund ETFs. These are little funds that act like stocks, but what’s really inside them is a tiny share of every stock in the market that it’s tracking. So if you buy an ETF that tracks the S&P 500, you’re getting a tiny share of each of 500 companies! Instant diversification.

Or… Save Up for Vanguard

Ok, so, why buy index fund ETFs instead of just buying index funds? Well, this again brings us back to the original question: how to do this with less than $1,000. Index funds have a really big buy-in. Vanguard’s index funds require a $3,000 minimum investment! Who’s got that lying around?

But the advantage to buying an index fund directly is you go from paying commissions to paying "expense ratios" - or a percent of the value of the fund. The reason I bring up Vanguard is that they’re known for having one of the lowest expense ratios around. Mmm… tasty low-cost index funds… that’s what I want!

So here’s what I’m doing: I’m putting money away each month in a savings account, building up to that $3,000 minimum investment. Once I get that, I can buy my coveted Vanguard index fund! And once I’ve made the initial investment, I can buy individual shares of that fund at my leisure. (I’ll do this within a Roth IRA, since the goal here is retirement!)

Saving up $3,000 can seem really, really frustrating. In fact, it was so frustrating to me, that I just gave up the first time I found out about Vanguard’s $3,000 minimum. I was 18 at the time, and I just pushed it out of my head - I’d never save up that much!

But… if I’d put aside $100 a month instead of giving up, I would have reached $3,000 six months ago. That’s food for thought.