Open

Employer Spotlight

Recruit Gen Y Stars

You need new tools to attract the new breed of talent - Experience will help you build your team with Gen Y stars.

Go

Ease of Use

Our management dashboard helps you easily post jobs, pinpoint targeted candidates and manage your talent pipeline.

Go

All Needles, No Hay

Don't wait for the best candidates to come to your door - with Experience, you can proactively target top talent.

Go

Build Your Experience

Experience is your most important asset - we're here to help you find that next opportunity.

Go

Tell Your Story

You're so much more than just your resume. Showcase your Experience.

Go

Connections Matter

Introductions are made easy when you have Experience -- connect with alumni, mentors and industry insiders.

Go
Forgot?

Use eRecruiting by Experience on campus?
Find your school here.

Home  > Article

Tips for Living within Your Means

Salary.com

"My savings account is always empty and I never manage to pay down my credit cards"

 
It doesn't take long before they're staring down an even higher stack of bills and wondering why they're still broke.
 

"It's not like I'm disorganized," said Michelle E., a 28-year-old paralegal from Aurora, Colorado. "My friends even joke about my CD collection being alphabetized. Yet my savings account is always empty and I never manage to pay down my credit cards," she said.

Cathy W. is 26, single, and facing a similar dilemma. "I'm a freelancer in computer graphics based out of San Francisco. I think I make decent money, but there's never any left over. I don't see how I could ever afford my own home - certainly not in this town. I have no investments, never mind retirement plans. How am I supposed to do it? That's what I'd like to know."

Michelle, Cathy, and others like them do have alternatives that could increase their income. They could hone their negotiation skills and ask for a raise or increase their freelance rates. If that fails, they could look for a better-paying job, or get a second one until they lessen the weight of their debt. But if they don't fundamentally change how they handle money, earning more now could even worsen their situation in the long run. If extra income isn't properly allocated, it often triggers a hike in living standards. People treat themselves to those designer shoes they've always wanted, get a better car, replace the raggedy couch. It doesn't take long before they're staring down an even higher stack of bills and wondering why they're still broke.

Take control of spending
The latest government figures show that consumers' outstanding credit rose by $12.9 million to $1.5 billion. The 10.2 percent annualized gain in credit was well above analysts' expectations. The personal savings rate dropped to a new low of -0.8 percent in the same month as consumer spending continued to grow. This negative savings rate implies that consumers finance their spending through borrowing, selling investments or other assets, or by spending past savings.

With so many Americans living beyond their means, what can people do to rein in spending? Bill Ellis, a commodities broker in Portland, Oregon, makes it sound simple. "I'm no financial wizard, but there are tried and tested rules of handling money that make for obvious savings even in the short term," he said. "People in financial services tend to assume the rest of the world is clued in to this stuff. But a lot of people would rather get a root canal than sit down and figure out a plan."

Is that all it takes, then - a plan? According to the self help books, of which there are shelves upon shelves in any bookstore, the first step to better personal finances is to know where your money is going. "Actually, we used to joke that the first step to creating wealth seemed to be writing a 'how-to' book on the subject," said Ellis. "When we're talking about someone with major credit card debt, though, we'd better hope they borrowed the self-help book from the library."

How hard can it be?
"The reality is that the people who most need to make drastic changes only do it in baby steps, if at all," said Ellis. "In fact, straightening out your money is not difficult to do." Easy for him, maybe, but what about those of us who haven't used a calculator since high school?

Assess the damage
To determine the extent to which you live within your means, said Keith Fortier, a compensation consultant at Salary.com, start by keeping track of what you spend for one month. "Carry a notebook to jot down each item and its cost to get a quick sense of what falls through the cracks," he said. "How much of your hard-negotiated take-home pay went to genuine essentials? How much of it went to items you could have done without?"

Financial analysts agree that learning the difference between what you need and what you want is crucial to getting out of debt and into wealth creation. People need food, clothing, and shelter; they want personal trainers, designer moisturizers, unlimited bandwidth, and tickets to the Superbowl. In truth, most Americans don't need a fraction of the stuff we spend our money on. It's the bare necessities that form the bedrock of any budget.

- Audrey Arkins, Salary.com contributor


Copyright 2000-2004 © Salary.com, Inc.






More Related Articles


How close to the median should I be?
Although you shouldn't disclose your salary expectations at the outset, it's good to know where your pay ought to fall in relation to the market.

What expenses should my employer pay if I work from home?
Working at home can save employers costly corporate rents and can give employees some much needed flexibility in balancing their work and private lives, for example, by eliminating commutes. But when you work from home, make sure your employer reimburses your expenses.

Building Credit Ideas
There are several ways that we can build credit.



Google Web Search
Didn't see what you were looking for?
 
powered by Google
Copyright ©2017 Experience, Inc Privacy Policy Terms of Service