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I hope you can join me over there and keep in touch just like you have been doing at this website as well.

After the costs of textbooks are taken off the table, the next area in which spending can easily get out of hand is food. Everyone has to eat, but the question is how you can eat without hurting much in the wallet? Here are a few of the things that I have seen that could help in managing costs of eating.

Attend Cultural Events: Every college campus has an international student organization and as a current (and former) member of several international student organizations I can attest to food being a major item in planned events. Most of these events take place on weekends, during dinner and cost little to no money. So instead of spending money at a Chinese buffet off-campus, support the Chinese Student Organization by attending their cultural event. You get the added bonus of interacting with people of other cultures in addition to eating well. Check your campus newspapers for details on these events and prepare yourself for some delicious dining.

Buy groceries: This is the most common way to save money. Knowing how to cook is an advantage but even if you don’t know how to cook there are easy food packages from Ramen to 5-minute rice to Hamburger Helpers. It’s a guarantee that you will save with a $2 ground beef and $2 hamburger helper package because it costs less than buying a similar food item that’s premade and you will usually have enough left over for a full meal. There are plenty of cheap and easy-to-make food packages ranging from oatmeal to Ramen to 5-minute rice. This is useful whether you live on or off campus. For more on grocery shopping tips, check out an older article from Get Rich Slowly

Cook in bulk: If you’re already buying groceries, take time on the weekend to make 2 – 3 different meals in bulk and refrigerate them for the rest of the week. Cooking more than one meal provides the variety required in a regular diet and reduces the monotony of only eating one meal (Of course if you’re like me and loves eating rice for days on end, there’s nothing wrong with that either). Another way this helps to save money is when it comes to resisting invitations from friends and co-workers who are constantly asking you to go to lunch when you just can’t afford it. Now you can say “I packed my lunch already.”

Make friends: If you don’t have a kitchen on-campus, offer to cook for a friend/classmate that lives off-campus and you both can share the meal. If you do have a kitchen off-campus and can’t cook or don’t have the time to, invite someone who can but doesn’t have a kitchen. This is basically an exercise in trade by barter. It still works even in 2009 (and beyond)!

Organize a Potluck: Although potlucks are usually organized as social events to foster camaraderie and conversation, it can also be another way to cut expenses. Consider that instead of eating out at a restaurant and paying individually, you can have a variety of dishes at a low cost. Although graduate students organize potlucks more frequently than undergraduates, this is a benefit to both parties. Using this idea, potlucks can be organized around themes (Game Night), sporting events (Super Bowl) or even T.V. shows. And if you are unable to cook, you can always offer to provide drinks.

Coupons: Before you skip over this section, remember that using coupons are more of a mental hurdle than anything else. How would it look eating at Applebee’s with a coupon for $5 off? Does $5 really make a dent in a $30 meal? It’s an internal battle, but when you think about it $5 is essentially half of a movie ticket or a haircut or 2 cups of coffee from the campus shop. Websites like campusfood.com and restaurant.com regularly offer deals and coupons to local restaurants. For those living off-campus, there is regular bulk mail delivered featuring pizza coupons and fast-food deals. Although these foods are inherently unhealthy, and minimizing them in your diet is the most beneficial habit, the focus here is not to eliminate bad habits but attempt to reduce their cost.

Brew your own coffee (or tea): From helping you make it through an all-nighter to giving you that extra kick in the early morning, caffeine intake usually increases proportionally with the time spent in college. A cup of coffee can range from $1 – $5 depending on the temperature, flavor and size. Yet this cost can be highly reduced if you make your own beverage from home. A little research using Wal-Mart and Walgreens website provides the following

Some people don’t consume that much coffee, but if these numbers are way lower than the amount you spend on coffee (Check out these useful tools) it might be time to modify.

Eating well does not have to come at a premium and food doesn’t have to bite into your pocket money if you network with people and make some of the things you pay high prices for. What are some of the other ways in which you have been able to reduce costs? I’ll update this article based on the suggestions I receive.

Coming up next in the series – Money Tips from a Professional Student: On Housing

Image from PhD Comics

So you have a stipend or loans or money from the parents to cover your books, somehow it still doesn’t make parting with $400 for textbooks any easier. Even more painful is paying $120 for a new book and only to sell it back to the bookstore for a measly $40. I know this experience very well and I learned (as a senior) that I could have saved a fortune over the course of three years. Some of the methods I tried require more effort than others and one of these methods (using older editions) you may never try. However, the goal here is to get to keep more of that textbook money in your pocket (or bank account).

1. Buy Used Books: The most common technique is to buy used books from sites like Amazon.com, BarnesandNoble.com and half.com. These sites usually have various editions and versions of the book and connect you to other vendors (usually students) who are selling the book. A disadvantage with this method is that you may not know the required text until the professor hands out the syllabus on the first day and then you have to spend more money on shipping to receive the books on time.
2. Contact your professor: When you aren’t aware of the required books, email the professor(s) over the break to ask about the books for the class. You can let them know you want to get them ahead of time to cut down costs. Almost all professors will oblige you. Once you get the response, go to the aforementioned sites. An added advantage to this route is that the professor will already know your name before the course begins and that never hurts.
3. Bookstore Website: Once in a while, you come across professors with tardy responses or no response at all. In that case another option is to try your college’s bookstore website. The bookstores get the list of course textbooks way ahead of time and then list the books on their site for purchasing. Take advantage of this and look up the required books on the site and then get them cheaper from other sites. Think of this as sticking it to them for buying back your books at ridiculously low prices.
4. Use the Library: Request the book from the school library and use it while waiting for your book to arrive from the site that you will order from. Better yet, use the book over the course of the quarter and renew it as many times as possible. In the state of Ohio, all public college libraries are linked so if you don’t find a book at Wright State University, you can rent them from from Ohio State University. Ask your school librarian if there are opportunities like this at your school. This means you should know where the library is if you don’t already.
5. Use preceding edition(s): Something I have noticed (especially in the sciences) is that material doesn’t change much from one edition to the next especially with books that have undergone several revisions (Really good books undergo very few revisions and revisions are years apart) Changes usually involve extra examples, problem sets and pages with the subject material unchanged. When I went this route, I just made photocopies of relevant questions using my friend’s textbook. If you want to insure yourself against risk, borrow from the library to compare how drastic the changes are to help you make a decision on obtaining the newer edition. Note: If you decide to do this, make sure to check with someone in the class who has a recent copy to make sure that assignments are the same.
6. Rent and Exchange: While writing this post, I learned about two other opportunities I haven’t tried, but are useful nonetheless.
   • A student of mine recommended chegg.com and rentabook.com which are sites where you can rent textbooks. I would advise anyone who is doing this to check the math just to make sure that it’s worth it. Sometimes it’s better to own than to rent especially in cases where you might need the book for a whole year. If you’re into nature preservation, you will like that chegg plants a tree for each book you rent. Environmental Awareness and Expense Control all at once.
   • Another student referred me to a book exchange website hosted by the school’s student senate. I am not sure if other schools have this sort of network, but I know that most schools maintain a listserv dedicated to students trying to sell their materials at really low prices. Your Resident Assistant might be a helpful resource here.

Buying textbooks are a basic part of any college student’s career and the experience is that much sweeter when you know that you won’t be breaking the bank every semester.

Coming up next in the series – Money Tips from a Professional Student: On Expensive Eating.

Image from http://www.flickr.com/photos/pleasewait/ / CC BY-NC-ND 2.0

I’m literally taking a moment to digest how nine whole months have flown by . . . . . OK! Moment Over.

With about 90 days (92 days to be exact) left in 2009, I want to mention 6 steps using the Achievers Focusing System (click image below to enlarge) from Success Principles to make the latter part of 2009 your best yet.

Step 1 – FOCUS AREA: In what aspect of your life do you want to make the most impact?

The Achievers Focusing System has divided areas of life into seven

• Finance & Wealth
• Career
• Free Time
• Health and Appearance
• Relationship
• Personal Development
• Community & Charity

When the year began, you probably thought about making a change in 1 or more of these categories and somewhere along the way that got lost in translation (9 months wheezing by can do that). No matter, a lot can still be done in 90 days by making minute and incremental changes.

By the yard it’s hard, but inch by inch anything’s a cinch – Brian Tracy

Instead of trying to cover all these areas at once, start by selecting the most important area where you want change and then select the next most important area and so on.  Consequently, you will be creating a ranking system for the next three months.

Step 2 – GOALS: What are your goals for the rest of the year?

Write down one goal in the area(s) that you have chosen previously. Using the document, this can be written in the boxes provided.

This is where problems arise. In defining goals, they have to be measurable i.e. there has to be some sort of finish-line related to  an accomplishment and/or  time frame. The lack of a time frame usually results in complacency. The lack of defined accomplishments usually results in a loss of interest and boredom. Using goal #1 above, I will have to pay off $1,000 in the next 3 months. With this, I have defined the accomplishment and the time-frame. How can you measure the goal you want to attain? Is it a series of accomplishments or is it one you can measure with time?

Step 3 – ACTIVITIES: What steps need to be taken to accomplish this goal?

Outline the necessary steps to completing this goal. This can be done using the time-frame or accomplishments as a guide. The point of doing this is breaking down the goal into manageable chunks. By so doing, the viability of the goal is maintained and it would seem neither large nor looming.

For my goal, here’s what I’m thinking:

In addition, list some non-activities as well i.e. activities you shouldn’t engage in which will also help with accomplishing your goals.

• Leave credit cards at home ALWAYS
• Pay for purchases using checking account

Using the Achievers Focusing System, these activities are then spread out over 12 weeks. This allows for looking at the overall picture while keeping track of the activities spread out over the 90 days.

Step 4 – SMALL VICTORIES: What happens when you complete an activity?

Sometime ago I mentioned how celebrating small victories are essential to boosting morale. As you slowly advance towards your goal week by week, remember to take a moment to digest how far you have come. This moment of reflection can be used:

• to further fine-tune future activities
• to ensure that the pace is still being kept
• to rest before going on to the next task

Once each activity is completed, take a breath and congratulate yourself on making it this far. For me I will take great joy in seeing Balance: $0.00 and I will also update my account at NetworthIQ at the end of every month because seeing that bump provides additional motivation. Then keep pressing on knowing that you are closer than when you first started.

Step 5 – ACCOUNTABILITY: Should I involve others in my goal?

The Achievers Focusing System includes a section for an Accountability Partner. This is the person who you have shared your goals with and you know will be a willing motivator in your cause to improve. Sometimes goals are like a new toy: you play with it for a few days excitedly; then over time, the excitement fades and the toy starts to collect dust. This is when your partner(s) can help to dust off some of that dust and remind you of what you set out to do.

Therefore, since we are surrounded by such a great cloud of witnesses, let us throw everything that hinders . . . . and let us run with perseverance the race set out for us. Hebrews 12:1

Your accountability partner serves as that witness to your commitment to yourself in that area of your life.

Step 6 – FINISH LINE: When does my goal end?

As mentioned in the beginning, this goal(s) should be tailored to cover the remaining 3 months/12 weeks/92 days of the year. Therefore while striving to complete each activity always keep in mind your finish line by:

• Tick off the days on the calendar
• Cross out your to-do list each week
• Little steps will yield great results

By so doing, you are constantly reminded of where you are trying to go

Image courtesy of Mr. Mystery

• your source of income suddenly stops?
• you’re suddenly ill and insurance can’t cover all the costs?
• you have to travel immediately due to a close relative’s passing away?
• your car breaks down and you realize you have to spend $700 or more on repairs?

Sure you can use credit cards to cover some of these expenses, but how long can you do that for especially if the first situation is also true. This is when the Emergency Reserve comes into play. It sounds basic and like common sense, but this is the most important account for any independent person (and often the most overlooked). In discussing this, we can focus on the What, Why, Who, Where, When and How?

What: What is an Emergency Reserve?

According to the Merriam-Webster Dictionary Online, an emergency is

An unforeseen combination of circumstances or the resulting state that calls for immediate action

Two words stick out clearly here: unforeseen and immediate. Consequently,

An emergency reserve is money kept aside for unforeseen situations that call for immediate attention and action

This means that this money should only be used for things that are unplanned. Consequently, emergency reserve should be separate from your savings. Usually when we save, we are saving for a goal e.g. a vacation, new gadget, textbooks, accessories etc. As such, while savings is usually money for planned activities, an emergency reserve is money for unplanned activities. In a way, you can call your Emergency Reserve your financial Red Cross because it arrives on the scene when emergency rears its head.

Why: Why should I care about an Emergency Reserve?

As mentioned above, this money is for unforeseen circumstances which can (and does) happen to anyone. Thus the prime reason for having this reserve is simply: peace of mind. Rather than worry about money in a time of crisis, you know there is money somewhere and that helps to focus on the crisis itself. Besides, if you already insure your car and health, shouldn’t you also be insuring your finances as most emergencies hit the pockets first?

Who: Who should have an Emergency Reserve?

An emergency reserve is necessary for anyone who is (or wants to be) dependent on themselves for financial resources. Therefore, this person has some sort of regular income which pays their bills and they are not necessarily dependent on their parents or family members. This reserve is also important for those who have dependents.

When: When should I start an Emergency Reserve?

As soon as possible! Right after reading this article!! I’m kidding. Well kinda. In all seriousness, you never know when you will need this, so it’s best to start as soon as you can.

Where: Where should I keep my Emergency Reserve?

Since this money is required for immediate action, it should be kept in a savings account that is linked to a checking account. This way, the money can be easily transferred when it is needed. I would stress here that it shouldn’t be in a checking account simply because just as much as this money should be accessible, it should also be untouched. With an emergency fund tied into a checking account this is very prone to happen.  In addition, the advantage is that it generates interest while sitting in the savings account when untouched.

How: How much should an emergency fund have?

For this question there isn’t always a straightforward answer. I have heard of 1 month, 3 months or even 6 months worth of expenses saved. I have also heard of using figures like $1,000 – $5,000. I personally keep set my goal at $1,000 just because it’s a nice round figure and also because it covers a month worth of expenses at the moment. When I leave graduate school and start a family, I am sure that number will go up. The most important factor here is that you set a minimum that will give you peace of mind.

I’m hoping that I have somehow convinced you about the relevance of this very important financial tool or at least initiated some thoughts into starting your own emergency reserve. When crisis happens, you will have your own Red Cross to lean on.

Based on Dan Pink’s lecture on motivation (which I embedded in another article), there are three human motivating factors.

• Autonomy – The urge to direct our own lives
• Mastery – The desire to be better at something that matters
• Purpose – The yearning to do what we do in the service of something larger than ourselves

As you begin to think about what motivates you in general, you will be able to rearrange the middle portion of the pyramid (in between basic expenses and miscellaneous expenses) to conjure up a picture that aligns with your own values.

Autonomy: Your Money and Yourself

Image courtesy of Flickr

If directing your life is what motivates you then debt reduction, financial independence and personal improvement will rank high in your pyramid. The most important thing to you is being in control of what happens in your life and blazing your own path. Therefore, neither owing money to credit card companies nor retiring while being financial dependent sit well with you. As such, most of your spending will be directed at your money going mostly into your pocket prior to anything else.

Purpose: Your Money and Others

Image courtesy of Flickr

For some, being financially fit is the means while the end is the ability to serve others and the community. If the realization that there’s more to life than your own needs, then donations to church and charity will rank high on your list. Those who attend church have a set value at 10% (tithing) and will also donate in others ways. Even if you don’t attend a church, you find that donating towards a cause brings about a certain kind of satisfaction. In addition, these donations can also be used for tax deductions.

Another area not reflected in the pyramid is provision for family (both immediate and extended). I told a story of how my father laid the foundation for my siblings and me to go to college. That couldn’t have happened if he didn’t believe that part of his purpose was leaving a legacy to his children.

Mastery: Your Money, Yourself and Others

Image courtesy of Flickr

Sometimes, motivation lies in being better at something for the sake of just being better (epitome of kaizen). Two of the most popular New Year Resolutions in the U.S.A. are managing debt and saving money. Hence it would appear that most people would fall under this category as most believe that finances matter. This belief combined with the desire to understand finance could be a motivating factor for another set of people. Therefore, Goals and Emergency Reserve would rank higher in your pyramid. Goals motivate towards reaching a pinnacle while mastering personal finances starts with being prepared for emergencies. Personal Improvement would also fall under this category as mastering finances would include studying financial matters and learning from others.

Most of the time, personal motivation will come from a combination of two or all three factors and therefore you will find that your values overlap. In the end, the final picture is letting the things that motivate you in life also motivate shaping your finances. Create your own picture and it will lead to spending habits that are aligned with what you think is important.

In his book The Six-Day Financial Makeover, Robert Pagliarini warns that when spending isn’t planned, it often follows this pyramid with money flowing from the top to bottom and reducing in quantity as it trickles down.

Like required tasks of the day, Basic Living Expenses are the first things that normally come out of a paycheck. You pay rent, water and electricity bills, insurance, buy groceries etc. However, if there is no plan in place for the rest of the money, whatever is left over often gets spent on Miscellaneous Expenses such as shopping, entertainment and the occasional dining out. Before you know it, there’s very little left over and this little is stretched into the remaining part of the pyramid. This is the kind of lifestyle that tends to lead to living paycheck to paycheck and a continuous cycling of debt.

Robert then suggested a different sort of pyramid which he termed the “Optimized Spending Pyramid”

The top part of the pyramid is still Basic Living Expenses while the Miscellaneous Expenses lie at the bottom. Everyone in the finance field will agree that this should always be the case i.e. Pay bills first and then spend chump change on wants. The disagreements arise in the middle portion of the pyramid and the order in which those items should occur. Should Debt be paid off first before establishing Emergency Reserve? Should I give to Charity or the Church when I have debt piling up? Should I be saving for Retirement when I don’t have an Emergency Fund established? And so on and so forth.

The fact is there is not one correct answer. Even when there is an answer that makes sense mathematically, it can be hard to tailor emotions to the arithmetic. This is where personal values come into play. A bible verse says

“Where your treasure is, there your heart will be also.” (Luke 12:34)

The order of priority simply depends on how much value you place on each area of the pyramid. If it’s more important to you not to owe anyone anything, you will find yourself focused on Debt Reduction. If you care a lot more about things going on with the less-privileged in your community, Charity will rank higher in that pyramid. If you care a lot more about developing your skills e.g. learning new software for your job or improving your reading skills, Personal Improvement will rank higher on the list. Whatever the case may be, this portion of the pyramid will be ordered entirely on the things you value most.

Money, like time, if not planned wisely often trickles into the areas of life which don’t rank high on the priority list. Therefore establishing a plan is important, but more important is that it should be your own plan. When the created plan is yours and based on your values, you’re more prone or at least have a stronger desire to follow it.

As a follow-up to this article, tomorrow I will connect Dan Pink’s talk about the three aspects of motivation and relate it to how you can begin to arrange the middle portion of this pyramid to fit you.

Note: I found out this morning through Get Rich Slowly that Robert Pagliarini is offering his E-Book Plan Z: How to Survive the Financial Crisis as a free download. I haven’t checked it out but his Six-Day Financial Makeover was easy to read and comprehend and I expect this book to be the same.

Momentum – A property of a moving body that determines the length of time required to bring it to rest when under the action of a constant force (Merriam-Webster’s Online Dictionary)

Momentum is a wonderful term in physics used to describe the relationship between the mass of a body and its speed. If a body is large, it will have a large momentum. If a body is moving quickly, it will also have a large momentum. Using the definition from the dictionary, momentum is related to the amount of time it takes to stop a body that is moving. Once momentum starts to increase, it becomes more and more difficult to stop.  In other words:

Large Body – – – > Large Momentum – – – > Long time to stop motion

Like most scientific principles, this law of momentum is connected to everyday life and human behavior:

Major Project – – – > Major Momentum – – -> Long time to Stop Working

Think about this: Ever been in a situation where you’re just setting up your books to study some material and then someone calls you? Is it more difficult to quit when you haven’t started or to ignore the phone? You might find yourself saying, “Let me finish this paragraph” or “Let me solve these problems and then I’ll call back.”  How about when you decided to start saving up for emergencies? How much easier was it to spend on a whim when the emergency fund was empty as opposed to when you’re a quarter of the way to the goal?

I have been dreading writing my proposal (mentioned in my Goal Report) since I realized I had to do one. This dread led me to continually postpone while I kept thinking about the perfect structure in the back of my mind. Well, I never got the perfect structure I wanted until I began typing. Once I started, my ideas started to take shape and I was able to rearrange and integrate my thoughts better within the structure of the proposal.  The same thing happened when it came to investing. I had been talking about investing since I started graduate school 5 years ago but I didn’t start until this year. I always just told myself I didn’t know enough. Last March, I decided to just plunge in and this forced me to begin to learn more. I initially sought advice from 2 uncles who had been involved in financial markets before and they provided tips on what to look for (one uncle actually thought I had started because I had talked about it so much). It wasn’t until I began investing that I learned the different kinds of mutual funds that were out there and then started looking for funds with low expense ratios.

What have I learned?  The way to overcome the lethargy of beginning a new project is to just start (Nike slogan comes to mind here), no matter how small the actions are. You want to save $1000, start by saving 2%-5% of your income today and slowly increase that. You want to improve your cardio rate: start by jogging for 5-10 minutes a day. You want to start investing:  there are mutual fund companies that begin at $25 and others at $50 per month for mutual fund accounts. It takes time to get the ball rolling, but as time passes with you chipping away, it becomes a lot harder to stop. Take a step today, it may be in the wrong direction but you won’t know unless you step.

In Stephen Covey’s book (7 habits of highly effective people), the first habit is described as be proactive (rather than reactive).

To illustrate, this is reactive

And this is proactive

Mr Covey explains that to move from dependence to independence, the choice  to be proactive is the first step i.e. realizing that we control our actions. Not our environment or our upbringing or our nature. It’s easy to say “That’s the way I am” or “They made me angry” but that does not explain the response. When there is no gap between stimulus and response (reaction), fireworks always result. The point is not that we shouldn’t react at all, but to produce a measured response that reflects thought.

I was reading an article recently where an older man was advising a younger man on marriage (The source of that article is a man talking about his first 100 days of marriage. His wife is also blogging. Very entertaining and eye-opening reads). What the older man does when he senses things getting testy between him and his wife is ask “How important is this to you?” Just 6 words. Yet, those words and the silent moment aftwerwards alone would greatly reduce the divorce rates and breakups that happen. Just taking a small moment to think and then respond always makes a huge difference.

Now this habit is not saying that there should be no response. I have seen and experienced the danger of bottling up emotions can do. It is important to respond, but just as relevant is the thought prior to response. The stimuli for the Mr Wilson and Mr West was a difference in opinion, what’s yours and how do you deal?

Brain image from Wikipedia.

I remember when I first began working out because my friend would always tell me to work out with him. He was a very muscular guy and loved going to the gym and talked about it all the time. It became contagious so I would tag along with him and try to learn the tricks of the trade. After about 2 weeks of lifting, I would be disillusioned and would go back to being a hermit at the library once more. This would happen once a quarter.  I would be excited to work out again, but my reason for going to the gym was never strong enough to overcome the difficulty of the situation. I had a high metabolism, so I wasn’t doing it for the weight. I didn’t care about bulking up and I hadn’t seen a difference in 2 weeks (naïve I know) so what was the point?

Then it hit me! (“Eureka!” said Archimedes)

No matter how high my metabolism was, it didn’t mean I was healthy. I still couldn’t run hard on the soccer field for more than 3 minutes without getting winded and bent over. I couldn’t do more than 20 pushups at a time. Basically, even though I looked fit, I just wasn’t. So my attitude changed from wanting to look like my friend to I need to improve my overall physical health. It didn’t mean that it made it easier for me to go to the gym often; I still didn’t like running or any cardio activities. The difference was now my reason held up to the rigors of what I was doing. When I felt too tired to exercise, I thought about the idea of not being able to run around with the kids or being sick due to high cholesterol or high blood pressure.

In connection to this same article, Dan Pink (Al Gore’s former speech writer) delivered the talk below on TED (TED is a really great site of entertaining speakers sharing ideas. There’s a lot of amazing stuff there to check out at your own leisure)

Vodpod videos no longer available.

A direct link to the video is here

The relevant point (as far as this post goes) is at the end where he mentions that there are 3 reasons that motivate us to do things

• Autonomy – The urge to direct our own lives
• Mastery – The desire to be better at something that matters
• Purpose – The yearning to do what we do in the service of something larger than ourselves

One or a combination of these is what governs our attitudes and actions towards the physical, spiritual, financial, intellectual and social aspects of our lives. However I am finding that execution only succeeds when the attitude is right and strong enough to hold up to this execution.

Thoughts?

Image courtesy of Physics Department Weber State University