Six Tips To Live By When You're Dead Broke

I’m broke.

I know, you’re broke, we’re all broke. Even so, I would consider myself extra broke, at least compared to all my peers, and my peers are not exactly the Rockefellers.

I’m not here to tell you about extreme couponing or how you should wash out ziploc bags and reuse them. I want to tell you some facts and things I’ve learned after my extended period of brokeness that I find most people don’t know about… or more specifically, they don’t even know about not knowing about. If that makes sense.

So, in no particular order, here is a list of six useful facts/tips/ideas that may help you out, which you probably aren’t aware of or haven’t come across or considered in the same way.

1. It’s possible to pay $0.00 to your federal student loans for 25 years and then have them completely forgiven. In fact, you will be considered “in repayment” for this entire time. Unless you are already in the know, like I am, I am pretty sure this just blew your mind, so trust me when I say, I know this for a fact because my significant other is currently on this plan and has been for years. This magical plan is called the “IBR = Income Based Repayment” plan. Not Income-Sensitive or anything else, Income-Based Repayment. On this plan, you never have to pay more than 10% of your income ABOVE 150% of the US poverty line. So if you have no (or very little) income, that = $0.00. If you stay on the plan and make all your payments for 25 years your remaining debt is forgiven. Please note, importantly, that the basic qualification to use this plan is that you make almost no (or no) money, so it’s not exactly a great way to scam lenders out of their money. But it sure is helpful in certain situations!

2. Check out IKEA. No, really. Check it out. I know there is some crappy crap there but also, there are some really good quality things that are wicked inexpensive. My current favorite example: Butcherblock countertop cost at IKEA: $125. Estimate from a “countertop guy” for the material only: $1600-1800. IKEA wins. Other recommended high-quality items: Mattresses – most come with a 25 year warranty and they are super comfy and well made. Certain couches and chairs: Same warranty, same quality. Other excellent things to check out: Sinks, hardware like handles and pulls for kitchen cabinets, actually kitchen cabinets too.

3. Don’t own a car. OK, obviously this only works for some people. But I have lived in Boston since 1998 and only had a car from 1999 – 2003. Non-car living is great. I walk more, which is basically the only exercise I get, and it saves an unbelievable amount of money and stress from my daily life. If I need a car, for example to take advantage of #2, I use zipcar or a cheap rental car. This obviously costs me significantly less than paying a car payment, insurance, gas, maintenance, etc. Oh yeah, and because I live in Taxachussets, I also don’t have to pay that stupid excise tax anymore. Yeah. Look that up. Awesome.

4. Somewhat related to #3… live in a city. OK, probably only certain cities. But if you can make your life urban there might be a lot of benefits you aren’t aware of. Besides probably not needing a car, you might get a lot of built-in entertainment of sorts for free. My city has a lot of free events all year. Plus lots of parks and lovely public areas to hang out in and enjoy. In the suburbs I would have my own crappy probably weed-infested yard. Also, Boston city residents can deduct commuting expenses on their state taxes and get a huge real estate tax abatement every year that significantly reduces what you owe.

5. Make a budget. I don’t mean balance your checkbook, I mean make an actual budget with numbers in it that you actually follow. For instance, don’t just eat out whenever the hell you want to and buy whatever you want at the grocery store. Come up with an amount you are comfortable spending and then stick to it. If you find it hard to stick to, consider making changes. But at least it gives you a goal. Many many years ago when we were both working and also very dumb and wasteful, the first month we actually started working on tracking our expenses we saw that we spent $750+ eating out, nevermind groceries. This is horrifying to me to this day. I would like to go back in time and strangle stupid young me and save all that wasted money. Your budget should have savings in it. Pay yourself first is a real thing.

6. Don’t waste money on stupid things. I’m not telling you not to splurge every once in a while – even I do that, and I don’t joke when I’m telling you I am cheap. But don’t subscribe to services you don’t use, don’t keep paying for a gym membership if you never go, don’t pay for more house or car insurance than you need, don’t spend $75 a month getting your hair dyed boring brown when you can do it at home for $6. Buy your glasses from someplace like Zenni Optical for $10, instead of $300. Note that I am not telling you to follow my ideas of what is and is not worth spending money on, but to think about your own priorities and what you actually need to spend on, versus what you just may be because you didn’t think about it or didn’t get around to making a change. Really look at everything!

Depending on the feedback you might never get such a post from me again, so save every precious precious fact I have given you here. On the other hand, if this is wildly popular and highly in demand, I can come up with more gems for you down the road. So let us know in the comments, you lazy broke bastards.