November 2007

Pinyo is having a giveaway at Moolanomy for sharing your investing story. Up for grabs are five copies (1 per winner) of Wise Investing Made Simple by Larry Swedroe. For my entry, I’m going to talk my first (and only) investing story so far.

A couple weeks ago, I wrote about my best and worst financial decisions so far. It just so happens that my best financial decision so far is also my first investing story. I don’t want to repeat it word-for-word, so I’ll give a brief summary and then talk about what I’ve learned from my first investing experience.

Summary

It was the summer of ‘03, and I was working a summer job in California. Being a college student, I saving money by eating disgustingly cheap meals, living with roommates, and carpooling. As the end of summer approached, I realized that I was experiencing something I had never experienced before — having money to spare.

It was tempting to spend the money on things that I really wanted at the time. I have to admit that immediate gratification is hard to resist sometimes. I’m not sure if it was luck, fate, or my own free will, but I came across an article about the power of compounding interest. It talked about how you could be a millionaire by retirement if you start investing early enough in the right places. This sounded like fun to me, so I did more research and opened a Roth IRA at the ripe old age of 22. Rock on!

Since then, I’ve contributed to my Roth IRA when I’ve had some money to spare from summer jobs. Everything is invested in Vanguard index funds, and it’s been great so far. With the index funds, there’s little to no maintenance involved (that didn’t keep me from checking my balance every day at the beginning). As of right now, my investments are around a 40% gain. I look forward to being able to max out my Roth IRA contributions each year once I finish grad school and start my first “real” job.

What I Learned

Be proactive
They don’t teach you about saving, investing, Roth IRAs, or mutual funds in college. My parents never talked to me about those topics either. I took the initiative to do the research on my own. There’s a wealth of great information on the Internet and in books. I started out by reading The Motley Fool, which I think is a good place to start.

Start early
I got a fairly early start at age 22, but I haven’t been able to contribute regularly since then. If I could turn back time, I probably would have opened a Roth IRA when I got my first job in high school. The younger you start, the less you have to invest to reach your ultimate goal because of the power of compounding interest.

Be patient
A Roth IRA is a long term investment — in my case, decades. Some people will find this hard to swallow. It’s hard for me, because it has put me in more debt for now. In the long run, there will be a huge payoff though, and I keep reminding myself of this.

What’s your story?

With the holidays coming up, you’re probably trying to figure out what gifts to give to all of the special people in your life. If you’re reading this blog, chances are you’re either a broke college student like me, or you have a special broke college student in your life. I’m here to help out people in the latter group.

As a broke grad student, I figured I could provide a little insight into the types of gifts a broke college student looks forward to getting this year. So without further ado, here’s the definitive list of gifts that will put a smile on every broke college student’s face.

1. Cash — This one is pretty self-explanatory.

2. More cash — Second verse, same as a first.

3. Even more cash — Same as 1 and 2 except there’s even more of it.

4. Mo’ money — It sounds cooler this way.

5. Hamiltons — Ten-dollar bills are nice.

6. Jacksons — Twenty-dollar bills are nicer.

7. It’s all about the Benjamins — Hundred-dollar bills will probably induce minor shock in your broke college student’s face before they’re able to smile.

8. A check — What??? I had to mix it up a little.

9. Did anyone mention…

Photo by quinn.anya

Yes, I’m implying that no matter how much broke college students pretend to enjoy getting another gift card to a store they don’t shop at anymore, they really just prefer money in its unadulterated form. This gives them the ultimate freedom to choose what to do with it. For example, I wouldn’t be able to pay back my student loans or contribute to my Roth IRA with a Best Buy gift card.

So before you run out and buy something your broke college student is going to return anyway, save yourself the hassle and give the gift of cash.

As I mentioned before, the only way to improve your spending habits is to figure out how much you’re spending. To track my expenses, I use a program like Quicken or Money, because most banks and credit cards allow you to automatically download transactions into these programs. The only problem is that these programs aren’t free. This is where Mint.com comes to the rescue!

Overview

If you’re interested in keeping track of your spending habits without having to pay for traditional finance software, then Mint is perfect for you. It allows you to track the activity of all of your checking, savings, and credit card accounts in one convenient location with a few added benefits.

Setting Up Mint

After completing the initial sign up to create your account, you are asked to enter the information for your various accounts. This is the same information you use to log in to your bank and credit card websites. If there’s one reason useful web applications like Mint will take a while to catch on, I think this is it — people still don’t trust computers. However, Mint assures that your information is as safe and secure as it is with a bank.

Upon successful authentication of your account info, Mint automatically imports the transactions, categorizes your income and expenditures, and then provides visual graphs and pie charts showing exactly how you’re spending your money. The entire process only takes a matter of minutes.

Spending Trends

Mint will graphically show you where your money is going by displaying a pie chart of your expenses divided into various categories. This allows you to quickly view your current spending trends and compare it to previous months.

One cool feature is the interactive pie chart. The pie chart displays general categories like “Food & Dining”, “Bills & Utilities”, and “Dining”. When you click on one of the slices, you are taken to a more detailed view of that category. For example, “Food and Dining” is broken down into “Groceries”, “Restaurants”, and “Fast Food”.

Transactions

While Mint tries to automatically categorize your transactions for you, it’s not perfect. You’ll most likely have to go back and fix some transactions to make the information completely accurate. You can do this on the Transactions page.

This page provides a convenient list of the transactions across all of your accounts. You can also search for specific transactions and view transactions within individual accounts. In addition to specifying a category for each transaction, Mint allows you to assign “Labels” to them as well. Labels are defined by you, and you can assign multiple labels to a transaction. This is similar to using labels in Gmail or tags in Flickr.

To get an accurate Spending Trends chart, you need to make sure your transactions are categorized properly. Mint makes this process easier by allowing you to assign rules that are applied to specific transaction names. For example, my cell phone bill was showing up as something weird, so I clicked on “Rename”. Then I typed in the correct name and checked a box to “always rename _____ as _____”. Setting up these rules will help Mint “learn” to categorize your common transactions correctly.

Ways to Save

Based on your current checking, savings, and credit card accounts, Mint will recommend ways that you can save money. For example, it may recommend a savings account with a higher interest rate or a credit card with a lower interest rate. While this may be helpful for some people, I haven’t found this feature very useful for me. In some cases, the offers aren’t accurate. Right now, it says that my high-yield savings account is at 0% APY (which isn’t true), and it recommends that I switch to one of their sponsors. I’m going to pass on this feature, but other people may find it useful.

It’s Always On

My favorite feature of Mint is that it’s always on. After the initial set up, Mint requires little effort to maintain. With Quicken, you still have manually run the program each time to update you information. With Mint, everything is completely automated. Mint automatically updates your accounts even when you’re not logged in. What does this mean to you? It saves you the time and hassle of doing it yourself, and it means that Mint can send you text message or email alerts to let you know about:

• Low balances in checking/savings accounts
• Credit card due dates
• High/unusual spending by category (i.e. Shopping, Dining, Gas)
• Bank/ATM fees and finance charges
• Large purchases
• Large deposits becoming available

You have full control over what alerts you receive and how your receive them in your profile settings.

Conclusion

Overall, I think Mint is great. Although it may not have as many features as a program like Quicken, it’s a great free way to track your finances. In addition, it’s really easy to set up, and it automatically keeps your finances up-to-date. If Mint had been available during my undergraduate years, I probably would have been able to avoid the two times I overdrew my checking account. This is a good thing — Mint the sort of program every college student should be using.

If someone asks you what the most common thing students forget to pack when heading off to college is, what would you say? Clothes hangers? Shower shoes? An extra set of sheets? My answer would be simple — a piggy bank.

Photo by Daniel Y. Go

A few years ago I was getting ready to head off to college. I had been exchanging emails with my roommate to figure out who was going to bring what. We had everything covered, or so I thought:

• TV — Check!
• Microwave — Right on!
• Mini fridge — Dude, we got one!
• Telephone — Sweet!
• Computers — I’ll take two!
• Nostalgia — Yes, please!

Looking back, I can’t believe I forgot to pack my piggy bank. How could I forgotten one of my favorite childhood pastimes? I don’t even want to know how many times I emptied my piggy bank, counted the change, and filled it back up.

I think we all have memories of our first piggy bank. I’ve been through a variety of piggy banks in my day — the coin cannon, the eerily cute bear, and the “OMG, it’s a giant pig!”-gy bank to name a few. However, the piggy bank I remember the most is the one that my family used the most — the old coffee can.

You can thank your parents for whether or not your piggy bank was actually a pig and whether or not there was actually any change in it. I was fortunate enough to have parents who taught me how to keep it stocked. Every bit of spare change ended up in that coffee can. I enjoyed watching the coffee can fill up to the top. It usually didn’t take long.

Having forgotten to pack my piggy bank for college, I’m not sure where all of my spare change went during my undergraduate years. Since I can’t travel back in time, I’m probably never going to find out. What I do know is that I’m glad I remembered to pack my piggy bank for grad school. In about two years, I collected over $100 in change in a lovely Gladware container. Considering it was just scraps of the cash I had spent, it was a nice chunk of change.

The best part of a piggy bank is that it holds money that you don’t even realize is missing. It’s kind of like a dog burying a bone and forgetting about it. But please, don’t forget about your piggy bank.

The best piggy banks don’t have to be shaped like pigs or banks. The important thing is that you have a common place to keep your spare change. You’ll be surprised at how much money ends up in there. Depending on how often you use cash, you could have anywhere from a few dollars to a few hundred dollars after a year.

So the next time you or someone you know is about to head off to college, please just remember one thing — you’re never too old for a piggy bank.

I signed up with CashCrate about three weeks ago, and since then I’ve earned a nice chunk of change to put into my loan fund. Like many others, I discovered CashCrate by coming across a glowing review about it on someone’s blog. They talk about how easy it is and how it’s their favorite way to make money online. I’m usually pretty skeptical about these things, but curiosity got the best of me this time. I decided that the only way really find out was to sign up and try it out myself. Could it really live up to all the rosy pictures people paint about it?

The Good

It’s not a scam. You really do get paid to do things. In this case, you complete offers. Some of them are free, and some of them aren’t. For some offers, you just have to complete a form with your contact info. For others you have to sign up for a free trial and remember to cancel it before it’s over, so you don’t get charged. With a $10 minimum monthly payout, it doesn’t take much effort to get there. If you have a credit card, completing two of the free trial offers is enough to put you over $10.

The Bad

It’s boring and tedious. Unless your lifelong dream is to become a professional offer completer, you’ll probably get really bored with completing these offers. There are ways to automate some of the repetitive tasks like filling in your contact info, but you’re still filling out form after form. For most people, this gets old really fast. Also, keep in mind that you have to be responsible enough to cancel the trial offers before they are over. Otherwise, you’ll get charged a fee which will most likely end up costing you a lot more money than you’ve earned.

The Ugly

Spam. You’re giving out your contact info to companies, so obviously, they’re going to be contacting you to try to sell stuff. As if we’re not already bombarded by enough solicitors, completing these offers will inevitably result in even more. Be prepared for it by using a separate email account to complete the offers.

These are just my impressions of CashCrate so far. I feel that they’re a lot more honest than the reviews I’ve found on other sites. The offers are easy to complete, but it’s tedious. Some people may be able to handle this, but others may not. I think the only way to find out is to try it out for yourself.

Every college student has gone through that phase where they eat disgustingly cheap meals to save money. I’m not a doctor, so the meals I’m about to list aren’t the healthiest options. However, they are some of the cheapest options. Without further ado, here are some of the most disgustingly cheap meals I’ve stuffed down my throat over the past few years:

1. Ramen - I think every college student eats at least one bowl of ramen noodles during their collegiate career. It’s cheap, it tastes good, and it’s not very healthy — the epitome of a college meal. For the health conscious, add some vegetables to give it more nutritional value and make it a more rounded meal.

2. $1 Menu - I have a love/hate relationship with fast food. I loved it, then I hated it, and now I hate to love it. It’s cheap, it tastes good, and it’s not that healthy. I see a pattern here. Fast food chains do offer healthier options now, so you can eat healthy if you choose.

3. Soup - Make a pot of soup and it’ll usually last you at least a week. If you’re too lazy to make your own, canned soup is also really cheap, and it goes on sale frequently.

4. Burritos - Bean and cheese burritos are one of the cheapest and easiest meals to fix. Burritos are great because it’s easy to add in new ingredients, so you don’t get tired of eating the same thing over and over again.

5. PBJs - These are great because you can mix them up too — PBH (peanut butter and honey), PBB (peanut butter and bananas), PBP (peanut butter and pickles). The combinations are endless.

6. Free food at campus events - I can’t even begin to remember how much free food I’ve consumed at campus events. If you tried really hard, you could probably find free food at some event on campus every day of the week.

7. Frozen dinners (the cheap ones) - Yes, I’m talking about the 10 for $10 frozen dinners. Quite possibly the most disgustingly cheap meals I’ve ever eaten.

8. Half price appetizers - A lot of restaurants have half price appetizers during happy hour. It’s a great deal as long as you don’t blow all the money you save on extra drinks.

9. Hot dogs - There’s nothing like a juicy hot dog to the get the day started. They have healthier hot dogs nowadays, but I still prefer the beef franks.

10. From the garden - Here’s one that I have yet to try, but my parents have been doing this for as long as I can remember. Growing your own food in a garden is great because you save money, and you know exactly where your food is coming from. Depending on where you go to college (urban vs. rural), this may or may not be an option for you.

This post is for people who scratch their heads when they see this icon:

By the time you finish reading this, you’ll only be scratching your head if it itches.

What is RSS?

That orange icon that made you scratch your head is the standard icon for an RSS feed. RSS stands for Really Simple Syndication, and it’s a family of Web formats used to publish frequently updated content such as blog entries, news stories, or podcasts. An RSS document, usually called a “feed,” “web feed,” or “channel,” contains a summary of content from a web site or the full text. RSS makes it possible for people to get the latest content from their favorite web sites automatically, instead of having to check each site manually.

RSS content can be read using software called an “RSS reader,” “feed reader” or an “aggregator.” The user subscribes to a feed by entering the feed’s link into the reader or by clicking an RSS icon in a browser that initiates the subscription process. The reader checks the user’s subscribed feeds regularly for new content, downloading any updates that it finds.

Why should I use it?

Subscribing to RSS feeds is like creating your own custom newspaper or magazine. You have total control over the sources of your content, and it’s conveniently gathered in one place. Instead of having to visit each individual site, you just have to open your reader, and everything is right there in front of you. Have you been itching to read Fox News and The Onion side by side? Well, now you can do it.

How do I set it up?

Modern browsers have support for subscribing to RSS feeds, so all you have to do is click on the link to a site’s feed. On most sites, it’s marked with the icon that formerly caused you to scratch your head. I’ll walk you through subscribing to the feed for this site.

1. Go to my feed: http://feeds.feedburner.com/BrokeGradStudent
2. You’ll see a list of options to subscribe. Choose your weapon of choice. I use Google Reader, so I’m going to assume you click on the Add to Google button.

3. That will bring you to the following page. Click on Add to Google Reader.

4. If you already have a Google Reader account, you’re finished.
5. If you don’t have an account, click on the Create an Account Now link.

Now you get the latest content from this site without even having to come here. Be sure to drop by and leave comments though!

For those of you who still don’t trust RSS, you can also subscribe via ol’ fashioned email.

I started this blog just over two weeks ago, and things are going better than I ever expected. I know it takes a while for a blog to get off and running, but it’s been fun so far thanks to the help of my fellow bloggers and readers who have been stopping by and leaving comments. I really enjoy reading the feedback.

I’ve also been participating in carnivals and festivals, which has been really exciting. In case you’re wondering, a carnival (or festival) is a collection of posts on a particular topic collected in one post and published on a single blog every week. Bloggers, like me, submit our posts to be included, and the host decides if the post meets their standards and is on topic. The host reads through all of the articles and usually selects a few of their favorites to highlight at the top of the post. Given that 80+ articles are submitted to some carnivals, it’s a lot of work for the host. I’m not quite sure if I’m ready to host yet, but it’s definitely something I want to do in the future. In the meantime, I’m happy with just submitting my posts into the carnivals. Enough explaining, you’re probably wondering why this was such a great week.

For starters, Pinyo did a great job of hosting this week’s Carnival of Personal Finance at Moolanomy. He’s also been leaving some great comments on my posts. To top it off, he selected my article on Why I Use Credit Cards as an Editor’s Pick! Given that Pinyo chose Wonders of World as this week’s theme, I’m glad that he still chose 10 top picks instead of just 7. Check out the carnival to find out why.

As if that weren’t enough, my blog was featured on Tuesday at MSN’s Smart Spending blog. There’s a great summary about a few of my recent posts. You should definitely check it out if you want to read my words in the words of someone else.

Last but not least, Kyle did a wonderful job of hosting the Festival of Frugality at Rather-Be-Shopping. I’m glad people are getting a kick out of buying cheaper underwear to save money. If only you could see what I’ve got on underneath these pants.

It’s great to know that what I’m writing is being appreciated by others. I can’t stress enough how much I value all of the feedback from my readers. It really motivates me to keep writing and provides me with ideas on how to improve this site. Thanks all around.

Well, it’s been two weeks since I signed up at CashCrate, and my earnings are still on the rise. Since my last update, I’ve completed a few more trial offers, which have boosted my total earnings for the month to almost $60!

One thing I’ve noticed is that it’s not fun having to wait for some of the offers to clear. As you can see, I have a pretty large balance of pending earnings. If some of those offers happen to clear any time soon, then I have a chance of breaking the $100 mark for the month, which would be awesome.

To help you out, I thought I’d mention a couple trial offers I completed recently that were credited within a couple of hours.

• Yahoo Success Center — $15.00 (-$1.95 fee = $13.05 profit)
• eVoice — $5.00

A credit card is required for those two offers. If you complete them, you’ll have a $20.00 payout for the month and end up with a $18.05 profit. Of course, you also need to remember to cancel the trials. You can either do this right after the offer clears into your account, or keep a list of the trial offers and their expiration dates and cancel them all at once before the trial period is over. Pick whichever works best for you. Regardless of what method you choose, please just remember to cancel the trials. The whole point of this is to make extra money, not to make extra money and spend it on subscription fees.

For those of you just getting started, be sure to check out my tips on making money with CashCrate.

Good luck!

Thanksgiving is a great time of year to get back in touch with friends and family, sit down together, and enjoy a delicious meal. Just because you’re a broke college student like me doesn’t mean you can’t have a feast at Thanksgiving. A great way to cut down on costs is to have a Potluck Thanksgiving. My family does this every year, and it works out great. Make sure you figure out what everyone is going to make beforehand, so you don’t end up with 10 pumpkin pies and no turkey.

If you’re not sure what to cook, there are tons of free recipes online. One of my favorite sites is All Recipes. It’s great because users can rate and leave comments on the recipes, and most of the time they’re right. Almost every five star recipe I’ve tried has been a keeper. The comments are also helpful because people will suggest changes to the recipes that make them even better.

I spent a few minutes on the site and put together a tasty Thanksgiving menu:

Grilled Turkey - Try something different this year. Grill your turkey.

Bread and Celery Stuffing - Quite possibly my favorite part of Thanksgiving. Don’t forget the stuffing.

Roasted Garlic Mashed Potatoes - A staple dish in every feast.

Perfect Pumpkin Pie - No Thanksgiving meal is complete without a piece of pumpkin pie.

Happy Eats!