Frugaling

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Make An Extra $10000 In 6 Months

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Unbelievable how made an EXTRA $10000 In 6 Months! Yes, you can do it too!

Where I Was

Tomorrow marks the 6-month anniversary of Frugaling.org! On May 4th, 2013, I finally wrote about my struggle with student loans and my hope for a better life – one without the worries of excessive debt. My debt sat at $37,719 and would be pushed over $40,000 with the fall semester’s loans. I was scared, and I wondered aloud, “Would the amount of debt I have prevent somebody or scare them away from a serious relationship or marriage? Could debt be so burdensome, if shared, that people just avoid it at all costs?”

Remarkably, I’ve been able to continue to churn through article after article, while maintaining one of the busiest graduate school semesters of my life. But I’ve been motivated by a pressing need to change the paradigm. I live a life where everything I enjoy is taxed at an artificial rate: 6.8% active interest.

Starting a website like this was almost comical. My friends, coworkers, and family members generally gave me a resounding “That’s nice” message. Most thought it was a waste of time. I appreciated their rejections and skepticism, while completely fighting against every concern. People thought I was crazy to be in grad school, writing about personal finance, and have the lofty goal of paying back debt while in the process.

Make An Extra Side Income Money Challenging Gif
There was definitely some skepticism to my excitement…

Where I Am

When I started, there were about 10-20 readers per day. It was safe to say my friends were taking pity on me and visiting to be nice. 6 months later, the site brings in 20 times that per day, and is consistently growing. Concerns over car/student loans, ways to save, and ideas about making more money have led to a site with growing popularity. Frugaling is about to cross the top 150,000 websites in the world and received about 83,000 visits in 6 months.

The excitement goes beyond website statistics. As I open up my Mint.com account and peek at my debt balance, I’m reassured by positive change. My debt load now sits at $34,179 – that’s a reduction of $3,000! I was able to pay back all the loans I took from this semester and pay back an extra $3,000 – in total it’s about $6,000.

By creating this site, I’ve been able to making serious amounts of advertising revenue – in the neighborhood of $10,000. I’ve shared this number with a couple of most closest friends and family members; suddenly, this is a serious living. Comically, I’ve never made more per month than the last 6 months. The money has been directed primarily to student loans and creating financial savings. I’ve grown more hopeful by the dollar, as I realize there’s an out – I can do this!

I feel like a lottery winner. Now, my monthly interest payments sit at $100 a month for the student loans. This is both manageable and something I’m ready to devour. Left and right, I’ve been paying my loan manager $500 to $1,000 at a clip. I’ve been paying so much money that the servicer sent an email reminding me that nothing was “due” yet. Little do they know that I want to pay off the active interest loans prior to graduation. If I fail, that’s okay – I’d rather fail trying.

Where I Am Going

I don’t want to lose my original intentions for starting this site, though. I created Frugaling to share my voice about personal finance, offer a reflective perspective, voice frequent opinions, help people tackle their debt, and encourage my readers to get frugal. For the next six months, I’m going to attempt to deliver the best content to my readers yet.

From experimental diets and budgets to new writers and perspectives, Frugaling is going to get a tremendous upgrade. By the year’s end I’d like to reach 500 Twitter followers, 100 Google+ followers, and write another 40-50 articles. Over the next couple months, I’m looking forward to cultivating some new contributors to the site and beginning to expand beyond my sole perspective.

When it comes to my debt, I intend to pay another $2,000 to $3,000 more by year’s end. Get ready NelNet (my loan servicer), some massive payments are coming. Oh, and on top of that, I won’t be needing any student loans next semester! The direction is changing, and I’m ready to catalog this entire experience for you. Please subscribe and share the site! Thank you for your support and encouragement.

Your friend and less broke grad student,

Sam

(See Related: Five Months Of Frugaling: A Reflection)

5 Steps To Attack Your Student Loans

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Here are 5 quick and painless ways to cut your expenses and attack your student loans. These methods have personally helped me to attack my student loan debt and greatly reduce my lifetime interest.

This is a guest post from Syed from The Broke Professional! He runs an up and coming personal finance site for working professionals. Thanks for the article, Syed!

I’m an optometrist. Like many jobs in medicine, it has a strong starting income and potential, especially if you become a successful business owner. As much as I love my job, there is one thing I hated about the process of becoming an eye doctor: student loan debt.

We graduated with a lot of it – about $150,000 in total. Worse? I have colleagues who were in over $200,000 in debt. The story is similar for graduates of medical, dental, pharmacy, and law schools. According to a report by the American Association of Medical Colleges, the median level of debt for graduates in 2013 was $175,000!

The main problem is of course continuously rising tuition prices that probably won’t be decreasing any time soon. There’s just too much money to be made for higher education and the big banks. Just to get a glimpse on the current status of medical school tuition, here is a US News report on the 10 most expensive medical schools. Students can routinely graduate with well over $200,000 in debt!

Rising tuition rates are a highly charged political issue which probably won’t be resolved anytime soon. But there is something we can control, and that is how we decide to attack our student loans. Most lenders put you in 25-year-payoff plans, which is a ludicrously long time that leads to hundreds of thousands of dollars in interest.

Here are 5 quick and painless ways to cut your expenses and attack your student loans. These methods have personally helped me to attack my student loan debt and greatly reduce my lifetime interest:

1. Ditch The Gym Membership

Like most people, I thought getting a gym membership was the responsible and healthy thing to do. With rows and rows of treadmills and dumbbells, getting in shape was an inevitability. After a while, I was no longer enjoying the workouts, and made up any and all excuses not to go to the gym. There was the whole process of getting ready, driving to the gym, finding a parking spot, and searching for the least sweaty machine to use. This was going on for a few months until I decided to sit down and evaluate my gym membership. I realized the workout I enjoyed doing at the gym the most was playing basketball. I cancelled the membership and focused on playing outdoor basketball and running outside, two almost-free activities that I actually have fun doing.

Savings: $80/month

2. Look At Your Wireless Plan

I’ve been with Verizon Wireless for a while now and I’m happy with their service. Calls are rarely dropped and their customer service is pretty good. When they changed to their limited data program, I was defaulted into the 4 GB data tier, mainly because it didn’t really change my wireless bill.  After a few months I decided to check how much data we were using, and it was well under half a GB! I get a WiFi connection both at home and work, so I’m not really using cellular data much. I switched us into the lowest, 1GB-tier plan and haven’t felt a data pinch since. It can pay to check the current status of your wireless plan, and make adjustments accordingly.

Savings: $30/month

3. Run That Car Into The Ground

For most Americans, getting a new car every 3-5 years is normal. It’s almost a rite of passage. Ironically, it’s also one of the worst financial decisions you can make. A car is not an investment, yet people are content with paying tens of thousands of dollars and/or getting a high interest loan that will guarantee a negative return. There are alternatives to driving, such as public transportation, carpools, and biking to work.

Savings: At least $200/month

4.  Shop Around For Auto Insurance

The only thing good about auto insurance companies is their commercials. Most of the auto insurance companies are pretty much the same when it comes to customer service. If you look at reviews online, pretty much all the companies have as many decent reviews as bad ones. Reviews may vary, but generally, customer service is pretty much the same across the board. This means that price is the overriding factor in choosing auto insurance, and in my experience it really is worth it to shop around.

I was with Nationwide for around 4 years. I originally signed up with them because a family friend worked for them. I accepted their rate (a little over $200/month) and was relatively happy with their service (except for the fact they charged a fee to pay by credit card). In any case, I didn’t think much about switching until a few months ago, when I decided to get a quote from GEICO. It was $120 less per month than my current rate. That’s over 50%! It seemed too good to be true, so I got quotes from other companies and was consistently getting much lower rates than my current. I needed to switch and after all the numbers were crunched, I ended up saving a little over $100/month.

Savings:  $100/month

5.  Get A Credit Card That Pays

Optimizing credit card use is a mini-obsession of mine. I enjoy finding ways of getting credit card rewards on stuff I already spend my money on. The most rudimentary rewards cards give 1% cash back, which is $10 back on $1000 worth of purchases.  The key is finding cards with higher rates for certain categories like groceries or gas stations and cards with sign up bonuses for certain levels of spending. The Barclaycard Arrival World Mastercard offers 2% cash back on all purchases and a $400 bonus. This can easily get you a few $100 a month here and there. Plus, it’s nice to get something from the big banks.  You do need to be careful not to increase your spending just to get some rewards, as this would wipe out any benefit from the card.

Savings: $10-$100/month

These 5 easy savings tips produced over $400 in monthly savings. Applying that directly to your highest interest rate student loans can make a world of difference. For example, a student loan balance of $30,000 with a 6% interest rate and $200 monthly payment would take 23 years to pay off with just the minimum payment. Applying that $400 on top of the minimum payment, the loan would now take just 5 years to pay off! Truly astounding numbers and proof that making extra payments can drastically reduce the length of the loan and interest paid.

The Goal: Defeating Student Loan Debt

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Student Loans Defeat Debt
Photo: flickr/sniffen

Since I started this site in May of this year, my student loan debt has continued to rise. This could be seen as a failure, but you’d be missing the bigger picture. Amidst this rise is an effort to change everything and get back to zero debt – fast.

Reducing Student Loans

For starters, I’ve only taken out $3,500 this semester for graduate school. I worked hard last year to secure more hours at my on-campus job, and the monthly paycheck is now helping balance my budget. On top of that, I’ve paid back all of the interest gained on my student loans from the very beginning.

Last week, in a matter of two electronic deposits, I paid off $1,000 of my current debt. This leaves me with $32,700 is student loan debt. Now, while this excludes the complication of having a car loan (and the more than $6,000 liability that brings), I believe my student loans are the biggest concern to tackle.

Where I Was Headed

At 6.8%, my student loans gain a little less than $200 in interest every month. I’m lucky, a portion ($8,500) is subsidized by the government and non-interest bearing. Unfortunately, the government stopped subsidizing graduate students’ educations, and now the vast majority of my loans are rapidly accelerating. Compounded interest is truly frightening – sometimes it keeps me up at night.

If I hadn’t redirected my course, I was looking at $70,000-80,000 in student loan debt by the time I graduated. This burden would cripple me for years. I probably wouldn’t be able to pay it all back until my mid-40s. Two decades of interest and principal payments scared me into changing course.

The Goal: Payback

This semester I adjusted my loans down from the nearly $15,000 I was offered to a scant $3,500. But with recent financial successes with this website and smart financial planning, I may be able to pay the bulk of this debt before I graduate.

Even if I can’t pay everything off, I’m looking forward to beating this number. It provides a clear goal to work towards with a regained hope about my future freedom. I’m sick of this large liability and don’t want to owe the government or big banks.

Ever heard of someone paying all their student loan debt in graduate/professional school? Is it possible?

Living In A Van Down By The School

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Living in a van down by the school. With the debt collector ready to pounce, maybe it's time to get proactive.

Update: Ken Ilgunas, a van dweller and featured in this article, recently published his experiences in a wonderful, detailed book called: Walden on Wheels: On The Open Road from Debt to Freedom.

Seemingly borne from Walden Pond, a new movement that converges minimalism with frugality is upon us. More and more students are choosing to live in cars, vans, and automobiles to skip the rent and save a boatload. In this era of debt and student loan worries, saving $400 to $700 per month looks plenty appetizing, but should you consider it?

“I am convinced, that if all men were to live as simply as I then did, thieving and robbery would be unknown. These take place only in communities where some have got more than is sufficient while others have not enough.”

-Henry David Thoreau

Over the years, I entertained the idea of moving into my car (or buying a van) to avoid the monthly punishment of the rent check. A variety of factors prevented me from ever going through with it. The biggest concern was for my safety. If somebody found out you were living in a van or saw what was inside, they may be tempted to rob the vehicle (whether you’re inside or not). On top of that, it can be legally questionable to park a vehicle and live out of it.

About a year ago, a college friend started sharing on Facebook about his recent decision to move into a van for his senior year. Now, he’s a week away from graduating and saying goodbye to the lifestyle. The crazier piece: He’s not alone (Read the Thor-eauvian van-dwelling experiment in NYTimes). This is a movement towards extreme debt reduction and an attempt to attack the status quo of poverty via education. 

With the debt collector ready to pounce, maybe it’s time to get proactive. College is only getting more expensive, as state budgets are being slashed and the students’ share of tuition becomes more burdensome. But before you go for it, here are five points to consider:

1. Big Savings

No doubt, this is the biggest reason to extricate yourself from the bounds of four walls. Utilities and pointless tchotchkes be gone! As mentioned earlier, this could save you anywhere from about 400 to 700 dollars per month (depending on where you live), plus electricity costs. Even cooking costs plummet, as your options for food diminish. Most van-dwellers have some sort of backpacking and camping experience. Knowing how to use a portable, backpacking stove or gas can is key to cooking warm meals. And while you can cook, most of it will likely be soup.  Get used to it. Most of the furniture we fill our homes with won’t fit. Selling the extras and/or avoiding the purchase can keep more money in your pocket.

Savings: $400+ per month.

2. Little Space

This would obviously depend on the “living quarters” that you choose. I can imagine campers being a relatively easy way to live, but many are choosing cheaper options. For about 1,000 to 2,000 dollars, students can buy a beat up, junker, passenger van. While they may not be reliable or start whenever you like, you can usually fit a bed, chair, food, and clothing inside.

Cost: $1,000-2,000 (one time).

3. Questionable Hygiene

Living in a van down by the school might suggest shower-free weeks and body-odor-ridden clothing, but that doesn’t necessarily have to happen. Campuses tend to have great recreational facilities that have showers. Usually, if you’re a student, you can just swipe your ID and you’re free to shower and prep for the day. Laundry facilities tend to dot the landscape of college towns, and as long as you can transport your laundry to one of them, you’re fine. By using public facilities for showering and cleaning, you’ll be saving money and being green, which would otherwise go to utilities.

Savings: ~$50-60 per month.

4. Mostly Safe

Living in an unguarded shelter is a daunting task, and seems to attract more men than women (perhaps for obvious reasons). In a way, a vehicle is no different from an apartment – someone could break into either one of them and rob you. But a vehicle is open to dangers from police, crooks, and environmental (flooding, storms, etc.) considerations that you generally avoid in formal housing.

Cost: Possibly your sanity.

5. Sometimes Connected

Being connected means far more than having Wi-Fi, Internet, and electricity. Fundamentally, it’s about human connection and the comforts of a social life. By choosing this lifestyle, it might preclude certain friendships and relationships from developing. It’s hard to invite guests over to your van for more than just the voyeuristic spectacle. As for mail, getting a P.O. box or choosing a friend’s address can work. Going to campus or the library can be your perfect way to study and surf the web, as well.

Cost: As low as $14 (for P.O. Box).

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