How Real Women Stretch $25,000 Salaries

Real Women on Entry-Level Budgets Share Their Budgeting Secrets
by Jasmine Williams
Photos Joanne Pio | March 18, 2016
The phrase "living on a budget" should be all too familiar to many of us in the early stages of our careers. For some, living on a budget comes naturally, while for others...
not so much. So, to help those who may need a bit of guidance (no shame there), I've interviewed six real women living on a budget, friends and acquaintances who have learned the art of stretching their entry level paychecks.

Before you New Yorkers and Angelenos object, we fully acknowledge entry-level wages don't amount to $25,000 in many places, and that the cost of living is higher in big cities. But these tips, from women who do live on salaries of around $25-$30k, will get you started regardless of where and who you are (and how much your rent varies from those of us living in the Midwest, Deep South, or even abroad).
Below you'll find we've taken the best advice from twelve separate interviews from women in various industries, plus some takeaway advice we can all follow.

KIA, COMPLIANCE ASSOCIATE

How She Stretches

"The account where I save doesn’t have an ATM card attached, and I budget in advance for expensive nights out such as going to dinner."

Her Advice

"Separate what you save from what you spend, and when you get to a certain amount, put it somewhere where it’s even harder to touch, such as a fixed account or an investment. Oh, always have a rainy day account too, for unforeseen expenses. Every so often, put a little something in it to preserve some form of liquidity [easy access to cash]. Having that will prevent you from touching your savings."

LISA, JUNIOR ADMINISTRATOR

How She Stretches

"I do more activities at home to maintain my entertainment budget. Buy things cheaply when possible but don't sacrifice quality items you need."

Her Advice

"I would say set priorities and think of what is important to you. You don’t have to skimp on enjoying life, just set a minimum amount of time for entertainment. Reduce the amount of time you spend eating out. Always cover the essential bills first. Things like lunch and entertainment are negotiable because there are alternatives. Try to stick to the plan you set. If you budget $100 in one area and $50 in the next and you spend a little more in one area, make a trade-off."

LAKEISHA, POLICY AND RESEARCH OFFICER

How She Stretches

"I buy sufficient groceries (breakfast/lunch/snacks) to last until the next pay to control how much I spend every day. And rather than tackling all large financial obligations at once, I plan ahead to tackle one major item per month, such as car insurance, car repairs, etc."

Her Advice

"Consistency is key! As much as you can, stick to your budget to avoid overspending. Having a budget is like having a goal and sticking to your budget can be considered an accomplishment! After all, what’s the point of having a budget if you’re not going to stick to it? Also, if you need to withdraw more funds than you anticipated, always remember to secure something for those rainy days. It’s also important to think about the opportunity cost of using your money (If you decide to spend carelessly on something, think about how much you could have saved and how you could have put that money to better use).

Most importantly, budgeting can only be successful if one is disciplined—regardless of how frequently you may use an expense sheet or your target savings amount. Developing a habit of discipline will allow you to save consistently and I guarantee, you will feel really good about it in the end!"

CHRISTINA, PROJECT ASSISTANT

How She Stretches

"When I first started working and making money, I was determined to learn how to save and build up a "reserve" and that allows me to stretch my money.  Certain months I'll have more expenses than usual and I wouldn't be able to cover with just my monthly salary alone. So, I sometimes dip into what I've saved to cover me. The key is that when I get paid again, I put back what I took out in addition to that current month's savings. So basically, my salary stretches by borrowing from myself, but always paying myself back."

Her Advice

"For short-term salary stretching, I don’t have anything novel. Just make a very detailed budget. That way you can allot money and gauge your spending. At the beginning of the month calculate expenses, etc. and really stick to it.

In terms of literal ways to make your salary stretch? I’d definitely say eat out less. For me, eating out is my weakness, and I know a lot of people would say the same. As simple as buying an inexpensive fast food meal once a day can add up to hundreds (of dollars) over the course of the month.

For long-term salary stretching, I’d say that as hard as it may be, try to put aside a small portion of your salary every pay period and don’t touch it! Even if it’s just $20 a pay period over 12 months, that’s $240 that you don’t have to come up with to, let’s say, buy Christmas gifts or something, you know?"

JEWEL, MENTOR AT A NON-PROFIT FOR AT-RISK YOUTH

How She Stretches

"I live by my budget that I make every month. I lay out my expected spending based on the previous months and what’s coming up."

Her Advice

"It’s kind of difficult to advise people without first acknowledging that everyone’s situation is different. I personally try to live on a ‘need-basis’ instead of a ‘want-basis’, and consider that every decision either takes me a step closer or a step away from my money goals.

I really think you have to plan ahead before you spend; so that’s the budgeting, meal prepping at the beginning of the week, maybe foregoing the extras for a bit and yeah, basically meeting your needs before your wants. I take financial advice from a number of people but one of them is Dave Ramsey, and one of his rules is pay yourself first. This basically means you have to take care of your needs first before anything else."

JONELLE, PAYMENTS COORDINATOR AT AN INSURANCE FIRM

How She Stretches

"Whenever I'm paid, I have autopayments set up for my mutual fund and company savings plan. After that, I pay all my monthly bills online (it helps me keep better records). Finally, I fill my car with gas, and set a budget for food and any leisure activities like weekend outings." 

Her Advice

"My advice to persons that are newly employed would be to create a budget before spending your pay. Organizing this helps you to allocate your funds properly and it helps you to keep records of where your money goes each month. Also, find creative ways to save money such as planning your outings or cooking at home."

THE TAKEAWAYS

  • Save! No matter how little you think you may have, it adds up (between 10-25% of salary, if possible)
  • Cook instead of buying food every day (try to prep your meals for the week on a Sunday)
  • Keep savings in an account that you won’t use often or separate what you save from what you spend (when the savings account balance gets to a certain amount, put it somewhere where it’s even harder to touch, such as a fixed account or an investment product) 
  • Do more activities at home (instead of a Girls Night Out, plan a Girls Night In)
  • Set priorities and determine what is important to you- “Say no now so that you can say yes later”
  • Cover the essential bills first; things like buying lunch and entertainment are negotiable because there are alternatives (previously listed)
  • Curb impulse spending; plan ahead before you spend and always have a rainy day account
  • Develop a habit of discipline and have an end- goal in mind
  • Be consistent as much as possible; set a target for what you would like to spend each month on each expense so that way you won’t overspend
  • Carpool with friends to work
  • Pay yourself back if you dip into your savings account
Was this advice helpful? Do you have any pointers that you can add? Let us know in the comments below!