Making Ends Meet

I’m not a wealthy person, and given my college major and career plans, I don’t think I’m going to be super wealthy in the future. That’s okay with me, and I plan to live pretty frugally and carefully to ensure that I can be comfortable and as financially secure as possible for as long as I live. But I know that financial problems aren’t always predictable, and I’m a little concerned that my lower income will make me more prone to financial issues. Experts, can you give me some advice for avoiding financial problems and for overcoming them if and when they arise?

It is certainly easier to make ends meet on higher salaries, and there are those whose limited income makes things nearly impossible. But, assuming you make enough to get by, there’s no reason why you shouldn’t be able to create a financial plan that helps you feel secure.

The easiest way to overcome financial problems is, of course, by not running into them in the first place. You have the right idea here, and we have the advice to go with it!

When you graduate, you’ll be faced with new expenses and new pressures. Your goal, above all else, should be to live within your means. This is easier said than done, because you will find it easy to secure a credit card and start buying things. Strive to avoid short-term debt like credit card debt. Pay off your bill in full each month and don’t buy more than you need. Remember that your parents and their friends spent a lifetime building their lifestyle; you don’t need to have your entire life together right out of the gate. Don’t be afraid to carry over some old college spending habits. Another year or two of living cheaply won’t kill you, and it will afford you the chance to do something very important: save money!

Save up an emergency fund to keep in a checking account, and put your savings beyond that in higher-interest spots like savings accounts and investments. Take advantage of retirement accounts, and get insurance to protect you from some of the big, sudden expenses that can derail even a careful financial life.

Of course, nothing is foolproof. What should you do if your financial situation becomes dire?

For starters, double down on what you already know. Avoid short-term debt, which can be predatory when it comes to desperate folks with bad credit. Go on austerity. Sell diamonds and other valuables for cash--everything from engagement rings to more common jewelry has a worth as an asset, and if you have some valuables you are willing to part with, you can avoid taking on more debt by turning to diamond buyers.

If you’re in really serious trouble, your best bet may be to turn to an expert. Financial pros can help you if you think you can still avoid bankruptcy (avoid the programs that seem too good to be true, though). And an attorney can be your best friend in a situation like this: bankruptcy can help you discharge debt and even halt foreclosure.

With luck, though, you’ll never need to handle a serious financial crunch. Smart habits and continued saving will keep you prepared for whatever comes your way. Good luck, and save smart!

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” -- Robert Kiyosaki

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