12 Smart Financial Strategies for People Struggling to Get Started

One of the most powerful methods I use to come up with ideas for articles for The Simple Dollar is to just browse endless personal finance forums to see what people are talking about. What things seem to concern a lot of people? What sorts of insightful questions are being asked?

If I see something interesting, I copy and paste it into an “idea book.” I look at those ideas all the time. They often fill my thoughts and give me some directions for research when I go to the library to see if I can come up with answers that are a mix of my own experiences and the information I can find there.

Anyway, at some point, I pasted the following comment into my “idea book.” It’s one that’s been on my mind ever since I first saw it, but I can’t figure out for the life of me where I originally found it and Google is no help. Wherever it came from, it pointed me toward a lot of thinking about financial issues and my own assumptions:

I want tips for someone who is in their 20s, rents a small apartment in a sketchy neighbourhood, either with a significant other or roommate, who has one car, doesn’t drink already because it’s too expensive, and doesn’t have time or freezer space to make 35 meals ahead of time, because we’re working most of our time just to make rent, or going to school full-time and trying to get top grades so we can even be considered for a scholarship.

This is a fairly accurate description of my situation from the years 1997 to about 2002 or so. During that period, I was chasing a college degree at a full-time rate (a “full-time” student took 12 credits a semester and I usually had around 18-19), working about 25-30 hours a week, and trying to get by on just that money. It was tricky, and to say I lived tightly is an understatement.

Looking back, I see that I did some things incredibly well … and other things perhaps not so well. Here are a bunch of the strategies I used back then that worked really well, along with some things that I know now that would have fit in perfectly back then.

Live in the smallest place you can stand, ideally fairly close to a mass transit stop.

For a while, I lived in a space that was less than 100 square feet. In there I had a loft bed, a mini-refrigerator, a microwave that sat on top of it, a desk with a chair, a beanbag chair to sit in, and a television along the opposite wall. I kept all of my possessions in a single green tub in the corner, which included all of my clothes and a few other items. It was small and uncomfortable, sure, but the reality was that I was rarely at home to do anything more than eat one meal a day, watch a little bit of television, browse the internet (on a laptop… back then, I had an Ethernet cord I had to plug into the side), read a book, and sleep.

It was actually a pretty happy life. It afforded me some real advantages, too. I didn’t have to spend much time at all on maintenance or cleaning or taking care of my stuff. I lived out of my backpack most of the time – I’d wake up most days, assemble a really simple lunch and put it in a bag in my backpack, eat something simple for breakfast, and depart, not returning to the apartment until an hour or two before bed. The rent was really, really cheap – I was actually paying less than $100 a month during this period. I lived close to the city’s bus system, so I didn’t really have any need for a car, which saved even more money.

Look for a tiny, tiny place close to a mass transit stop and live there. You won’t spend much time at home besides sleeping, so you really don’t need more than a small bedroom.

Do most of your shopping at a Goodwill (or other secondhand store) in a nice neighborhood.

For several years, this is exactly how I did my clothes shopping. I went to the nicest Goodwill store that I had reasonable access to, traded in my old clothes, and picked up new ones for a buck or two. It enabled me to get a decent wardrobe refresh at a very, very cheap rate.

I found that when I frequented the Goodwill store that was closest to the nice neighborhoods, they usually had lots and lots of very high-quality stuff from people with a lot of money who were refreshing their own wardrobes, so I took advantage of this.

While my situation largely limited me to one specific Goodwill store, you may have access to lots of such stores. Check out stores like the Salvation Army, Stuff, and any other local stores that might sell secondhand clothes and goods.

I did sometimes look at consignment shops and the like, but I usually found the prices even there to be a little out of my league.

shopping at a thrift store
Photo: David Sorich

Have potluck dinners for social events.

One great way to combine socializing and the need to eat as cheap as possible is to have a potluck dinner. Just invite friends over and have them each bring a dish or a key ingredient of some kind. If necessary, don’t hesitate to be really specific with what you’d like them to bring.

Even while I lived in that tiny apartment that I mentioned earlier, I still pulled off potluck dinners. We’d usually have them in a park shelter house and someone (often me) would just tell everyone one simple item to bring that was picnic appropriate. “Joe, bring a loaf of bread. Jenny, bring some sliced cheese. Ron, bring some ketchup and mustard.” You get the idea. This allowed everyone to bring just $2 or $3 in food but provided enough for everyone to have a fun meal together at a park, which usually turned into a post-meal game with a soccer ball or a frisbee.

Use a slow cooker.

One routine that Sarah and I established later on in life was the use of a slow cooker to prepare meals for us. There’s nothing better than coming home exhausted after a long day of work and other things to find that a meal is already finished and is simply sitting there waiting for you, ready to eat. It also makes the day a bit better, too, knowing that food is slowly cooking for you at home.

A slow cooker makes it quite easy to make very cheap and very convenient meals at home. You just pop in the ingredients before you leave, set it to start cooking at a certain time, and then when you get home, the meal is piping hot and ready to eat.

Even in a situation with a small refrigerator and maybe a tiny freezer, I’d still get a large slow cooker and a bunch of resealable storage containers that you can get in bulk at the grocery store for a few bucks. That way, I can have a great meal in the slow cooker one night, then put leftovers into two or three containers, then have those for dinner the next few nights.

You can make almost anything you can imagine in the slow cooker. Back in the day, my favorite things to make in it were stews and pot roasts; these days, we make things like lasagna and soup most of the time.

Buy bread from bakeries late in the evening.

If you go to a bakery shortly before it closes, you can often buy a ton of bread products for a pittance. They’re happy to sell it to you for pennies on the dollar because their other option is to just throw it out because it will be a bit hard in the morning.

That’s not really a problem for you. If you have bread that’s getting hard, just dip it in water so that the outside is moist and microwave it for 30 seconds or so on high. It will soften the bread almost immediately by pushing that moisture right back into the bread.

Not only that, crusty bread is better for some purposes. I vastly prefer it for things like dipping it in soup or using it in dishes where bread is called for, like French toast.

If you’re a student, join campus organizations.

One of the most useful sources for free food I found as a student was to simply be involved in as many campus organizations as possible. I’d get on their mailing list and watch for emails that indicated that free food would be available and then make those meetings a priority.

I can’t even tell you how many times I scored free meals of pizza or grilled foods while also socializing with like-minded people with whom I shared some sort of an interest.

I joined the clubs that were associated with my majors (yep, I majored in multiple things). I joined every club I could find that seemed even remotely interesting. I got deeply involved in a few of them, but with most of them I just showed up occasionally, usually when there was food involved or something particularly interesting going on.

It provided free entertainment most nights. It provided a great way to meet a lot of people. It also provided a ton of free meals. And if I happened to go to a group meeting and found it boring… I just found another group to try out.

Find free hobbies using Meetup and the library.

If you’re not a student but want a similar experience of dabbling in a lot of interests and sometimes getting some free or very cheap perks, check out Meetup.

Meetup is essentially a bulletin board for clubs and organizations in your local area. I’ve found groups for young professionals, community theater groups, community board game nights, and countless other things via Meetup. It’s a great way to find groups to dabble your toes into and sometimes those groups offer things like free meals or other really nice perks.

Some groups don’t advertise via Meetup, mostly because it can actually be kind of expensive for the group. If you’re looking for more groups, check out your local library, particularly their bulletin board and calendar. You’ll often find a lot of groups there.

Another place to check is your city’s community calendar, which can usually be found on your city’s website. That provides another great list of free activities – often, you’ll find things like free concerts there.

Use the library as your source for movie rentals and books.

Want to watch a movie tonight? Head to the library. Most libraries, particularly in larger towns and cities and particularly in college towns, tend to have a ton of movies available for borrowing from the library.

The same thing goes for books, and books can be even better because the library can get almost any book you want via interlibrary loan. Reading is a spectacular low cost hobby as it expands your knowledge and understanding of the world and costs virtually nothing if you’re getting your books from the library.

Some libraries have other things to check out, such as audiobooks and even tools and other equipment. It’s all free, and it’s well worth your time to give it a look. Libraries are much more than just buildings full of books.

Do your laundry at a friend’s house or a family member’s house.

Doing a load of laundry at a friend’s house is far, far cheaper than doing that same load at a laundromat or at the coin-operated laundry in your apartment building. Just bring along your laundry soap and give your friend a dollar for the usage and you’ll save money.

Some friends will just tell you to not bother to bring the soap and will tell you to keep the soap, but other friends – perhaps those with a tighter money situation than you might assume – will gladly take the dollar and let you use your own soap. Don’t sweat it – in either case, it’s still far cheaper than doing it at the laundromat.

I really enjoyed doing this when I lived in an apartment. I would often visit friends and family members and use their washer and dryer when I was there. I used to do laundry at my grandmother’s house, have a cup of tea with her, and help her with some household chores while my laundry was going. It allowed me to bond with her while also getting some of my clothes clean.

If you’re eligible for social services, use them.

If your income is low enough to qualify you for things like SNAP or for participation in the local food pantry, do it and don’t skip a beat. The purpose of such programs is to help people who are in your exact situation – people who are financially struggling right now but are working to get themselves on a better track. Society wants you to lift yourself up and they offer tools to make that easier so take advantage of that!

Many people won’t take advantage of these services because of a stigma of poverty. You absolutely should not worry about this in the least. The point to remember is that these options are a temporary thing, not a permanent thing. These options are there to ensure that you have food on your table, a roof over your head, and the ability to keep moving forward on your path, nothing more, nothing less.

Yes, for some, it can require you to swallow your pride to accept SNAP benefits or to walk into a food pantry. Swallow that pride. Take advantage of those benefits.

Avoid credit cards like the plague.

Credit cards rely on the assumption that your future self will be earning more income and will easily be able to pay off that bill. That’s a really, really bad assumption, even if your income is really low right now and you think you’ll be earning a lot more soon.

Never, ever act as though it is a given that you will be earning more in the future. That assumption often backfires and it ends up putting a lot of burdens on your future self that they don’t need.

The best thing you can possibly do for your financial future when you’re not earning much money is to avoid credit cards entirely. Just don’t sign up for one. If you’re finding it really hard to make ends meet, use other strategies. Credit cards are a financial trap.

Take every income building opportunity seriously. Very seriously.

If you’re in a position where your finances are very tight, improving that situation needs to be a major focus of your life. It is simply not going to be a pleasant life if you continue to walk that tightrope for the rest of your years.

If you’re in school, take your classes seriously, even if they’re boring. Strive to ask good questions. Study like a madman. Do all of the readings, and take notes. Take notes in the lectures, too. Treat it like a job upon which your life truly depends.

Beyond that, go to the office hours of your professors with at least a good question or two in hand. Your professor will get to know you and this will help with your final grade and with your mastery of the material, and might even open the door to other opportunities.

If you’re not in school and working at a job that doesn’t pay well, go directly to your boss and ask what you would need to do to move into the next job up on the ladder. What exactly is the company looking for in terms of promoting people from within, and how can you achieve those things? The answers you get could be anything, but take them seriously and do those things.

Spend your spare time building skills that might help in your career path, too. If there’s nothing you can clearly be doing, then invest some significant spare time on furthering your education for the job you’d ideally like to have or else spend some significant spare time building a side gig. You should be spending spare time doing something to improve your economic outcome.

Where does that time come from if you’re really busy? That’s up to you, but if you keep doing the same things, you’re going to keep getting the same results. If you want to change your income situation, you need to be doing something different than you’re doing right now.

In the end, there’s one key thing you need to keep in mind: The less money you spend right now and the more time and energy you spend on pointing yourself in the right direction for the future, the better off you’re going to be and the sooner success is going to find you. Giving in to temptations and blowing off classes and opportunities for career advancement because something else is more “fun” might give you a little short-term boost, but it extends the length of time that you’re going to be stuck in this rut.

If you want change, stand up for change. Make changes in your day to day life right now and stick with those changes. They’ll take a while to start having an impact, but it’s like a snowball rolling down a hill. You can start off with a tiny, tiny snowball, but once it starts rolling and you give it time to get going, it’s going to get bigger and bigger and bigger until it changes your life.

Good luck.

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Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.