12.06.2006

This is why I scrimp and save

I don't go to the movies, I don't buy movies and music, and I don't eat out much unless I'm out with friends, so shopping is my entertainment. Still, I only buy cheap stuff once in a while. Even though I have enough money in my bank account for bigger purchases, I never do it. That's because life is unpredictable, and this is one of those times where I'm glad I'm a tightwad.

Throughout law school, I've had a fair share of misfortune, especially around Finals. Health problems took a huge bite out of my account balance, and then there's car trouble. Without fail, car problems always occurred around Finals. For the past few years, the problems were fairly minor and relatively inexpensive to fix. Yesterday, however, my car's transmission decided to blow out. I was lucky that the car didn't die until it got home. My dad tried to coax the car back to the family home so that he can fix it himself, but the car said "you can't make me." Towing it back home would have been expensive, and it would have taken a long time and lots of effort for my dad to fix it. After weighing the costs and benefits, we decided to have it towed to a local shop.

Since I have to put aside money for my bar courses, I can't afford to have the repairs done. Fortunately, my dad said he would pay for all it, even though I offered to pay half. As much as I like to be financially independent and not rely on anyone, as I've done for my undergrad years, sometimes I just have to accept help. Obviously I don't have enough money to deal with this crisis, but I did save up enough to make Christmas special for him this year.

Looking back, one mistake I made this year is underborrowing for school. I know that it's a good idea to borrow as little as you can, but it's good to borrow enough for an emergency budget. I didn't expect major car trouble like this, as my car ran pretty well and my dad can fix the problems, but since I already owe so much money, a couple thousand more of debt wouldn't have made that much of a difference. It's better to borrow a little more rather than less, but of course, don't borrow more than what you actually need (including that emergency fund).

If you're a student who is in a similar situation, see if can borrow more for the next semester to cover for these unexpected situations. One good thing about borrowing this late is that you won't be accruing interest for times when you didn't need to use that money. If you have a work-study allotment that you ended up not using, maybe it's possible to convert it into a loan. Whether and how you can do these things may vary by school. Sometimes schools don't allow you to borrow more if you've already maxed out the limit they've set for your financial aid package; since I underborrowed, I haven't exceeded my limit. That said, don't borrow more money if you can avoid it. This should be a recourse strictly for times when big and bad things happen due to no fault of your own. The rates are way better than a non-educational loan, or worse yet, a credit card debt.

7 comments:

enna said...

Just curious: if you don't buy music, do you pirate it? Or do you just listen to radio?

Sales Rack Raider said...

Most of the time I listen to the radio. There are some pretty good public radio stations that spin great indie music (I'm sick of the Top 40 stations out there). My friends and family have a lot of CDs, so I borrow them once in a while. People also give me CD's as gifts.

ambika said...

Wow, I was caught in almost exactly the same position my final year of university. I always borrowed the smallest amount I could possibly manage (just enough to pay tuition since my two jobs pretty much covered my bills.) Then one of my jobs became work study (without a lot of warning), which I wasn't eligible for, and I had to go thru this whole lengthy process with the finance office to get a greater amount than what I'd initially requested. Head. Ache.

Stacie said...

I listen to the college radio station in my town. There is plenty of variety and I have learned about some music that I might not have heard of otherwise. Somtimes is is crappy, but a lot of the time it is pretty good. Also, if you have DSL or cable internet you can listen to a lot of great streaming stuff online for free. Also, my sister and rip a lot of CDs onto our mom's computer and then make mix CDs of a lot of it for eachother. It is a great way to save money and if you get sick of it you can just make another one. They also make great gifts. If anyone objects to that, I say we have already paid for the music so we can do what we want with it. I don't think much about the ethical crap people go through in their heads over stuff like that, so it works for me.

S. said...

I truly admire your practicality and financial sensibility.

Sales Rack Raider said...

Thank you so much, S.! I see it as a survival tactic.

Stacie--I love listening to local NPR stations, which happen to be run by a couple of community colleges. The DJ's have great tastes--they play a lot of cool stuff long before they make it big on the "regular" pop/rock stations.

Mixed CDs--ah yes. I get some from my bro. He's got great and eclectic tastes and he can afford to buy a lot of CD's.

Anonymous said...

Wow, this same situation just happened to me, my transmission went out on my Honda Accord to the tune of $1200 for a used transmission. I decided to get the transmission as oppose to having a $300 a month car note for 48 months. It was also unexpected so I won't be able to get the repairs done until next month. Fortunately for me I have a second older car that kind of like a "hoopie" it gets in around in emergencies, so I'm not without wheel. Which buys me time to save up for the transmission work. I like that fact that you are very thifty and you understand how important it is to save.