Editor’s Note: This is a guest post, written by Logan Allec, from the personal finance blog Money Done Right.
In 2009, I was 21 years old with no assets, over $35,000 of student loan debt, and a wage of $25 an hour as an entry-level staff accountant.
And to top it all off I was living in one of the ten most expensive cities to be a renter in the United States: Los Angeles.
It was a tough situation, but I made do.
In this article, I will tell you how I made rent in Los Angeles on $25 an hour.
1. I had roommates.
Many young people see having roommates as a mark of immaturity.
“That’s what you do in college. Once you have a real job, you start living on your own.”
This notion always confused me.
I knew exactly how much my peers made, and it didn’t make sense to me why they would spend over $2,000 a month for their own apartment.
By having roommates, I was able to save a significant amount of money on rent.
I never paid more than $500 per month!
This is a practice that I maintained even when I was earning triple what I was when I started my career.
By having roommates, not only did I not have to stress about rent, but I was also able to save a lot of money that I was able to invest in passive income sources to make my money work for me.
Tip: If you’re struggling to make rent, share the burden with others. Find a roommate!
2. I worked overtime whenever I could.
As an accountant, I worked a lot of long hours during tax season.
But this wasn’t all bad.
See, in California, you get paid time-and-a-half for daily hours worked beyond 8 hours and double time for daily hours worked beyond 12 hours.
So if I had an 80-hour week, I could rack up an extra $1,500 in weekly overtime and double time hours.
Since the tax seasons occupied about 4 months of the year (mid-February through mid-April and mid-August through mid-October), I could easily rack up over $20,000 of annual overtime and double time wages!
Tip: If you’re finding it tough to pay your rent or get ahead financially, look for overtime opportunities at your job.
3. I had side hustles.
When it wasn’t “busy season” at my job, I found myself with a lot of free time.
So rather than wasting my time, I applied myself to learn how to make money on the side so that I could reach my financial goals quickly.
Here are some side hustles that I had over the years:
- Transcription services for Rev.com
- Helping people with their tax returns
- Blogging (this one stuck and eventually became my full-time career)
I estimate that I was able to bring in an extra $5,000 – $10,000 per year in side hustle income in my early 20s.
This went a long way in covering my rent and paying down my student loans!
Tip: Side hustles can be a great way to bring in extra income, and there are many that you can do online!
4. I budgeted.
When you’re not making a lot of money, you have to know where every penny’s going.
Although I’ve always been naturally frugal, budgeting helped me to see blind spots in my spending and make adjustments accordingly.
There are many free apps out there these days to help you with budgeting, but I started out using my favorite tool: Microsoft Excel.
I meticulously tracked every dollar I made and every expense I had so that I knew exactly how much “extra” money I had each month.
And whatever amount was left over after my rent and other expenses, I invested in the stock market.
Tip: Start a budget and stick to it!
5. I said no to luxury.
Many people think that an extra $100 payment a month won’t set them back much.
What they don’t realize is that an extra $100 a month is $1,200 a year, $6,000 over 5 years, and $12,000 over 10 years.
It’s actually quite a lot!
Realizing this fact early on, I said “no” to luxury whenever I could.
Here are some examples.
I took the bus.
I did not have a car when I started working, and I was perfectly OK with that.
What’s more, my workplace actually subsidized a commuter pass for me, making the cost of transportation even cheaper than it would have been had I owned a car.
Eventually I bought a Honda Civic, and it’s the only car I’ve ever owned.
And now, years later, I’m once again carless.
My Civic was totaled in an automobile accident last April.
But guess what? Because I work from home, I don’t really need one, so I’m in no hurry to buy a replacement!
I rarely ate out.
When I was making $25 an hour, I looked at a $25 restaurant meal and thought, “Hmm…is this food and experience really worth an hour of my time?”
More often than not, I said, “no.”
One time, I even brought my own meat into a restaurant, asked for some hot water, and cooked it right there to avoid paying any money!
That’s probably a little extreme, but when you don’t make a lot and live in an expensive city, you have to get creative!
I didn’t buy the latest gadgets.
For years my friends harped on me for not owning a smartphone.
I eventually caved in and bought one years after I could have reasonably afforded one, but even to this day, I am reluctant to purchase the “next big thing.”
See, here’s the thing about the latest gadgets: they only make you happy for a very short amount of time.
After the initial euphoria of owning the newest device on the market wears off, it stops bringing you the pleasure it once did.
Tip: Don’t automatically assume that you need to purchase the latest technology. Think about the ways that the money you spend could be used for other things, such as for rent or investing!
How Are You Making Rent In Your City?
Whether you live in an expensive city like San Francisco ou New York or you live in an affordable city like Toledo ou Indianapolis, you’ve probably had to deal with the stress of making rent every month.
Let me know in the comments how you’re getting by!
Contenu associé
