Budget Advice from a Tech Lusting Entry Level Worker

I am an Early Adopter caught in the salary of an entry level worker. It is an unfortunate state of affairs when you – who subscribes to TechCrunch, an avid reader of Robert Scoble and Guy Kawasaki, the only person you know with a feed aggregator, the only one in her town who seems to know that mobile Web is the new black – must idly watch lesser (informed) men purchase and make scanty use of technology.

It is a sad state indeed. However, I’m not one to sit around and feel sorry for herself. As Jay-Z says, I’m like water. Throw up a blockade and I’ll find a way around it. I have a method for determining which things, whether they are little- or big-ticket items, can or should be purchased.

The List(s)
Now, this is not a glamorous thing, to be sure, but I’m a realist. A comforter that costs 200 dollars has to be saved up for, just like an iPhone, on my budget. Thus, it must be determined how badly I want that comforter or duvet or whatever, and what priority it falls into. After all, we’re working with a limited amount of cash here.

Here’s how it works. I keep a list in my planner, the one thing I’m certain to look at repeatedly throughout the day. At the top it says “Things Holly Wants.” Right now, it looks like this:

King-size comforter: $100
iPod set for car: $25
Tea kettle: $20
Running shoes: $85-100
Domain & hosting: $60
Running shorts: $30
Desk: $150-250
SIGG water bottle: $25

These are fairly practical items for the most part. As I purchase them or concede that I don’t really need or want them and that the desire for an espresso grinder was misguided, then I strike them out. Some of them are smaller ticket items, and the reason I put these on here is not so I can save for them (I’m not that bad off), but so that I don’t blow 20-30 dollars here and there on crap I don’t need or won’t use (I’m not that well off).

Now, for major technology-related purchase, I keep a list called “Things Holly Would Really Like.” It looks like this:

MacBook Pro
iPhone (V2 out in June)
Wireless keyboard/mouse
Dual monitors
Adobe Creative Suite
iPod portable speakers/docking station

Note that nothing on that list is crossed out. Yeah. I’ve had that list for about three months now. It’s going to take some time to save up for those items. Also, with purchases of that size and nature, the exact specs change with the more research I do on them. I also have a terrible case of Tech Lust, so it’s good for me to see these things written on paper so that I can be a little more practical about it.

Buyer Be Wary
I recently read on Ben Overmyer’s blog that he was feeling some peer pressure to purchase an iPod Touch, which he pretty much says he doesn’t need and won’t use. Don’t let your friends pressure you into buying something that they need or want. What’s good for one person is a waste of money for another. I consult with clients for my IT business on electronic purchases and often stair-step them up to what they think they want. For example, one client wants an iPod, but doesn’t use iTunes or have music on her computer. First things first, let’s get you where you can use it. I wanted a MacBook Air until I saw what Guy Kawasaki had to do to his. It’s just not meant for people like me.

The key concept here is that you first determine what you need, what you need it for, and how high a priority it is for you first. Then make your purchase. So often we see something and buy it, then try to justify after the fact. That’s shoddy logic and a waste of your hard-earned money.

One Life, Two Jobs

I recently acquired a second job in addition to my regular 8-5 corporate job. It was meant to accomplish two things: 1. Give me practical experience in the field in which I aim to start a business one day, and 2. Give me a little extra income to put toward savings for a house and investments.

I thought long and hard before deciding to take on a second job. Would I be able to handle the hours out of my social life and other entrepreneurial ventures? What toll would it take on my primary job/career? Were my reasons solid enough to keep me interested and motivated when I got tired and missed the beach?

It’s important to understand that my second job was not driven by the second reason – additional income. In "Rich Woman," Kim Kiyosaki talks about finding your Why, the thing that is going to keep you going when you want to give up, when you want to be a ‘normal’ person instead of spending all of your free time like some kind of freak who has two jobs and two companies to run. Ahem…

My Why in this case is establishing my own coffee bar. I never imagined I could ever do anything so bold as owning my own café, but one fateful encounter brought me to the realization that given the right Why, I am capable of almost anything. And while I feel that my Why is a very strong one, I found myself burnt out and near tears at the end of my second weekend of my new job, screaming in my head that today will be the last day I work here.

Luckily for me, one of the other cafés I had applied to at the same time as Job A called me for an interview. I rushed from the end of my shift to the interview. This new place was heaven. It was exactly what I had wanted in the other job but wasn’t getting. The owner sat in on the interview and got excited as I answered the “What is your defining characteristic or passion?” question promptly and firmly: “Entrepreneurship.”

This was the ideal situation. The owners were starting this shop from scratch after they dreamed about it for a year or two. They were excited to take me under their wings and show me what they did and were doing. The shop also hadn’t opened yet, so I got to see everything from the ground up. I have been trained on all elements of the business, whereas the other job had me working only in one area, and it had nothing to do with coffee. Bonus: They were completely understanding and sensitive to me having a full-time job and the need to have a weekend day off (I could only work 7-hour shifts every weekend day at the other café).

Establish your Why
It is crucial that you have a rock-solid Why before you go into a second job. Ask yourself what you want to accomplish with your new job. Are you trying to gain experience to add to your resume or for a future endeavor? Are you working for additional income? If so, establish a really great Why for how you intend to use the money you make from it. Your free time is worth a lot, and most part-time jobs aren’t going to pay a lot. There has to be a bigger pay-off besides money. If you are saving for a new home or for an investment, then establish this as your Why.

Use your Why when the going gets tough
Even with the new, totally amazing job that I love, love, love, I still get tired. When it’s Saturday midnight and I’m finishing my shift for the second night in a row, I think about my girlfriends and how they are probably out dancing after a day at the beach. As I start down that slippery slope I close my eyes and conjure up images of my own future café. I picture my employees, my couches, me chatting up the regulars. I throw in the added bonus of imagining leaving my café and going home to that house I’m saving up for from the additional income. Once I’m home and in bed, I know I wouldn’t be happy doing it any other way.

Define what you want from your second job
What days and hours do you want to work? Exactly what functions would you like to be serving and what role would you like to be in? Define the ideal situation before you go into it so that you can gauge whether or not the position is going to benefit you. The problem I had with Job A wasn’t that my Why wasn’t strong enough; the problem was that the hours didn’t work for me and I wasn’t learning anything beneficial for my end goal. When I saw Job B, I knew right away it was what I wanted. I didn’t need the first one; I would’ve quit it whether or not the other place I offered me a position.

Don’t over-commit yourself
If I were being realistic when I accepted Job A, I would’ve realized that working Saturdays and Sundays 8-4 on top of my Monday-Friday 8-5 wasn’t going to work out well. By the end of the second week I was exhausted and a crazed mess. All I did for those two weeks was come home from whichever job and try to get up the energy to do laundry, dishes, etc. I wasn’t eating properly, I was skipping workouts, and I was skimping on my personal life big time. I was so unhappy, and everyone could see it. Job B allows me to work shifts on weekday evenings and will schedule me for only one weekend day because they agreed with me when I said if I didn’t have one day off I would “go nuts.”

Don’t waste your precious time, but don’t give up
If you simply are not getting what you want out of your second job, leave it. Your free time is too precious to waste. Just be honest with yourself – don’t leave a second job if it’s benefiting you just because you want to hit the bar more often. Most people go through life sleeping; the ones who are awake live in a constant state of amazement. Don't be content with the status quo - that's sleeping. You’ll know deep down whether or not it’s worth it. I knew Job A was without a doubt a major waste of my spare time. I had such a strong feeling about Job B, however, that it almost felt kismet that it appeared when it did. I think you’ll know, but if you aren't sure, give it a shot and quit if it’s not what you wanted.

If money is your Why…
If your Why is the additional income a second job will generate, I have a few suggestions for making it work. Put all of it toward your goal. It can be tempting to splurge on all those little things you’ve been denied based on your regular salary. Don’t give in. A few weeks into it you’ll lose your drive because you can’t see it adding up.

Set up a separate account for this new income. If possible set up a direct deposit for that paycheck into a savings account instead of your checking account. I use ING for my savings instead of my regular bank because it has a higher interest rate and it’s not as convenient to withdrawal from (I am often tempted when I get low on cash to dip into my savings, so ING’s 2-3 day withdrawal time is key for me).

Finally, put some kind of visual reminder of where that money is going somewhere where you’ll see it everyday. This will not only keeping you motivated, but it will keep you from spending it on a new set of plates you don’t need from Pier 1.

I Get Accountable: A Follow-Up

I took my own advice this week after blogging about accountability partners. After all, that’s what the post was about. I met with a girlfriend Wednesday to catch up and discuss a book I had loaned to her a few weeks ago, Ladies Who Launch. It was the first book I read when I realized I wanted to be an entrepreneur and it eased me into the start-up mindset. So, knowing my friend was feeling uninspired, I loaned it to her. It had such an impact at a pivotal moment in my life, I was anxious to see how it would affect her.

After a great hour-and-a-half long conversation that included brainstorming business ideas, we agreed that it would be nice to do on a regular basis. Earlier that day, at a political rally, I bumped into another one of my girlfriends, an ex-coworker, who in the course of the usual chit-chat off-handedly mentioned that she was thinking of starting her own business. I made a lunch date with her for later in the week, and mentioned the idea of adding her to our weekly meetings to my other friend.

Accountability group accomplished. It’s more than that, though, since we have different interests. We’re all interested in starting our own businesses, but some of us are interested in real estate investing, stocks and inventing. The nice thing is that three people can accomplish more than one can. So, instead of one person trying to research sole proprietorships, limited liability corporations, taxes and bookkeeping, trademarking and copyrighting law, etc., we have three people who can split it up. And where one person has X contacts in her network, our group will multiply that by three.

Besides all of the rational and technical benefits of our group, there is also the more emotional benefit of knowing that there are people who get excited about the same things I do, who are striving toward the lofty goals as well, who are unsatisfied with the status quo and are willing to take action.