Chances are you know financial expert Jean Chatzky from her regular Today Show appearances. Starting this month, she’d also like to be known as a teacher: Jean Chatzky’s Money School, a series of online courses, will tackle everyday topics ranging from budgeting to a debt diet. Chatzky priced the class at an affordable $50 so she would attract students from across the financial spectrum.
Chatzky has been living on the cheap for years. Mostly it was out of necessity — when she graduated from the University of Pennsylvania and took her first job in New York City, “I was spending more than I was making after college,” she says, “and I did not want to be in that situation.”
Chatzky grew up in a household in which her father and mother shared equal responsibility in handling finances. Her father was a college professor and her mother a teacher. “I remember my parents alternated the paying of the bills,” Chatzky recalls. “My mom would do it for six months, and when she needed a break, my dad would take over.”
Chatzky is a big believer in saving, though she does think that when you do spend money, it should be done wisely.
“I totally agree with the notion of you get what you pay for,” says Chatzky, describing herself as an “amortizer,” or one who pays off bills. “I look at the things I wear all the time, use all the time and I’m willing to buy good quality that I’ll have for a long time,” she says. For example, she will spend more for good shoes because walking around Manhattan can take its toll on footwear. Later, she’ll have the shoes resoled to stretch their life even more. She’s even had a years-old winter coat relined to extend its life and avoid having to buy a new one, though she did finally get a new coat this winter. “I hadn’t bought one in five years,” she says.
In other aspects of her daily routine, Chatzky practices what she preaches about being smart with money. “I cook and grocery shop and I use a loyalty card; I just saved 50 cents a gallon on gas at Stop and Shop,” she says. The house that Chatzky lives in outside New York City is smaller and less expensive than what she could afford, but she likes it that way. “Nothing makes me feel safer than saving money,” she says.
We asked Chatzky for her top five tips for living on the cheap. Here are her suggestions:
- Track your spending. People who have done this say they are surprised where the money is going.
- Audit the monthly bills. Every six months, look at the cellphone the Internet bills or anything where you’re on a contract, and ask for a new and most recent fabulous discount.
- Buy based on value. Think about amortizing your purchases.
- Save before you spend. If you can’t see your money and you can’t touch it, then you won’t spend it. So put money in savings on a regular basis.
- Use a purchasing pause. If you want to buy something online, put it in the cart, and wait 24 hours. If you’re not still obsessed with it 24 hours later, you didn’t really want it.
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