Smart Splurges and Saves

A 29-year-old nonprofit lawyer shares his secrets, and they involve peanut butter.

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For research on a story on personal finance decisions for 20-somethings, I've been speaking with young professionals about how they manage to meet all their financial obligations—and desires—on relatively low salaries. One of them, Ben, 29, who earns $51,000 a year as a lawyer for a nonprofit in Washington, D.C., says his approach involves skipping big-ticket items but not giving up his adventurous travels. (He asked that I not use his last name since he is sharing so much personal financial information.) Here's what he does to save money without giving up what's important to him:

To save:

• He drives a '93 Honda Accord with 200,000 miles on it. He paid it off over nine years ago.

• He pays $1,050 a month for a small studio apartment, which he splits with his girlfriend.

• He paid for his in-state law school himself with loans and now owes $60,000, which is growing at a very low interest rate.

• He invests about $200 a month in an online stock trading account, in a combination of stocks and mutual funds that he researches himself.

• He deducts $200 a month to save for retirement, and his employer will begin contributing an additional 9 percent of his salary into his retirement account after he's been at the organization for two years. (It will bump up that percentage to 10 percent if he contributes at least 3 percent a year, which he plans to do.)

• He buys used furniture he finds on craigslist or from neighbors upgrading their own places.

• He earns frequent-flier miles on his credit cards (which he pays off each month to avoid paying interest) to buy at least one of his airplane tickets each year.

• He skips the coffee shop. Instead, he buys a six-pack of bagels and a box of tea each week, which he says saves him about $95 a month.

To splurge:

• He went to Panama for 10 days in August for a little over $2,000 and to Mexico for four days in January for around $1,000.

• He spends about $600 a month in food and drink, but he has a secret tip: He eats a peanut butter and banana sandwich before meeting up with friends for dinner and drinks. Otherwise, he says, he would probably drop $30 just to fill his stomach. Instead, he goes for the cheaper appetizers or soup.