AJ Kumar served two years in the Peace Corps as a School and Community Resources Volunteer in the Northern Cape, South Africa. He is currently a Ph.d Candidate in Applied Physics at Harvard University.
What specific guidance on financial management did you get from the Peace Corps?
The Peace Corps didn’t give me specific guidance, they just made us aware of how much money we would be given, and this forced you to think about how to live within your means.
How tough was it to live within your means?
This varied by volunteer. We were paid around $300/month, and I had it a little easier than some because I was placed in a very rural area. Being in such a remote area changed my perspective on how to spend my money. For example, it cost around 10% of my monthly salary to travel to the nearest town to by groceries. This meant that I had to limit myself to one trip a month. Volunteers who lived closer to towns had more opportunities to spend money, and some ran out of money.
What happens when you run out of money before your paycheck?
Some tried to ask for advances on the next month’s salary. Others hunkered down and tried to eke out the remainder of their supplies. It forced me to do a lot of planning ahead. I worked with committees that met in Pretoria. These trips cost me half my monthly salary. I would eventually be reimbursed by the Peace Corps, but the lag between the expenditure and my subsequent reimbursement meant I had to be extra vigilant with my cashflow management.
How did the Peace Corps impact the way you manage your money?
Most people think of grad school as a poverty-level experience, but for me, it’s a huge jump in salary! I have fewer needs than college, and am able to save a substantial amount for the future. In Boston, it’s easy to burn through cash, but I’ve basically reduced my needs to food, transport and housing. I don’t buy stuff that often any more. Peace Corps helped me clarify what I do want to spend money on. After spending two years on a rickety bed in a tin roof shack, I invested in a nice mattress for myself. I save by cooking and not going out too much – I prefer to spend money on travel.
Any money management tips for folks who are entering service programs like Peace Corps?
1. Set yourself a spending limit. Always make sure you have something going into the bank at the end of the month. In the Peace Corps, there’s no way to get extra money without drawing on savings or your parents.
2. Track your behavior. Software programs like Mint take the nerdiness out of it. If you’re not monitoring yourself, you can’t course-correct.
3. Think about needs vs. wants. Do you use your monthly cable subscription? Do you you need the branded bag?