Corps Finances: Spend Readjustment Allowance Wisely

$6K seems like a lot of money when you’ve been earning $1K —per year.

Peace Corps Volunteers take home about $6,000 at the end of their term — broken into two payments. You may travel with that money, and take an around-the-world kind of flight path home. You earned the money and you deserve to have fun with it if you want.

But if you are coming straight back to the States, haven’t gotten a job lined up, and want to use the money more strategically, consider:

  1. The cost of an apartment in the place where you’d like to live.  Triple the monthly rent to estimate how much you’ll have to plunk down for deposit, plus first and last months’s rent — that’s typically what you’ll owe your landlord when you sign the lease if you are going to live alone. If you don’t have a car (and I don’t recommend buying one till you have to, to save money), remember that rent prices tend to be higher on bus and subway lines. (If your rent is $700, plan to use $2100 to get yourself into an apartment. That’s a third of your readjustment allowance—just for the keys to the apartment. Then $700/month thereafter.)
  2. Also consider monthly utilities — which will depend partly on your tastes and the time of year. ($100/month.)
  3. New clothes. The clothes you took with you into Peace Corps may be pretty threadbare by now (and you may have abandoned them overseas). If you disagree, please ask a trusted friend to give you their opinion — sometimes a person can wear an item too long to notice the holes and nubs themselves. Invest in some good interview outfits (think plain and conservative so you can wear them in a variety settings depending on how you accessorize). You may feel rich — but it’s best not to overspend. If you have clothes in storage see if they still fit — it may be more cost effective to have some items “taken in” rather that buy all-new. Although, some basic fashion trends may have changed in the past two years. ($200, if you buy a few good pieces from discount and consignment stores.)
  4. Groceries and transportation costs for the duration of your job search. How much do you spend each month on groceries? Eating out? (You may need to do it once or twice to remember.) If you have a car, how much will you spend for a tune up initially, and gas? If you don’t have a car, how much will you spend on mass transit? ($500 during the first month.)
  5. Finally, think about the things you need to make your job search possible: a cell phone? A laptop? If you have to buy these things, include them in your budget. ($1300, plus monthly internet and phone charges, about $100/month.)
  6. Need new glasses and/or contact lenses? ($200)
  7. Paying for Corps Care—Peace Corps’ health insurance extension? It’s free your first month, and $140 thereafter.
  8. Student loans — deferring was fun while it lasted. (You will also find joy in paying the loan off, but that is for another blog post.) ($300/month)

Taken together, you’ve spent $4600 — just for your first month home and a few essentials. After you’ve taken care of the priorities, save as much as you can: you just don’t know how long the job search may last.

As you can tell, you don’t have a lot of room for shopping sprees, but at least you won’t have to go into debt. If you think that spending for extras on a credit card is a better answer — oh, you’ll be able to pay it off just as soon as you get that job — remember that we are (officially) in a recession, unemployment is high, and you may not want to play Russian roulette with your credit health. Spend what you can pay off right away and you’ll be in good shape.

For ideas about living on the cheap, check out my post on financial management for corps members. Also check out the book and the National Endowment for Financial Education (NEFE) partnered on: Making a Difference: A Guide to Personal Profit in a Nonprofit World.

This blog post has been adapted from a section of the forthcoming Service Corps Companion to the Guide to Nonprofit Careers, due out this coming spring from

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Corps Finances: Personal Financial Management for the Service Corps Member

Earning a stipend doesn’t mean suffering financially

These rocky financial times call everyone’s attention to government spending, and cause those in public service to wonder how the nonprofit sector will survive the turmoil on Wall Street — which affects the ability of foundations and donors to contribute financially.

Scobay (CreativeCommons, Flickr)

Scobay (CreativeCommons, Flickr)

The mess we are in also calls us to pay more heed to our own financial circumstances.

What does that look like for a member or stipended volunteer in a service corps?

Depending on the program, and on a member’s spending needs, a service corps stipend can be challenging to live on.

For service corps members facing challenges, the term of service is a great time to get schooled in personal financial management. If you are working with clients who have low incomes, the lessons you learn can also benefit them.

Do no harm

While most financial advice will tell you how to save and invest wisely, Corps members may not have any extra money to save. The priority for you, then, is to do no harm:

1. Get Your credit report free annually, know your FICO score (which doesn’t come with your free annual credit report), and learn how to protect and increase your score.

2. Track your money—all your money. Save receipts or take notes for a week. It helps to see it in black and white. That way you can spend according to priority not habit, and find cheaper alternatives.

Thinkpanama, Creative Commons, Flickr

Thinkpanama, Creative Commons, Flickr

For example, you might spend a lot on buying coffee at coffee shops, where you could make coffee at home or the office. That change would allow you to choose organic produce if that’s important to you.

A big expense that can build up unexpectedly are ATM fees. If you withdraw money from another bank’s automated teller machine, not only that bank but your own bank can deduct fees from your account. Imagine losing $4 every time you withdraw $20. And you may not see the fees till you get your monthly statement.

As part of tracking your money, list withdrawals and deposits in an account ledger like the kind you get for free with your bank account. Overdrawing your account can cost a lot of money.

3. Make a budget. Allow yourself to spend a maximum amount on a certain category each week or pay period. Some people like to put cash in envelopes at the start of the week, and when the cash runs out, so does the spending.

One envelope may be for food, and could include groceries and eating out. Another could be for gas, a third for entertainment, etc. You don’t need a fancy worksheet, all you need is to list your living expenses (rent, groceries, childcare, credit card, utilities, transportation), their due dates and their monthly costs. Make adjustments where you see waste as mentioned in Tip #2.

4. Be responsible with credit cards. Avoid running up credit card debt, as well as carrying a credit card balance from month to month.

The Truth About, Creative Commons, Flickr

The Truth About, Creative Commons, Flickr

Paying just the minimum payment fee on your monthly statement or paying the fee late can incur costly fees, and damage your credit score.

Also be careful about the due date in your monthly credit card statement. Those companies switch the date around like a fickle fiance, and they win if you pay too late.

If you are serving in Peace Corps or another international service program and are taking credit card debt with you, you can do a few things to help yourself out: sell off your car, books, and other valuables to pay off as much as you can before you go. If you won’t have enough cash to pay off your credit card that way, you can instead use the money to pay the minimum fee (or a set amount above that fee) monthly through an automatic bill pay that you set up through your checking account at home. It’s a very expensive solution.

Choose a credit card wisely, and understand the true cost of using credit cards. Use this calculator to figure out how much you really owe. Check out Frontline’s The Secret History of the Credit Card for understanding the fine print of your credit card agreement and more.

5. Live simply. Here are some of the biggies: live with roommates; borrow books and movies from the library; ride a bike whenever possible — going car free saves a lot of money; cook at home and have friends over for pot-luck dinners; forgo internet access and cable television at home; shop at thrift stores and swap clothes with friends; cut down on expensive drinks  like beer; reuse, reduce, recycle.

Richard Masoner, Creative Commons, Flickr

Richard Masoner, Creative Commons, Flickr

6. If at all possible, save. Similarly, avoid spending your savings you came into the Corps with. Even $5 a week adds up.

7. Know your financial goals. In the next five years do you want to enroll in school, buy a house, buy a car, pay down student loans, start a family, retire?

You may not be able to put a lot of money towards these investments this year, but can educate yourself about the financial needs you will have. Knowing what lies ahead for you may motivate you to watch your pennies now. You can also take workshops on these topics as you see them offered in your community. Sometimes they come with free pizza!


The National Endowment for Financial Education (NEFE) offers an array of resources to help people think about money strategically, begin with Smart With Money’s Taking the First Step. Also check out this resource on Life Events and Financial Decisions.

Partnering with, NEFE published Making a Difference: A Guide to Personal Profit in a Nonprofit World especially for young people looking at a career in the nonprofit sector.

Service corps members are often eligible for programs that benefit all people with low incomes (such as housing for people with low incomes, Food Assistance and individual development accounts).

Another resource to check out regularly is Michelle Singletary’s Color of Money column in the Washington Post and NPR podcast.

Finally, keep an eye on the blogs in the Money Life Network.

For prospective corps members

If you haven’t yet joined a corps, have confidence that hundreds of thousands of people have participated in service corps and made it financially.

That said, do take a hard look at the numbers and make sure you can afford to live on a stipend. Take into consideration student loans (qualified loans can be deferred or put into forbearance during the term), child care expenses, rent/mortgage payments, car payments, etc. Service Corps programs, local nonprofits and government agencies may be able to offer help with certain expenses, so be sure to ask. It’s not impossible to thrive on the stipend, but a term of service isn’t worth ruining your credit history or incurring deep debt.

Also note that not all Corps are the same in terms of stipends. Peace Corps Volunteers don’t get rich, but typically earn enough to cover all their expenses (including housing, utilities, food, even medical expenses are taken care of), and sock a bit away for extras. AmeriCorps*VISTAs on the other hand, who work to end poverty, earn 105 percent of whatever is poverty-level income in their area—which can be a struggle!—and aren’t allowed to take on side jobs. Teach For America Corps members earn the starting teacher’s salary for their school district, while AmeriCorps*NCCC members earn $400 a month but have all their basic needs taken care of for their ten-month term. The terms of every program are different, so be sure to ask.

Do you know of other personal finance tips, or resources, useful to service Corps members? Are you a service Corps member or Alum? What have you done to be successful financial through your term?