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After graduating with my Masters degree in 2016, I spent majority of the next year and a half living paycheck to paycheck, or worse, going into even deeper debt.
I had to basically live off of my credit cards for a couple of months in 2017. It was definitely a very challenging year for me overall, and struggling financially escalated everything else.
I’m grateful to say that I’ve always known that I’ll have a place to live, food to eat, and clothes to wear. However, I know how stressful finances can be. I had trouble sleeping many nights and I constantly felt stressed.
I got a slightly better paying job, which is when I finally (slowly) dug myself out of the paycheck to paycheck lifestyle. It was still a struggle, because I could only save a few bucks a month. $20 here, $10 there, etc., so that acted as my driving force to make some lifestyle changes.
I now always have at least a $1000 emergency fund, plus I keep another couple extra thousand dollars in a high-yield savings account just in case.
I am able to contribute to sinking funds each month (gifts, car maintenance, and medical/dental), I have ZERO credit card debt, and I always put extra toward my debt.
The tips I offer below are nothing new or fancy. They are very practical.
The important part comes down to you, your self-discipline, and behavior.
Wherever you currently stand financially, you can make a better life for yourself.
Which leads me to my first tip…
Change your money mindset
How do you feel about money?
Depending on how you were raised or how you have handled money, you may see money as a negative thing. You may be afraid to even talk about it.
Well, I want to let you know that you can LOVE money and WANT money and still be a good person.
Don’t let the past, your parents, your peers, or your current situation cause you to have a horrible relationship with your finances.
Money, saving, budgeting, investing, paying off debt, etc. are nothing to be afraid of.
Stop limiting what you can earn and achieve in your lifetime by thinking negative thoughts that involve money.
Do you ever say, “I can’t afford that.”
Or “Must be nice,” when you see someone driving a nice car or taking a vacation?
What about, “I’m broke?”
Step 1 is to immediately STOP saying those things. You are literally speaking that nonsense into the universe and you will continue to suffer financially if you think like that.
Learn to re-phrase those things.
Instead of, “I can’t afford that,” you can say, “That’s not in my budget right now, but I can start saving for it.”
Instead of, “Must be nice,” try thinking, “That is my dream car and one day I’ll be able to purchase it.”
Even if you don’t believe those statements right now, you have to adjust your thoughts and train your brain and subconscious to think positively about money.
Become aware of where you stand financially
First of all, how much money are you making?
If you don’t receive a stable paycheck, what do you make on average each month?
Next, how much debt do you have? Knowing your financial situation is key to beginning your debt free journey and improving your finances overall.
Spend some time adding up all your debt.
-What you owe money for (student loans, a car, credit cards, etc.)
-How much you owe for each (total debt)
-Who you owe (lenders (Navient, CapitalOne, etc.))
-Your interest rate for EACH loan
-Your minimum payment for each loan
Get familiar with all of the lender’s websites. Write down/save your login and password and start getting into the habit of checking your bank account and loan accounts frequently, at least once a month.
Personally, I check my bank account just about EVERY single day. I login to my other accounts at least once a week, but usually a few times a week.
If you don’t have debt, great! You have a very high chance of getting ahead.
If you are upside down on loans or behind on bills, we have to straighten that out first.
To be honest, I have never missed a payment, therefore I have never been behind on a bill.
However, I have done some research on things you can do, PLUS the tips that follow will still help you and still apply to you.
- Your necessities come first
If you are behind on a credit card payment, car payment, or other loan, so be it. However, you need to make your home, electricity, water, gas, and food a priority. You don’t want to lose any of those. Use the tips below to catch up there first if necessary.
- Call your creditors
It may help to build a relationship with them. Call them and let them know what is going on. Let them know what you can do/pay right now and see if you can come up with a plan. Try to see if you can remove any late fees or penalties. Be kind.
Remember, this was YOUR responsibility, just take ownership of it.
Let’s say you owe $5,000 on a medical bill and you are behind on it. Spend the next few weeks saving like crazy. Call the company and offer to pay $2,500 in cash up front if they eliminate the remainder. You’ll want to do more research on this idea, but I’m sure it will work in many cases. Be sure to get everything documented.
- See if you qualify for discounts
This will only apply for certain bills. A couple of years ago I received a $250+ unexpected medical bill. I was barely making $20K a year and I had already paid over $200 for that same visit. After some phone calls and research, I found out that I could fill out a form and submit tax documents to prove that my income was in the poverty level. They reduced my bill over 90%!
Go extreme for a month or 2
“Extreme” sounds dramatic, but I wanted to share something interesting.
About 80% of Americans reported that they live paycheck to paycheck in 2017. However, whenever I go to the mall, the movies, or any other event that typically involves spending money….it is packed (every time).
So either most of the individuals in those places fall into the 20% who don’t live paycheck to paycheck, or many of them are being irresponsible.
I understand it’s important to socialize or treat yourself sometimes, but isn’t it more important to try to save your money and become financially secure? A paycheck to paycheck lifestyle is a very risky way to live.
For the next month or two, I challenge you to ONLY attend free events, cook all of your meals at home, and cut all unnecessary spending.
You need to avoid going further into debt at all costs.
Extreme will mean different things for different people.
For one individual that may mean canceling all subscription services and budgeting only $20 a week on groceries.
For another, that may be downgrading overall. You could go as extreme as moving into a cheaper home or getting a roommate, and selling your new car for an older, used car.
Just keep reminding yourself that this is all temporary. You will soon be caught up and well on your way to financial success.
Be low maintenance (at least temporarily)
It blows my mind that people spend hundreds at the nail salon or on getting their hair done each month.
I’ve had my nails done maybe 5 times in my life. I cut my own hair. I do my own eyebrows. I also don’t buy new clothes for months at a time. I never buy designer. Starbucks is for very rare occasions. And guess what?
I still manage to keep up with my appearance, people still respect me even though my nails aren’t perfectly filed, I still manage to dress nicely, and I can make better tasting coffee at home.
I guess you could say I’ve adopted a more “minimal” lifestyle, and honestly my life is much easier AND more rewarding because of it.
For example, I save so much time and money by not wearing makeup. This has allowed me to have a wonderful morning routine while still getting enough sleep.
The clothes I buy can easily be washed and dried at home, I don’t have to worry about taking them to the cleaners.
Buying less stuff in general makes me feel better!
The more you buy, the more you have to store, and the more cluttered your home becomes. I’ve learned to realize and appreciate that I have enough.
I know this lifestyle isn’t for everyone, but how much money do you think you could save if you cut these things out of your life for a couple of months?
Instead put that cash toward your savings!
And although those are things I don’t prefer to spend money on, that’s perfectly OK if you want to. After you take a break from those things for a bit to get ahead financially, you can then make those part of your “rich life.”
If you’re familiar with Ramit Sethi, author and blogger of I Will Teach You To Be Rich, he often talks about “Living a Rich Life for You.”
The idea is that if something brings you happiness and value (richness), you can make room for that in your life.
Personally, I don’t want to spend money on my nails/make-up because that doesn’t bring me joy. However, I like to spend more money on my groceries because I love and appreciate food so much. I also choose to buy books because they bring me so much joy and value.
Find areas you can save
If you haven’t tried already, make an effort to save on the obvious.
If you’re living paycheck to paycheck, do you really need cable?
Do you need Netflix? Or Spotify?
Start with the obvious and then go deeper.
-If you have loans, try to see if you can consolidate them to lower the interest rate and monthly minimum balance.
-Call ALL of your credit card companies and see if they can lower your interest rate, this will save you money in the long run.
-Go grocery shopping based on sales, be sure to make a list and use coupons if you can.
-I have used the app IBotta for years which saves me a few bucks each month on my groceries.
You can “cash out” after reaching a $20 threshold which I still find very helpful.
-Start using the cold cycle for washing your clothes and make sure you unplug everything not currently in use. Make sure everyone shuts off the lights in the home when they don’t need them.
-Cut costly habits (again temporarily if necessary). No more morning coffee, no more soda, no alcohol, no vending machines, etc. Drink water and eat whole foods.
-Carpool or bike to work to save on gas.
-Make your own cleaning supplies.
There are quite a few ways you can save a little here and a little there. Some things may require more sacrifice, but it can definitely help you out.
Increase your income
This may not be what you want to hear, but increasing your income is a must for most people.
How to find cash, fast
- Sell stuff around your home
This is easily the fastest way to make cash with things like Facebook marketplace and Craigslist. Look around your home for things you don’t need or no longer find value in. Take a few good photos and post it for sale. If you can wait a couple of days, use websites like Ebay to sell your stuff.
If you haven’t decluttered your home in awhile, you’re potentially sitting on hundreds of dollars.
- Flip thrift/garage sale/flea market items
Similarly, you can spend a little cash now by shopping at thrift stores, garage sales, flea markets, and even the dollar store. This requires a bit more research because you want to be sure you are purchasing items that have a higher resale value.
Thrift stores are great for clothes.
Garage sales are great for small gadgets, furniture, and toys.
Flea markets are also great for furniture.
And the dollar store is great for books and health/beauty items.
Did you know there is also a FREE section on Craigslist?? Act quickly and pick up a few free items. Fix them up if necessary or just try selling them for a few bucks!
- Sell your plasma
If you are over 18, over 110 pounds, in good health, and have had no tattoos or piercings in the last 12 months then you are probably a good candidate for donating plasma.
Oh, and you should be comfortable with needles!
According to the CSL Plasma website, you can get paid up to $400 in a month if you are a new donor.
Before you go, be sure to get enough sleep, drink enough water, and eat a healthy meal.
You can make about $20-$50 each time you donate, which is pretty reasonable. So to make more money you would have to speak with the staff and see how often you can come in.
- Craigslist gigs
There is a section on Craigslist for ‘Gigs’ where you can find all sorts of odd jobs. If you find something you can do, contact the person who posted it to get more information. Be sure that it is not a scam, and that they are safe.
There are people looking for movers, junk removal, photographers, tutors, etc.
- Participate in research
I have participated in a couple of research studies with the company Nielsen. Each time they gave me a $95 Visa gift card. The research was very simple, I had an EEG cap on and I had to watch a tv screen and push buttons when the instructions said to do so. It took about 30 minutes of my time and I was able to use that money for groceries and other necessities.
Nielsen isn’t the only group around. Do some Google searches to find legitimate and safe studies near you, you may be surprised what you find!
- Online surveys
There are many survey sites available, but the most common one is SwagBucks. A couple of years ago I tried a little experiment with Swagbucks. I spent a total of 14 hours one month filling out Swagbuck surveys and doing whatever I could to get points. I was able to redeem $35 worth of gift cards!
Obviously that isn’t a life changing amount of money, but it was helpful at the time. You can even redeem points for PayPal, which means you can put that money in your bank for your bills! If you can spare a bit of time throughout your day, try it out.
If you use my link and earn 300 SB within your first month (which isn’t difficult), we’ll both get $3!
Start a side hustle, get a second job, or find a new job
This is where you can really make a big change.
You can only save so much, but the amount of money you can make is unlimited. According to Bankrate.com, about 4 in 10 Americans have a side hustle.
In my opinion, side hustles are underrated and I think more people should try them out. What would an extra $200 per month do for you? What about $500? Or even over $1000?
My side hustles have helped me pay down more debt and live more comfortable in general by saving.
Working on something (that I enjoy) outside of my full-time job is really exciting for me. To be honest, I don’t know what I would fill my time with anyway. Watching tv/lounging around bores me.
I spend probably 10-20 hours a week on my side hustles (my blog and YouTube). If you do the math, it makes more sense for me to get a second job. I make $450-$800 a month right now from my online presence, and it has taken me a couple of years to get to this point.
However, the best part about it is that there is no pressure for me to work on these things if I don’t want to. A second job is a big commitment that would take away a lot of my freedom. Instead, I can take a break from writing or filming for a few weeks, yet I’ll still make income.
A second job may work better for you if you prefer to have a set schedule and more guidance. Another option is starting a job driving for Uber/Lyft or delivering food through DoorDash, which allows for some structure but is still flexible.
Another great option is asking/negotiating a pay raise from your current employer.
If you think you can potentially earn more in a different company or role, start applying! If you can prove that you are a good worker, you should be able to increase your salary.
Continue saving while paying off debt
Once you reach a savings total that you feel comfortable with, you can aggressively start paying down debt. However, try to keep funding your savings even if it’s only a few bucks.
If you are familiar with Dave Ramsey, you know that he suggests only a $1,000 emergency savings while paying off debt, until you are debt free. This is simply not enough for the average person.
One root canal knocked out all of my savings and then some. Instead, I choose to add a little bit more money to my savings every month. Plus, I have sinking funds for gifts, car maintenance, and medical/dental bills. These sinking funds can also act as emergency money if absolutely necessary.
For example, if I REALLY needed $500 after depleting my whole emergency fund, I could dip into my gifts sinking fund. Gifts are not absolutely necessary for me to buy, it’s just nice to save for them.
If you only save $1000, something may happen and you’ll end up exactly where you started. Reach at least $1,000 BEFORE you start paying off extra debt, then continue to save.
Getting your finances straight might take a lot of work, but I promise you it’s worth it.
Life is so much easier and less stressful when you know you have a cash cushion in the bank.
Make a plan and start saving and making money today! The sooner the better.