While living paycheck to paycheck you want to be able to get to save $1,000.
Unplanned purchases and costs pop up monthly. With a grand as a sort of cushion, you can manage these unexpected costs without going more into debt.
To break the cycle, you’ll need to do this in small steps.
It won’t happen overnight.
You may be surprised to know how fast you can actually save $1,00 when you have an actual plan.
Let’s get started.
STEP 1: DESIGNATE EVERY DOLLAR
The point of a budget is basically directing your money to where it should go. It doesn’t have to be overcomplicated.
The easiest yet most effective way to budget is:
Add your cash + monthly income. Add your on-hand cash + your total expected net income for the month.
List your expenses: Subtract expenses from your cash + monthly income
Go to zero. Whatever is left over will be your savings. We’ll talk more about this in step 2.
If you’ve never been so good at budgeting before, it’s alright. Nobody is great when they first start, and the majority of people don’t even think about it. It’ll take a while to make your own system that you’re happy with.
STEP 2: OPEN A CHECKING ACCOUNT FOR SAVINGS
After your budget is created, there’s two situations you could be in:
- Your income is above your expenses
- Your income is below expenses
If you belong to #2, then go to STEP 3.
If you have money left over every month, here’s a vital action you must take – opening a separate savings account
In this new savings account, deposit your savings for the month as soon as possible!
For example, if you’re expected income is $2,500 and expected expenses are $2,200, then you’d deposit $300.
So why separate accounts?
Because we’re trying to make it super hard to actually spend this money.
A bad thing with this is that a few banks have some high account fees for accounts with smaller balances.
If you don’t want nasty fees, I recommended getting a savings account with CIT bank.
It’s only $100 to open an account and there are no monthly fees.
STEP 3: TIME TO BE A LITTLE MORE FRUGAL
If you want to be able to save $1,000 you want to cut down on living expenses. This means, cooking your own food, have friends over instead of going out, cut down on shopping, etc.
Remember that giving up these things aren’t permanent, it’s just temporary.
Other than trying to cut down on costs, you should also be figuring out how to save big amounts of money at a time.
Here’s three things you can do right now.
1)LOWER CAR INSURANCE
Reducing your car insurance bill is one of the simplest ways to save money.
There’s a ton of competition in the insurance world, so finding a company with lower rates won’t be hard.
Check out Esurance if you haven’t already.
Esurance’s Express Lane Quote allows you to get a quote in a few minutes, and works on your phone. They offer pretty low rates thanks to their “online only” system.
Monthly subscriptions can sneak up on you and make you wonder why you’re bills are so high. This is another way to cut costs really fast.
Want to get in on a little secret? Well it’s not a huge secret anymore but it doesn’t mean it’s any less useful.
It’s called Trim.
Trim is an app finds your subscriptions, cancels subscriptions, and will even negotiate for lower rates on your subscriptions.
3)CHECK IF STORES OWE YOU MONEY
You ever buy something and then find out the price dropped shortly after?
It can make you pretty upset. It does to me at least.
Did you know there’s a site that gets you a refund if the price drops on something you purchased?
With this site there are no hidden fees. You keep 100% of the refund.
STEP 4: MAKE MORE MONEY
Ole Ben Frank said it the best,
“There are two ways to increase your wealth, Increase your means or decrease your wants. The best is to do both at the same time.”
So now you’re next goal is to acquire more monies.
Have a mindset that making money is a skill that you can continually improve.
Right now you can only make $30 a month. But there’s a high chance you’ll learn some things which will enable you to make $50 next month, $80 and so forth.
Don’t be fooled that you have to go big. About everyone has to start small.
Here’s some ways to earn more money in a shorter amount of time.
1)INCREASE YOUR MAIN INCOME
The best way to make more is to increase your #1 source of income, such as your job.
Here’s some things to consider
- Request for more hours
- See if you can get a raise
- Get a better paying job
2) DO THIS WHILE CHILLING AT HOME
Survey sites are one of the quickest and guaranteed ways to make money online. Did I say guaranteed? Yes.. guaranteed.
You can do surveys on your phone while doing other things like watching Netflix. It allows you to make your down time actually productive.
Earning is pretty easy and straightforward.
Just sign up with a legitimate survey site, and you’ll get e-mailed when a survey is available.
A lot of readers of TravelerInfoHub have tried many sites, but the favorite is SurveyJunkie.
- SurveyJunkie is the #1 survey site. Top rated on TrustPilot. There’s no denying that these sites actually pay you money for your opinions.
- They don’t send SPAM.
- They offer the highest payouts in the business.
- They pay you through Paypal.
One of the popular hustles right now is being a Lyft driver.
- You can choose your own hours
- Drive during peak hours to get the most dollars per hour.
- You get a $250 signing bonus for whoever signs up right now.
4)THINK ABOUT USING A BALANCE TRANSFER CARD(REFINANCING)
If it’s hard to save $1,000, one of the intelligent things to do is save money by refinancing debt you already have.
This method mostly depends on how much debt you have and your credit history but can be worth doing.
If you have credit card debt, strongly consider a balance transfer card.
The most vital thing is paying off the entire loan balance before the 0% rate is no longer available. This is definitely not a strategy that let’s you rack up more debt!
See the top balance transfer cards at the moment.
Other refinancing options you might want to check out:
- Compare student loan refinance rates with LendKey. The average person that refinances with LendKey saves $16,000. It takes a few minutes to check rates, and that’s it.
- Compare mortgage refinance rates with LendingTree. Do you have a mortgage? Check out if you can reduce your interest rate with a reputable company like LendingTree. They let you compare up to a maximum of five offers in just minutes.
- Compare auto loans with LendingClub. See if you can get better rates with auto loans with LendingClub as well.
You want to make sure you’re paying the lowest rates possible when you have debt. This will enable you to pay it off as soon as possible.
5) DESIGNATE EVERY DOLLAR (ONCE AGAIN)
Let’s briefly do a recap:
- You created a budget
- Opened a separate checking acct
- Reduced monthly expenses
- Earned more money
- Seen if you can save money by refinancing
Now you can tune your budget to reflect any changes made.
Once you realize the difference between expected income and costs, put the difference in your separate savings account ASAP.
So if you want to stop the whole paycheck to paycheck thing while building wealth, it all boils down to increasing the gap between income and expenses.