paycheck to paycheck

How to Save $1000 When Living Paycheck to Paycheck

August 8, 2017 By James Hendrickson Leave a Comment

Saving money is no easy task, especially if you’re already living paycheck to paycheck. If you’re like many people (about 57 million Americans), you have no emergency savings at all. That’s right only 35 percent of Americans have a few hundred dollars in savings. Thirty-four percent have no savings at all and only a small 15 percent have more than $10,000 put away in savings.

This is because so many individuals are living paycheck to paycheck. However, your current financial situation does not have to determine your finances in the future.

The Importance of Saving

You may be thinking, “So, what? Why do I need savings?” Well, saving money is extremely important for securing a stable financial future. Having money saved can come in handy for big purchases, investments and, of course, retirement. The most important savings account to get started, however, is an emergency savings.

Emergency Savings

Having an emergency savings fund is key to being financially sound. As you may know, the smallest change can break you where cashflow is concerned. Let’s say you lose your job or are demoted for some reason, having a backup stash of money to cover your necessities until you stabilize your finances can make a world of difference. So, let’s find out how to save $1000 while living paycheck to paycheck.

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How to Save $1000 When Living Paycheck to Paycheck

Deciding how to save $1000 when you don’t have much cashflow to begin with is difficult. There are some things you can do to save $1000 (or more) while living paycheck to paycheck though.

First, you’ll want to open a savings account. For many people, having a separate savings account (not joined with any other account you have) helps build momentum for their savings. When you’re choosing a new savings account try and select one that is more difficult to withdraw from.

Next, take a good look at all of your expenses and decide where there can be money saved. For example, make sure you are getting the best deals possible on car insurance. If you find you can get a better deal, make the change necessary. You can also do things to trim down your electricity and water costs in your home, like turning off lights and shutting off the water while you shave. These small changes can help you save money each month that can go into your new savings account.

Lastly, try to create a new source of income (at least $40 per month). Many people take online surveys to make extra cash with Survey Junkie or other survey sites. You can also earn small amounts of cash doing tasks on Fiverr. This income will go directly to savings and will help you save $1000 faster than if you were working with your base income.

Maintaining Healthy Saving Habits

The most important part of managing to save $1000 on a tight budget is being able to stick to your new saving habits. Once you’ve established your new saving plan, stick to it (even once you’ve reached your savings goal). You can never have too much money saved!

Have you saved money on a tight budget? How did you manage it?

Photo: Icy Tales

5 Ways To Save (And Earn) Even More In 2016

March 1, 2016 By Jennifer Clark 1 Comment

The popular phrases “time is money” and “it’s not what you earn, it’s what you save” offer valid points and is sound advice. However, if you don’t put in the time, you may not make the money, and if you aren’t earning enough, it can be really hard to save. What’s worse is putting in the time and still barely breaking even. Are we hitting the nail on the head? Is this a constant battle for you?

When you’re living paycheck to paycheck, saving can seem impossible. Luckily, we’re here to help. Below are five ways to save (and earn) even more in 2016:

Start at the bank account. Evaluate your monthly spending. It’s amazing when you take a deeper look at your monthly expenses how much you’ll find you spend on miscellaneous things like coffee or dining out. It may not seem like it, but these are both luxuries. Place a limit on how much you spend on these activities each month. If you make a goal to not spend more than $30 on dining out a month, but you instead spend $50, reduce your budget for the following month. Conversely, if you don’t spend your dining out budget for a couple months, take that amount to splurge on yourself one month. You could also use what you don’t spend on your budget to increase your savings account.
Skip the extreme couponing. After all, as we reminded you above, time is money, and this type of discount searching can absorb a lot of time in order to reap a benefit. Instead, use that time for other activities such as spending time with family (priceless) or researching smarter ways to invest your money (also priceless with the potential to gain). This is not to say utilizing a coupon or two will not help decrease costs; just know there are other ways to save while grocery shopping.
Adjust your spending choices. What financial goals do you have for yourself this year? If the answer is none, it may be time to make some for yourself. Examples include wanting to save more money, finding a profitable investment, earn more money, etc. Whatever the goal, be as specific as possible. A rule of thumb is to save 20% of your income. So, if you bring in $1,800 in a month, $360 should go into savings. If this seems impossible (and by following rule number one, you may find that it’s actually quite feasible) shoot for 10% and increase by 1% each month. Regardless, at the beginning of every month, fund your reserve accounts after paying your bills so that you can have a little more financial freedom in the following weeks.
Pay off your debt. Investing does not have to be in stock; you can also put money toward your debt, and in fact, you should work on paying off your debt first. If financial freedom is your ultimate goal, monetary obligations will always hold you back. Obviously, the more you earn, the more you can close out these bills. Earning more, however, is the ultimate challenge. But, in today’s world, it is easier now more than ever to make a side income, whether it’s through Uber or Lyft, selling on Ebay or, yes, even blogging, the possibilities are seemingly endless. As you earn more, though, save more so that you can reach those economic ambitions much sooner.
Choose investments that will pay you back. If you’re contemplating purchasing rental property as a means to make a secondary profit, know the costs such as insurance, maintenance and taxes prior to going in. Also know that your time may be an investment as well. Increasing the rent will not solve your problems; increasing your knowledge will.

The ultimate goal is to improve your net worth, and through these efforts, you can accomplish this. Decreasing your debt, starting a retirement account and feeding your savings account are all important to do. You will need to work smarter, hustle and research; but with consistency, you can pull yourself out of financial worry faster than expected.

Photo: Flickr: Pictures of Money

The 52 Week Mini Money Challenge

January 7, 2014 By Jeffrey Strain 4 Comments

For those who are on a tight budget, or who are learning to save money for the very first time, you may want to skip the standard 52 week money challenge and instead opt for the mini half version (You may also want to check out the 365 day money challenge which saves a similar amount, but is done on a daily basis beginning with a penny.). The concept is exactly the same. Each week you save a designated amount that corresponds to that week, but instead of beginning week one with $1, the mini challenge cuts that amount in half so that the first week only $0.50 should be saved. Then an additional $0.50 is added for each week of the year. In week two, $1 needs to be saved, in week three, $1.50. This continues until week fifty-two when $26 needs to be saved. At the end of the year, you will have $689 in your account following the mini half challenge:

52 Week Mini Challenge (click on image to print)

While this challenge only saves half the amount of the original challenge, the amount isn’t the main point of the challenge. For those who are living paycheck to paycheck, the most important thing is to begin saving something. Even a small amount is better than nothing at all. It’s the process of getting in the habit of saving on a regular basis that’s important. Once that habit becomes established, you’re in a position to save as much as you want. You can move onto the regular challenge or even try a double challenge. The first step is establishing the habit so that any amount desired can be saved in the future.

The one drawback following the above steps is that the largest amounts need to be saved at the end of the year when budgets are often at their tightest due to all the holiday activity. Even when doing a mini-challenge like this, the increased amounts at the end have the potential to be an obstacle that makes some people decide to quit. With that in mind, we have put together an alternate version which allows you to do the challenge with more flexibility during the year.

52 Week Mini Half Alternate (click on image to print)

52WeekMiniMoneyChallengeEditableWithBlueChart

With this version, you decide how much to deposit into your account each week. When things are good, you can knock off the higher amounts, and when things get tight, you can opt for a lower amount. While you should always shoot to put away the highest amount listed on the chart, if you aren’t able to reach it for some reason one week, you can still cross off the amount you did save and continue on with the challenge. In the end, you save the exact same $689, you just do it in a way that fits your lifestyle rather than trying to adjust your lifestyle to the chart.

As with all of the 52 week challenge variations and options, the most important aspect is choosing the one that best fits you and your lifestyle. By choosing the one you have the most confidence in completing, you have a much better chance of success. And as mentioned earlier, the first time doing this isn’t so much about the actual amount saved, but that you get the savings process started. Below you’ll find some more challenge options that are worth investigating and considering as well.

365 Days
52 Week Standard
52 Week Variation
52 Week Make Money
52 Week Kids
26 Bi-Weekly
24 Bi-Monthly
12 Monthly

Zero Effort Money Saving Hacks

Money challenges aren’t for everyone. You may be looking for a more hands-off approach to saving. For people that want saving to be effortless, there are smartphone apps like digit.co. Digit analyzes your account balances and automatically withdrawals small amounts of cash and places it into savings for you. Check it out at digit.co.

10 Common Financial Blunders

September 11, 2013 By Jeffrey Strain 6 Comments

There are plenty of steps that you can take to help you become financially successful, but all your hard work will end up being for nothing if you’re undermining the financial success you’re seeking to attain. The financial steps to success are important, but understanding the actions that’ll ensure financial failure are just as important. It usually only takes a single financial blunder to wipe out much, if not most, of the financial progress you’ve made. Here are ten of these blunders that you want to avoid or resolve as soon as possible to ensure the long-term health of your finances.

Spend More Than You Make

This is the foundation of all personal finance. If you can’t live within your means, you’re going to find yourself in financial trouble no matter how much money you make. While you may be able to get way with spending more than you make for a while, it’ll eventually catch up with you. At some point you’ll have to make up the difference and when that point arrives, your finances will not be happy.

Live Paycheck to Paycheck

While living paycheck to paycheck may seem better than living beyond your means, it still ensures failure in trying to meet your financial goals. Again, this applies no matter how much you make. Paycheck to paycheck living fails to take into account unexpected expenses that are a part of life. While you may be able to pull off the paycheck to paycheck game for a while, it’ll only be a matter of time that something unexpected puts you into debt which is a difficult hole from which to escape.

Trying to Keep up with the Joneses

The Joneses aren’t who you are competing against. In fact, what they’re doing and buying likely has very little to do with your own financial goals. The reason that what the Joneses are doing may look appealing is because you have failed to understand your own financial goals. By adopting the goals of the Joneses (who may not know their true financial goals because they may be trying to keep up with the Smiths) instead of figuring out what financial goals are truly important to you, you’ve guaranteed that you will never reach them. Forget the Joneses and take the time to figure out what’s important to you.

Not Knowing Your Financial Goals

If you don’t know where you’re driving, the chances of you getting there are slim. The same holds true with your finances. To succeed, you need to know where you want to be financially. The way to achieve that is by knowing what they are and then creating a map to reach them. Not knowing your financial goals is like wanting to get to a vacation spot using a blank map.

Letting Money Control You

It’s not about how much you make, but if you make enough to do the things that are most important to you. Money is a means to an end, not the end itself (after all, it’s nothing more than pieces of paper printed with ink). Financial success isn’t dependent on how much you have, but rather whether you can you attain what’s important to you with the amount you have.

Failing to Improve Yourself

Your education doesn’t end when you graduate from school. If you’re unwilling to improve yourself, you and your finances will stagnate. Improving yourself is a never-ending process (who do you know that is perfect?) and it’s an essential part of keeping your long-term financial well-being.

Relying on Others to Take Care of Your Money

Rarely do those who take care of your money have the same interest in what ultimately happens to your money as you do (they’re probably more focused on making money for themselves, not for you). While it’s perfectly acceptable to rely on others to give you suggestions and help you think through financial decisions, you should always be an integral part of the decision process. If you rely on others to take care of all your financial interests without you having any oversight, you shouldn’t be surprised when money is invested and lost in ways that you may have never allowed had you known.

Invest in Things You Don’t Understand

If you’re goal is to quickly lose the hard earn money you’ve made and start from square one again (or even in the hole), start investing in things you have no idea about. The problem isn’t that the investments are bad in themselves, but most investments have risks and the only way to evaluate them is to understand the investment. When you have no clue what you’re doing, that usually means that others who do have a clue will make money at your expense. No matter how much uncle Joe talks about what a great investment it is, place your money elsewhere until you are confident you understand everything about it.

Being Financially Afraid

Just as being to aggressive can ensure financial failure, being afraid to take any risk at all will also almost always ensure it. To grow your money to meet your goals means taking calculated risks that bode in your favor over time. Not doing so will result in your finances treading water, if not sinking, and falling short of your goals.

Ignoring Your Finances

It seems that many people believe if they simply ignore their finances, then things will get better or somehow take care of themselves. While it’s a nice hope, it’s nothing more than a fantasy. Reality says that ignoring your finances will lead to all types of trouble that ultimately ensure you fail to reach your financial goals.

These are some of the more common blunders that people make that end up hurting their finances. By avoiding these financially destructive steps, you’ll greatly increase the odds that you’ll meet your long-term financial goals.

(Photo courtesy of Nick Allen)

I Have No Money

December 17, 2012 By Jeffrey Strain 75 Comments

It’s one of the worst feelings you can ever have. That moment when you see there is still a week left until you get you next paycheck and you have no money, little food and you have no idea how you are going to make it. Your mind starts racing trying to figure out where you might be able to get a few extra dollars and it’s not long before you hit full panic mode as you scramble to figure out what, if any, options you have. I was there years ago when I was just out of college and just after my fiance had moved in with me. I found out she had $80,000 in credit card debt that I hadn’t known about until then. While we scrambled and were able to make things work until the next paycheck came, we made the decision that the situation would never happen again and it was the steps we took to resolve the issue which were far more important than securing the money until the end of the month.

As soon as I realized we didn’t have enough money to last until the next paycheck, I treated it as a major emergency. It entailed a number of long nights with a lot of crying, denial and shouting before we came up with a plan that we both were on board with. We took some drastic steps that went far beyond what most people would do, but it did allow us to wipe out the debt in less than two years (and taught us the great importance of an emergency fund).

The first step was acknowledging that this was a major issue. My fiance had always lived paycheck to paycheck and that had become her norm. Even though we were in the process of planning the wedding, I said that I wasn’t willing to get married until the debt was gone (you can imagine how this went over at first). Once it became clear that this was not a negotiable point, we started to put together a plan to actually tackle the underlying issue of the debt that was causing the paycheck to paycheck problem.

In the end, we ended up making three huge sacrifices that neither of us would have chosen to do, but are sometimes the choices that need to be made when an emergency appears. This included moving out of the apartment we had into the basement of her parent’s house (something that I really didn’t want to do, but did to show that I was willing to make as much of a sacrifice as she was). We both also took on additional work, her doing a job that she didn’t especially like, but made a decent amount of money. We also cut things back drastically so that we were living on about 60% of my old salary, even while all the additional money was coming in.

To tell the truth, I don’t remember a whole lot about those two years and it seemed to go by in a whirlwind. With two jobs and doing some extra work on the side, I was working far too many hours which made the days all run into one another. They were tough, but somehow we managed through them and came out in a situation where we would never have to worry about facing the “I have no money” until the next paycheck scenario.

The lesson here is that while the fact that you have no money at the end of the month may seem like the emergency, it really is only a symptom of the true emergency — the underlying situation that created the issue of not having money at the end of the month in the first place. How that situation gets solved depends a lot on your particular situation and the options that you have (and are willing to take), but chances are it is going to mean disrupting the norm that you have had until that point and making some major sacrifices to change things for the better. Most of all, you are probably going to have to find a reason that will motivate you to make those changes (not being able to get married until the debt was gone was highly motivating to us) which will give you a reason to endure the tough times ahead.

While I was far from happy about the decisions that we had to make at the time, in retrospect they were a great learning experience. I know that I can do things that I had never imagined that I could do before then, and that has stayed with me until this day. Learning to make the difficult decisions, coming up with a plan to make the goal attainable and then following through are all lessons that apply to many other parts of life that has served me well, and although I would never wish anyone the situation of having to figure out what to do when there is not enough money at the end of the month, if you are able to lift yourself out of that situation, you will have given yourself a number of useful skills that can be used throughout the rest of your life.

(Photo courtesy of danielmoyle)

Is Anything That You Own Worth Living Paycheck to Paycheck to Pay for?

September 11, 2009 By Guest Writer 9 Comments

By Linda W

This is a simple question that I ask myself that helps me stay debt free. It may sound infantile or even stupid to some, but if you take the question seriously each time you ask it as I have, it has saved me from making a lot of poor purchases over the year. I know because when I was younger, I did live paycheck to paycheck. The question is:

Is anything that I own that’s worth living paycheck to paycheck to pay for?

Is the new car that I want worth living paycheck to paycheck to pay for? Is a closet full of clothes worth living paycheck to paycheck to pay for? Is keeping up with the Joneses worth living paycheck to paycheck to pay for? Is there really anything that I own which is worth living paycheck to paycheck to pay for?

I don’t know what the answer is for you, but what I learned by asking this question is that what really makes me happy is not being a slave to the things that I want to buy. Yes, I may be disappointed when I can’t get everything I want the instant I want it, but I also know I’m a lot happier that when the (not brand new) car unexpectedly breaks down, it isn’t a financial disaster.

When I lived paycheck to paycheck, I was a slave to all the things I wanted at that moment. I had to face the fact that my debt and paycheck to paycheck lifestyle was going to mean that I could never retire or ever feel at financial ease. That’s when I started asking the question.

Is anything that I own that’s worth living paycheck to paycheck to pay for?

If you find yourself living paycheck to paycheck, you may want to ask yourself this question too.

Do you have a story about saving money or earning money that you’d like to share? We’d love to hear about it.