How To Save $1000 While Living Paycheck To Paycheck
A few months ago, I was like so many… I had no savings in my account whatsoever. Then in a span of a week or so I followed just 4 steps and now in April I have over $1,200 in savings…
I didn’t change my job. And I definitely didn’t have time for a second job. Instead, I focused a few minutes of my day on changing my finances –making sure that I never put in more than 20 minutes of effort in a day. I’m not here to preach, instead I’m hoping that by telling you how I changed my finances, I can help you break the paycheck to paycheck cycle...
Step 1: Open a new savings account and deposit $5
Why a new account? Momentum is so essential to this process, I’ve learned after so many failed attempts. Having a separate account helps you track your positive progress and builds that crucial momentum. Quick metaphor: when you’re on a diet, if you step on a scale and see that you’ve lost some weight, you feel reinvigorated and you keep pushing on right? I learned it’s the same thing with your finances.
Personally, I chose Synchrony bank’s online savings account because there are no fees and they offer the highest rates. However they may not be the best for everyone, so click here, or scroll to the end of the article to see the full list of the best online banks I've found.
You could open a savings account at your local bank, but my suggestion is an online bank because you’ll be less likely to withdraw the money and the rates are significantly better.
And, I know it doesn't seem worth it to deposit $5 right now, but getting started is an extremely important first step! Just trust me.
Step 2: Analyze your bills – Here are the problem spots I found with my bills (hopefully these help you too):
1. Car insurance – I saved $36 per month for just 10 minutes of work
Yes, I know you already know this… But, what you may not know is that car insurance companies make all of their money off of people that have been with them the longest. Don’t believe me? Have you had a clean driving record? Have your premiums stayed the same or even gone up over the past few years?
They think you won’t leave once you’re with them, so they charge whatever premium they want. Personally I switched from Geico to AllState, but insurers charge different premiums for every state, here are some of the best offers in your state.
2. Credit Cards – I cut my interest payment by $80 per month for just 5 minutes of work
Here is the caveat: You need a good enough credit score (550+) to qualify for a 0% APR balance transfer card. If you’re not sure what your score is, I recommend checking that first here. If you know your score is good enough and you’re currently paying over 5% on your debt, then you should try for a balance transfer card with a promotional 0% APR. I personally opted for the Chase Slate Card because there are actually 15 months of 0% APR. However, it may not be the best card for you, so here are all the most popular balance transfer cards.
If your credit score is too low, you could still save a bundle by switching to a lower interest credit card. Really any decrease in in interest payments could save you a ton of money every month.
3. Napkins, Utensils, Ketchup and other condiments -- $20 per month for 10 seconds every time I ate fast food
This may seem a little unusual and may not apply to you, but for me I enjoy hot sauce, ketchup, and any other condiments especially on leftover food. So I’d ask the fast food employees for as much condiments as they could possible give me and I’d stock up. I never ransacked the place, but if the employee gave me 10 packets of ketchup, I’d thank him/her and walk out a happy guy! Yes, you are allowed to laugh at this, but $20 every month definitely adds up over time. If this doesn’t apply to you, think of something similar that would, maybe plastic spoons that you can reuse?
4. Final Saving Tip - Always ask (nicely) for fees to be waived, no matter what the fee is.
You’d be shocked… I had a late rent payment fee waived, a late water payment fee waived, and even a parking ticket waived by calling my city traffic department… yes I swear!
Once you’ve figured out how much you are saving from some of these new changes, set up an automatic transfer for that amount to your new savings account to make sure this new money actually gets put away.
Step 3: Create a new income stream of $30+ per month
The most important part here is that your quality of life and free time is minimally interrupted so that you don’t even notice. Sure you could get a side job, but who wants to work all day?
1. Inbox dollars - $5 just for signing up, then ~$10 for every 30 minutes of video watching, surveys, etc.
This is my favorite survey site because they actually pay you via check. Not to mention, a lot of the things I did for the cash were actually pretty fun… And all of them can be done while catching up on your favorite TV show.
2. Swagbucks - ~$5 per day depending on how much searching you do
This is amazing because the only thing you need to do is switch from using Google or Bing as your search engine, to using Swagbucks (which is actually powered by Yahoo! and works great!). Every time you search you earn money. It’s that simple. After a day, you won’t even notice the difference between Swagbucks and your prior search engine.
Step 4: Keep this going…
If you’ve done everything that I did, and didn’t spend the extra money, in a few months or so you should have saved and earned a total of at least $1,000. $1,000 is great, but what’s better? $5,000. You’re really not that far away if you can keep this going!
Conclusion:
There is no timeline here because ultimately the quicker you perform all of these, the more you’ll save this year. I don’t know about you, but everyday stressing about finances was a wasted day. I’m not rich and I’m not telling you that you will be. I’m just hoping that you can maybe go to the movies every once in a while, or take that special someone out to dinner.
One final thing I’ve learned: The biggest mistake I made for years was never really getting started. So don't let that happen to you... Start right now by picking one of the online savings accounts we've selected below, and make your first deposit!
Sent from my iPhone
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