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How do you save money living paycheck to paycheck?
I’m sure that most people are wondering, how on earth can I save money, when I live paycheck to paycheck. Or how can I save when I barely have enough to pay my monthly bills. Yes, many of us desire to save money but just don’t know how and where to get the extra cash to save. Money does not bring happiness but it sure does give peace of mind and reduces stress.
A CareerBuilder survey conducted from May 24 to June 16, 2017, showed the following:
- 78% of Americans are living paycheck to paycheck
- 1 in 10 workers making $100,000+ live paycheck to paycheck
- More than 1 in 4 workers do not set aside any savings each month
- Nearly 3 in 4 workers are in debt. More than half think they will always be in debt
- More than half of minimum wage workers work more than one job to make ends meet
Do you fall into one or more of the findings above?
In a CNBC story:
Story of 3 janitors who became self-made millionaires.
- Ronald Read – Died at 92yrs old. When he died, his family found out that he had an $8 million portfolio. This surprised everyone around because he lived a frugal lifestyle. Read was a Janitor and a Gas Station Attendant. Does that surprise you?
- Steve Hightower – Has his own oil and transport business, which he started in 1981. In 2017, the company aimed to make $500 million. He started out as a janitor, cleaning floors and toilets.
- Sean Conlon – An immigrant from Ireland. Sean Conlon arrived in Chicago with $500 and started out as an assistant janitor. He worked hard to save money, which he eventually used to buy his first apartment. He began selling real estate at night, and ultimately became one of the top real estate brokers in the country.
If you don’t think you can build wealth starting out working a minimum wage job, think again.
Saving money does not depend on your job and how much money you make, it depends on how well you manage the money you make.
One thing that we learn from Mr. Read, Mr. Hightower, and Mr. Conlon, is that a job title and how much one makes does not determine their net worth. The CareerBuilder article states that some people making $100,000 a year, are still living paycheck to paycheck. Why?
Your spending habits will determine if you will live paycheck to paycheck.
Why is it that most people that live paycheck to paycheck remain in that position for the rest of their lives?
- Many people live for today
- They don’t think about tomorrow
- Some believe they have to make more money
To get out from the paycheck to paycheck hurdle, you have to make some changes.
- changes in your thinking,
- how you spend money
- types of friends, etc.
What are you willing to change?
I adopted Dave Ramsey’s quote after I read The Total Money Makeover, that says “If you live like no one else, later you can live like no one else”.
I live by this mantra, I do not want people to see me and see all my assets.
What does it mean? It means that the clothes you have on are your only assets. An asset is something that belongs to you free and clear. Unless your home and car are paid off, they do not belong to you, if you miss several payments, the bank will come for their money or the property.
Tips to help you save money
- Learn to Budget
Having a budget is the first step in trying to save money. Where does your money go every month? Someone told me recently, that there should be no limit on how much is spent on food. If there is no budget, then there is a possibility of spending more money in one area and not having enough to take care of other areas. Having a budget will show you precisely how much is spent and what it is spent on. If you don’t have a budget, check out the 50/20/30 budget.
- Cut your expenses
What are you spending your money on? Write down all your expenses, go through each line and ask yourself if you can live without that item. When it comes to saving money, what level of commitment are you willing to make? Maybe you could cut the cable service or call and renegotiate your rate, lower your grocery bill by using the $5 meal plan service, coupons and/or Ibotta. You may consider refinancing your home or possibly selling if you cannot afford it. You can also rent out a room to help with the mortgage. If you are committed to saving money, you will be willing to make the required sacrifice.
- Save with your company Retirement Plan
I still do not understand why more people do not save with company retirement plans, especially when the company provides a match. If the company requires you to put in 4% of your money to get a 2% match, please participate. If you don’t take advantage of it, you are leaving free money on the table. This money will add up over time.
- Extra Income
If your expenses have been cut to the point where there is nothing else to cut, maybe it is time to get an extra income coming in. There are multiple ways to earn extra income without leaving home. Think of your skills and hobbies and consider offering your services for a fee. Selling what you no longer need or use on eBay is another way to bring in extra money.
Saving money is a habit that should be adopted no matter how difficult it may seem. Has it been done before? Yes, then you too can do the same. Saving money involves making sacrifices
What tips do you have for saving money on a low income?
Hi, I’m Ngozi, I work full time during the day blog at night and in my free time. Join me as I write about saving money, side hustle, getting out of debt, and ways to enjoy the simple things in life.