Living paycheck to paycheck is one of the most stressful situations I’ve ever been in. There was a period where I was living paycheck to paycheck for a long time and felt pretty hopeless. I just couldn’t see the way out.
As I started learning about money I gradually snapped out the hopeless feeling. I took a big interest in making my financial life better so that I could make the rest of my life better. One of my first steps was to put some money in savings so that I had something to fall back on.
If you’re living paycheck to paycheck putting money in your savings account is one of the smartest things you can do. Here’s how to save $500.
Make Sure Your Budget is On Point
I’m writing this post with the assumption that you’ve already got your budget in check. When I was living paycheck to paycheck I didn’t have a spending problem – I had an income problem. If you’ve already cut costs everywhere possible and are living on a very modest budget, skip to the next section.
If you think you might have a spending problem (you earn more than $40k per year for your household and don’t live in a big city like New York or LA) then you need to fix that first.
Check out these articles on how I raised two kids on $20k per year and how to live on $30k per year. If you have a spending problem cut your costs to save $500. You should be able to amass that in a month.
If you don’t take the time to correct your spending habits, earning more money will never do anything for you. All you’ll do is spend the extra money you earn and possibly create a situation that’s even worse than the one you’re in now.
Earn $100 per Week for 5 Weeks
Would you be willing to sacrifice 5-10 hours of your time per week for five weeks to get ahead? Good! That’s what you need to do.
So often people living paycheck to paycheck discredit the fact that they can simply work a little more for a short period of time to get ahead. (I know that I did.) The truth is there are SOOOO many ways to earn more money and those who accept that fact and act on it are the ones who do get ahead.
If you don’t have any ideas of what to do here are some things to consider:
- Paint Houses
- Test Websites – $10/test (sign up here)
- Write Articles – (how to freelance)
- Take Surveys (bunch of sites)
- Detail Cars
- Drive for Uber
- Work More for Your Current Employer
The important thing is not what you do it’s that you do something! When it comes to earning extra money the sky is the limit. You need to figure out what fits your skillset and pursue it until you’ve completed your savings goal.
You always have the option of working more hours at your current job or taking on a second part time job. However, I’ve personally seen the power of start a small side business. Your own side business can help you earn a much higher hourly rate and is more flexible than a standard job.
Other Things You Should Do
Earning extra money is not the only thing you can do to hit your $500 goal. In fact, with tax season coming up a lot of refunds will be issued. If you get a large tax refund put it to good use this year!
Put at least $500-$1,000 in savings and use the rest to pay down debts if you have any. Don’t go out and buy yourself a bunch of silly things you never really needed in the first place. Be smart with your refund.
Also, set up a savings account and have $10 automatically deposited every time you get paid. This will get you in the habit of saving and if all else fails you’ll have accumulated $520 over the course of one year.
After You Save $500
If you’re serious about improving your financial life don’t stop after you’ve saved the $500. Move onto to your next big goal like paying down debt, if you have any. If you don’t have debt (congrats!) go back to saving more cash.
After your emergency fund is stocked up consider saving some for retirement and also saving for your future financial goals like buying a house or paying for your children’s education.
Improving your financial picture takes time and hard work but can drastically improve the quality of your life. If you’re living paycheck to paycheck get serious about getting ahead. You can do it!