A common question a lot of people have when they first start working on a budget and trying to save money for their emergency fund or pay off debt is how do I manage to get some margin so I can actually accomplish something. That’s a great question!
I truly believe that when God sees that we are trying to live smarter in the area of our finances in a way that honors Him and His word that He will honor that as well. Not saying that suddenly a coffee can with $1,000 dollars cash will drop out of the sky on your front porch but you might be surprised what happens. Pray that God will give you wisdom in this area. Pray He will guide your thinking as you try to find ways to save money.
2. The budget.
I’ve heard many people say that when they really sat down and looked at where their money was going that they felt like they got a raise. When we aren’t paying close attention money has a way of frittering away in areas that we don’t even realize. It’s possible that you might find you have more money available than you realize.
3. Sell some things.
Almost everyone has things lying around that they don’t really need. In fact you probably have clutter that you’d just as soon have gone. Garage sales are a great way to earn some extra cash. If you live in a place like an apartment where a garage sale isn’t really an option you might consider renting a spot at a local flea market. Other alternatives are Craigslist or E-Bay. Craigslist is generally more local so I think it’s better if you are trying to sell a large item like a piece of furniture. Hard to ship items can be difficult with E-Bay. If your item is not a problem to ship, like clothes, toys, videos, and other small items, then E-Bay is a good option as you can have people bid from all over the world.
4. Part-time jobs.
If you can’t reduce expenses another option is to increase your income. Sometimes even a little bit of additional income can give you the break through that enables you to start to make progress. I don’t want you working 2 or 3 jobs the rest of your life, but for a period of time to kickstart your finances, it’s worth a short-term sacrifice.
5. Take a hard look at your expenses.
Do you need all the options on your cable bill? Could you downsize to a less expensive package? Consider changing providers if you can get a great new customer deal. Or perhaps getting radical and doing away with cable altogether? Do you have phone options that you don’t really use? Do you have a land line and a cell phone? Could you get rid of one or the other? Talk to your utility companies to see if there is a way you can save. The house I used to live in was all-electric and the bill was exorbitant. I called and they had a deal where if you installed an 80 gallon water heater and allowed them to place a switch on it where they could remotely shut it off during periods of high usage, you could get a significantly discounted rate. We saved nearly half our bill doing that. You never know what programs there may be until you ask. At that same house we had the option instead of having a regular garbage service we could pay a yearly fee of $35 and take our garbage to the township dump. Was that a pain especially in the summer? Sure. But it saved a lot of money. Take a look at every expense line on your budget and see if there is anything you can do to save a few bucks. A few dollars here and a few there can start to add up.
6. Check your interest rates.
Do you have credit cards with high interest rates? Call your bank and see if you can arrange to have your rate lowered. There is nothing saying they have to, but sometimes they will, and you don’t know until you ask.
7. Look at the little things.
Do you take your lunch to work or do you go out to eat each day? Do you make frequent stops at places like Starbucks? Grab a coke and a candy bar at the gas station each time you fill up? Saturday night pizza? Couple trips to the vending machine each day? While many of those things may only be a couple bucks, if you add them up over a course of a month or a year it can be surprising (maybe a little sickening) how much we spend on those little expenses. See Death By A Thousand Cuts.
The library is a great source of free entertainment. Books. Movies. Magazines. Music. There are all kinds of resources available there and they are all free. Instead of heading to the movies or the mall, take a trip to the library.
9. Use cash.
One tried and true method for managing your finances is using an envelope system. In the envelope system you can choose specific categories of items. My wife and I do this for groceries, entertainment, and clothing. At the start of each pay period you simply place the budgeted amount in the envelope in case and that is what you use that month for that spending category. For a long time I really doubted using envelopes would make a difference for us. I was really pretty adamant that we were pretty careful with groceries and using cash envelopes wouldn’t really make a difference in what we spent. But I can tell you I was wrong. Using cash really did change the way we shopped. It really is true that you spend less when you use cash.
Coupons are good way to save money on groceries as well. Watch the sales flyers each week and try to stock up on what is on sale if possible. Get the Sunday newspaper. You’ll very likely find enough coupons to more than pay for the paper. Web sites like www.coupons.com, www.smartsource.com, and www.redplum.com are good sources of printable online coupons. If you are on Facebook you can like sisters shopping on a shoestring, crazy coupon lady, and money saving mom. Each of these will deliver great savings ideas to your Facebook feed. I’m not saying you need to be like the extreme couponers you see on TV buying $100 worth of groceries for $3.48. But we regularly save 25-30% on our grocery bill by spending just a little time each week doing this.
11. Your tax withholding.
Do you get a large tax refund each year? Many people are excited about that but it’s really not a good thing. What you really are doing when you get a large tax refund is lending the government some of your money at no interest so they can give it back to you in a lump sum check several months later. For example, if you get a $2400 refund, what you really did was pay the government $200 each month that you didn’t need to. That extra money can be a huge jump-start to getting your finances in order. If you get a large tax refund, consider talking to the HR department where you work and having them adjust your withholding. Just don’t get too carried away with that so that you end up owing a large tax bill because you are under paying. If you know about what size refund you typically get your HR folks should be able to help you appropriately adjust your withholding so that you can bring more of that money home.
12. Retirement/College savings.
Stop all retirement savings or other savings for a limited time while you are getting out of debt and building your emergency fund. This is not something that you want to do for a long period of time, but for a year or two it can give you a little extra margin that can get you over the hump and started down the process of getting healthy financially. Again I will emphasize this is a short-term item. You do not want to go years without saving for retirement. But in the short-term (1 to 2 years) it can help give you a little margin. Plus it adds a sense of urgency to your savings/paying off debt process. And if when you return to saving for retirement, you now have your debts paid off and have a healthy emergency fund you will then be in a much better position of strength to really put a focus on saving for retirement and other long-term goals.
I realize some of these steps aren’t pleasant. The idea is to make sacrifices in the short-term for a season of life so that you can get to a position of financial health. Then once there you will be in a position to enjoy some of the blessings God has given you, share some of those blessings with those in need, and live in a state of financial peace. The deeper you sacrifice in the short-term, the quicker you will be able to get to this place.
Those are just some ideas. You may think of others. Not all of those suggestions will apply in all cases but hopefully they will stimulate your thinking in finding ways to help you get started on this journey.