According to a study released earlier this year, nearly half of Americans are living paycheck-to-paycheck.
Have you ever wondered why your paycheck disappears the moment you bring it home?
Why you can’t get ahead no matter how hard you try? Or, why nearly every “surprise bill” sends your finances into a tailspin?
As that study shows if any of those questions describe your life, you’re not alone.
I can remember a time when “balancing my checkbook” was making an ATM withdrawal and checking my receipt to see how much money I had left. Hint: it wasn't a lot.
I lived that way for years until I finally realized that something had to change.
Chances are if you're reading this you recognize that something needs to change in your life to break the “living paycheck-to-paycheck” cycle”.
How to Save Your First $1,000 When You’re Living Paycheck-to-Paycheck
If you’re running out of money all the time, what you really need is a lifeline. For most people, breaking the paycheck-to-paycheck cycle involves a) earning more money, b) spending less money, or c) a little of both.
With a few simple strategies, you could even save up your first $1,000. While it would be nice to have a savings cushion for a rainy day, that's money you could use to cover surprise bills or bail you out in an emergency.
But, it all starts with you and the steps you take to change your life. Here are eight easy ways to start saving $1,000 when saving anything seems impossible.
#1: Open a targeted savings account – and earn bank.
Saving money is hard enough on its own, but it’s especially difficult when you don’t have a separate account just for savings. The good news is, you can set up a targeted bank account and actually get paid for doing so!
Currently, Chase is offering three different promotions that can help you save your first $1,000 with almost no work at all. With a Chase Premier Plus Checking account, for example, you’ll earn $300 as a new customer just for opening an account and setting up direct deposit.
Certain fees do apply to Chase accounts, but there are plenty of ways to bypass them. You can read more about Chase banking bonuses and how they work by clicking here or check out these other offers below:
#2: Earn money in your free time.
If you have any free time during the day or the evening, you could be earning small sums of money you can use to get ahead. While this probably sounds crazy, there are several online businesses that will pay you to take surveys or complete simple tasks using your home computer.
Once you sign up, you can usually earn $10 – $30 just by answering questions or rating products or services! Some companies will even pay you to watch videos or print coupons at home!
One of my personal favorites is Inbox Dollars. This website will pay you to watch videos, answer questions, and even surf the web.
Other companies I recommend include:
If you love the idea of earning quick money at home, check out my review of the 11 best online survey sites for more details.
#3: Stop paying crazy-high interest rates.
If you’re living paycheck-to-paycheck and trying to dig yourself out of high interest credit card debt, one simple solution can help you kill two birds with one stone. By refinancing your debts with a new card with a lower interest rate, you can save money on interest and lower your monthly payment. And since you’re paying less interest every month, you can get out of debt faster, too!
One of my favorite balance transfer credit cards is the Discover it. With this card, you’ll get 18 months with 0% APR plus 1-5 percent cash back on everything you buy. A balance transfer fee does apply, but the card will never charge an annual fee.
If you’re drowning under the weight of high interest credit card debt, consider giving a balance transfer card with 0 percent interest a try. You can read about the best ones here:
#4: Pick up a side hustle.
One way to change your lifestyle is to look for ways to earn more money. If you can’t get overtime or pick up extra shifts at work, picking up a side hustle could be your best bet.
The best hustles provide a decent income without too much hassle or stress. Hopefully, you can find a hustle that’s also flexible enough to let you keep up with your family and work commitments.
More from GFC, Below
One of the most flexible side hustles is driving for a company like Uber or Lyft. If you have a decent car and a smartphone, you can earn up to $20 per hour driving people around town or to the airport. Driving for a rideshare company is easy and stress-free, and it doesn’t require a big financial commitment, either.
Read our guide on how to get started with Uber here:
#5: Refinance your pesky student loans.
The average Class of 2016 graduate left school with more than $37,000 in student loans and correspondingly large monthly payments. Those monthly payments can eat away at your paycheck and make getting ahead that much harder.
Since you can’t discharge student loans in bankruptcy, they’ll never go away until you pay them off. The good news is, it may be possible to refinance your loans into a new loan with a lower interest rate and monthly payment.
While you may lose some federal protections if you refinance federal loans with a private lender, you could save a ton of money with a simple refinance. Visit SoFi to explore your options and see if refinancing will leave you better off!
#6: Lower your mortgage payment.
While it’s easy to assume your mortgage payment is set in stone, this couldn’t be further from the truth. Thanks to record low interest rates, now may be the perfect time to refinance your home loan and save a bundle of cash every month.
Imagine you have a $150,000 mortgage that lasts thirty years at 6 percent. If you count just principal and interest, your mortgage payment is likely around $899.
Now, let’s say you refinance your mortgage into a new thirty-year loan at 4 percent APR. Overnight, your principal and interest payment drops to $716. That’s more than $180 in savings every month!
Check out Lending Tree for instant refinancing offers that can help you save money and get out of debt faster.
#7: Download apps for cash.
Some apps will actually pay you just to download them – or to surf the web as your normally would. This strategy may not lead to a life-changing amount of money, but your earnings can definitely add up over time.
Here are a few apps I love:
- Ebates: Signing up for Ebates is an easy way to earn cash back for everything you buy online. Not only can you earn 10 percent back or more for purchases you make at online stores like Macy’s and Kohl’s, but you can earn free money for shopping at Walmart.com and Amazon.com, too. Score a quick $10 just by signing up through my link.
- Acorns: Acorns helps you save your own money by rounding up every purchase you make. Whether you’re paying bills or shopping, you can accumulate small sums of money over time. Over the long haul, your earnings can accumulate in a big way.
- Swagbucks: Swagbucks is another website that makes earning money online a piece of cake. Not only do you earn free cash for signing up and downloading the app, but you earn money for answering questions, surfing the web, and completing other simple tasks. It’s easy, and it’s free!
#8: Negotiate your auto insurance rates, and save big!
Most people assume their auto insurance is a fixed payment, but this couldn’t be further from the truth. Once you’ve been with a company for a while – even without any claims – they tend to raise their rates. If you fail to shop around every year or every few years, you could wind up paying a lot more for insurance than you need to.
As a financial advisor, I tell my clients to shop around for auto and even homeowner’s insurance at least one every year. In the worst-case scenario, you’ll find out the coverage you already have is an awesome deal. But, most of the time, you’ll find you can save money by switching providers without sacrificing coverage at all.
Start Saving Now….and Don't Let Anyone Stand in Your Way
While it’s hard to save up $1,000 when you’re living paycheck-to-paycheck, any of the strategies on this list can help you get there.
Imagine if you could find a way to save a few hundred dollars every month while also boosting your earnings. Over time, the little changes you make can add up in a big way!
There’s no “wrong” or “right” way to fix your financial situation, which is why anything on this list can work. Pick a few options on this list and run with them, and don’t let anyone impede your progress. The sooner you start working your way toward financial freedom, the better off you’ll be.