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How to Save When You are Strapped for Cash

So first, coming back to what we talked about in the budgeting segment, knowing your cash flow. So I want you to write your net take-home pay at the top of a piece of paper and then write out every single monthly expense that you have. I also recommend adding in a little bit of a buffer just because the first pass at this we usually forget something or it's always nice to have a buffer in there since things tend to be variable. Then you subtract your monthly expenses from your take-home pay and the left is your available money. Now, of course, maybe you got a positive number, great, easy to go for and figure out how to put money into savings. Well, let's be honest, some of the time we're seeing a negative sign in front of that available money because we have more going out than we have coming in. So now it's time to find where we can slash, but also how we can earn more. And I have a couple of different tips about ways that we can get that done. So first is this idea of finding places ...

to slash. You have to know the out flow. So running that cash flow is a very helpful part of it because now you know exactly where your money is going every single month. I also very much recommend doing tracking every penny again. I will talk about that a bit more in a couple of slides here, but writing down exactly how much and where you're spending your money so that you know where the flow is going. The first place to slash actually might not have felt natural as an idea at all, but ditch some ridiculous banking fees. Again, we are going to talk a lot about picking better financial products tomorrow, but I wanna throw that in here because one it could be as simple as paying an annual fee on a credit card that you might not need. That could be 95 bucks a year that that's money that can immediately be going back into your emergency savings fund can get you a tenth of the way to your $1,000 goal or it could be that you have a checking account where you're paying something like a monthly maintenance fee or an account minimum fee and if you don't have $1,500 every single day of the month in your checking account you're gonna have to pay $ to have that account. No, no, no, no. And the reason I say this is because $12 a month actually adds up pretty quick, especially when you're trying to route it towards other financial goals and also there are a lot of options for other accounts that don't charge you those kind of things. Again, I'm somebody that loves dealing with money and I don't on average keep $1,500 in my checking account. I would prefer that to be getting a better interest rate in my savings account. So I don't want you to be paying any really ridiculous nonsense fees. This is also a bit of a teaser into what we'll talk about tomorrow with picking better financial products, but that could save you about 12 bucks a month that you can now be routing directly into your emergency savings goals. Subscriptions. Kind of low hanging fruit on this conversation, but we definitely all have subscriptions that we do not use and are paying for. I think a gem for some people is what it is. I actually realized recently I love the show Billions on Showtime, but I don't have cable. Shocking I love a show about money. And so I was an Amazon Prime member so I signed up for the 8.99 monthly trial to get Showtime in order to watch Billions. I finished watching Billions, kinda forget to unsubscribe to Showtime so now every month I have been paying 8. that can easily just be going routed back into my savings account. So I really recommend going through all of your credit card statements and seeing if there are any monthly payments that you're making that maybe you don't need. Another thing that you can do, there are definitely some apps and digital options you can Google about looking up ways. They kinda go back through all of your accounts and kind of search for them for you or you by hand can go download. I would go a few months back on credit card statements in case there's an annual fee you might have missed that you don't need to be paying. But that's a way that you can put a few extra bucks a month into emergency savings. Yes. I think you're probably gonna cover this tomorrow, but just because we're already here. So like Bank of America does charge me $12 a month when I'm not over that threshold. Can I call Bank of America and say I'm going to cancel my account if you don't stop charging me this or is that just a fruitless conversation? You can give it a go. They might wave it once. The odds of them waving it forever when they're just getting an easy 12 bucks a month out of you and they do it to all their customers, I would say is probably slim to none. It doesn't hurt to ask. We're gonna get to that in a second, but it definitely does not hurt to ask. However, I would move to an institution that just isn't going to be charging you that. Another idea is to negotiate on existing rates. And so maybe that is your Internet provider. They love to sneak up like $10 every year. All the sudden it's like, oh you were paying 64 bucks, now you're paying 74 bucks 'cause you're not a new member. Get on the phone, give 'em a call and say hey I'm gonna switch to your competitor if you don't. And they might say no and then maybe the competitor gives you a promotional rate and you can switch. It takes a little bit of time, but that could save you some money. Also, the worse that they can tell you is no. So it's always worth getting in there and asking. And another reason is because it helps you practice your negotiating skills, which does get us into something I wanna talk about and that's negotiating your salary. This is one of the absolute best in quote unquote easiest ways to be putting more money back into your account in order to have more to put into your savings goals. And it should never just be about slashing and getting rid of things. It also really needs to be a conversation about how to earn more. And negotiating and learning how to do that is a great skill. It doesn't matter what your job is. Traditionally employed, freelancer, I don't really care, negotiating is a really good talent to have. I will encourage anybody who is self-employed to start having conversations with people who do what they do especially in their cities to start to find out what rates are and so you make sure that you're not undercutting yourself, underselling yourself. You want to really be open and transparent about that and if you work a traditional job, if you're comfortable, I recommend starting to ask maybe coworkers. It might be a little awkward at work, but if not coworkers, somebody who does a similar job to you at a similar sized company in your city and the reason I want it to be that (mumbles) down is because it's apples and oranges in a lot of cases. If you are working in public relations in New York City at one of the major PR companies, well you can't compare that to somebody who's working in a smaller city in the Midwest at a boutique agency. It's not gonna be the same type of salary. So you want somebody who does something similar to your title, similar sized company in your city. But start asking what do other people make. And start practicing how to negotiate. There are so many resources online that are free that you can practice. I also really recommend role playing if you wanna practice negotiating. So actually have someone sit across from you and pretend to be a boss or a client and kind of simulate the experience of doing it so the first time you go into the room you're not doing it cold. I want you to write out all of your different skillsets and kind of do the math on what those kind of jobs should be earning. And the number one piece of advise I have for negotiating, no matter your type of job, is have a success folder. Have a little folder that you keep on the desktop of your computer and every single time something goes well, so if you get praise from a client, if a coworker says something nice, if a project exceeds expectations, screenshot it and it put in this folder so that in the future when it's time to negotiate rates, you can easily go back in and say look at everything I've managed to achieve in the last year. Here's what I've brought to the company, here's the value add that I am bringing, so I believe I am worth X, Y, Z. And this is just one of the single best ways you can be increasing the amount of money that you have to be putting towards your savings goals because we do really in these conversations tend to over emphasize the cutting and I really want us to pivot and talk more about the earning. But that success folder can really help. And if you've had any sort of recent evaluation where maybe they gave you some constructive criticism, keeping track of ways in which you've improved so that you can actually demonstrate in a practical actual manner how you have improved instead of just saying, well I'm doing better. You wanna be able to demonstrate it. Get a side hustle. Such a millennial thing to be saying. But a lot of us don't ever just work one job anymore. Most people, no matter the type of job you do, you have a couple different streams of income. So there are various ways you can get a side hustle. Maybe you're great at crafting and there's something that you can sell. I know somebody even mentioned earlier getting rid of things that are in her house that she doesn't need anymore, so that side hustle of just selling things perhaps on Craigslist or eBay or what have you. Other ideas are things like being a pet sitter, a dog walker, babysitter, tutoring, working retail, especially seasonally. A lot of companies around the holiday season need extra hands so you can get some seasonal work, waiting tables, doing task rabbit, driving for a ride share or food delivery service. These are all sorts of different options that often can net you at least $100 extra dollars or so a month. Now, there's a big exchange of your time for the money, but if you're at a phase of life where you have some extra time and you need some extra money, here are some ways to do it. And then put that money directly into savings and that's a really great way to be boosting your emergency savings fund. I also like the idea of trying the cash diet in couple with the tracking every penny method for about two weeks just to see where things are going. For those of you who might not have tuned in for the budgeting section, just to kind of quickly recap. The cash diet is you run your cash flow, how much is coming in, how much is going out, the amount of money that you have left to spend in the month you take it out actually in cash and then you only spend in cash. Part of this is connecting with the psychological line of experience of putting that money across as opposed to just swiping a plastic credit card or a debit card. The other thing is you physically see the money dwindling down in your wallet, which will probably trigger something for you. Now, tracking every penny, what you wanna be doing is write down every time you make a purchase, not only how much it was, but more importantly what it was. Because doing that then enables you to go back and look at all the purchases you're making and look for mindless spending behaviors. And the other idea is maybe it's not a mindless spending behavior. Maybe it's something that you value, but maybe it's something you could also cut. And for 30 days, pick a month, challenge yourself, everyday this is either something that I spend money on weekly or daily and I'm gonna cut it out for 30 days and every time I have the compulsion to spend that money, I'm gonna immediately move that into savings. So it's just a little mind trick, hack. It doesn't have to be for long. 30-day challenge that could put a couple extra dollars, maybe even up to 100 extra dollars into your account. Now one thing I actually realize I didn't put it in here that I like is an idea of something called a susu club. This is, I believe it originates out of West Africa and some Caribbean cultures do it as well, where it's really an accountability type group where you get people together, so it could be like five people and every single month they put $20 in and one person gets to take the pot of money home. So you know that on your rotation, you're going to get $100 back. So it's like a forced savings club of every time you're putting $20 in, whatever amount your group agrees to and then one person in the crew gets to take that pot of money home. Now, there's a trust factor here. It needs to be a group of people that you know someone's not gonna run off with the money and not come back and contribute, but it is a way to just kind of have another accountability buddy method to this and it can also be sort of a social experience, as well. So again, if you're just looking for a different way to save that's one that I really enjoy. Reduce your student loan payments. But a big thing that I want you to think about is this could be a huge part of why you're struggling month to month is the amount that you are paying in student loans. So is there an opportunity for you to be reducing your monthly payment? Can you get on an income driven repayment plan? Could you look into refinancing? Is there a way to reduce the cost month to month? And then you can put the difference into saving or towards other financial goals. However, caveat being, if you do get on to an income driven repayment plan, keep in mind that's extending the life of your loan, so we wanna talk about interest rates. You are definitely adding money onto the overall cost, but it does give you some breathing room and maybe you just need that wiggle room for a year or two and then you can go back to aggressively paying it down.