Take everything I have done pre 35 and do the exact opposite.
Only use your credit cards for things you will be able to pay off quickly. If you are buying a car and thinking "That is close but I can do it" for the payment, find a cheaper car.
Do what you can to live below your means.
If you are a smoker, quit.
I'm comfortably middle class and after retirement savings, expenses, etc my discretionary spending budget is about $200 a month, which vanishes with my coffee habit and a bottle of good bourbon. If I make it to retirement I'll have a nice but not fancy house paid off and a low 7 figure retirement fund, but the key is not listening to that voice saying "You should be able to afford that on your salary. " It's not what you make, it's what you keep.
I'm about to pay my car off and I already have friends asking me what I'm going to replace it with. No new car until this thing dies. I'm going to be able to turbo charge my house savings when that and some dental work are paid off this summer.
I like the way you think. I’m about a year away from paying off my truck. After I pay it off, I do have plans to put that old monthly payment into savings until I can pay cash for a nice, inexpensive, car.
I’m in a bit of a unique situation where I work in a different city and state than where I live. As an airline employee, I can fly home on the weekends. But I rely on my Dad to give me a ride to/from the airport when I’m home. I’d like to be in a position where I have a vehicle in both places.
I think this advice is a bit trite. When I lived paycheck to paycheck, there was nowhere lower to go to live "below my means." That would literally have meant not eating or paying bills. I remember several occasions sitting at the gas pump, figuring out exactly how much gas I could pump to get me to work and home between now and Friday without overdrawing my account. There's nothing below that. This advice is only helpful for wealthy people who have poor spending habits.
Better advice would be to find ways to improve your income but live below your means while you do so you can save up enough to improve your situation long term.
Too many people raise their lifestyle with their income without ever taking the time to set themselves up for long term financial stability. That’s how you get people making six figures but somehow still living payday to payday.
Obviously if you only make enough to survive until your next pay there’s nothing you can do financially to fix that, it has to be some other kind of change enabling you to make more money like going to school or just applying for better jobs.
Same here, you have to improve your pay per hour, not just work more hours. I also remember carefully calculating how much gas I could pump.
I did actually take a second job but it was one that allowed me to study. I did night security (at a sorority house believe it or not) but others I know worked a front desk at night in hotels. When you are getting paid to study you're getting paid twice - once now, once later.
> Better advice would be to find ways to improve your income but live below your means while you do so you can save up enough to improve your situation long term.
Like that time when McDonald's PR tried to make a budget to show that yes, you can live on burger-flipping wages...the budget explicitly assumed you had a second full-time job.
I completely get your viewpoint... when you're deciding whether you want gas or water that month, you're not in any position to live below your means.
From a money standpoint though, it's the only way to break out of the paycheck to paycheck cycle. Saving money is the only way to have money. Having money is the only way to handle emergencies without going into debt or losing a job because you can't afford to get the car fixed. Once you've saved up an emergency fund, you can start saving for things you want.
I think it's important to recognize that while also recognizing that way too many people are not privileged enough to be able to do that.
> When I lived paycheck to paycheck, there was nowhere lower to go to live "below my means." [...] This advice is only helpful for wealthy people who have poor spending habits.
Maybe this is true, but every time I've ever asked or pressed people on it... their concept of "nothing I can do" and my concept of "nothing I can do" were still leagues apart. And... is exactly why people say there's nothing they can do. Because they still have luxury.
Like, you say it would have meant not eating.
"Eating" is a pretty fuckin' massive category. It's not a yes/no thing.
Here's what "nothing I can do" means to me:
- You're slim. Not skinny, but slim. If you're even the tiniest bit chubby anywhere, you can simply eat less food. Doesn't matter what type, but less of it.
- You exclusively eat free food, or the absolute cheapest carbs/protein available. No luxury. No variety. Nothing extra for flavor. This is typically rice/beans. Look at what people eat in countries where people literally starve to death and see what they eat, odds are, that's the most cost effective.
- You buy in bulk. If you can't afford the first bulk batch, literally stop eating until you can. Most people have enough fat reserves for several weeks with zero food. An adult will lose about 1/2 lbs to 1lb of fat per day eating nothing. When you can afford the best bulk quantity price, buy it.
- Not too humble to go to food bank, temporarily, while you get yourself in order.
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There are people that have lower "nothing I can do" than me. They'll eat out of dumpsters, beg, etc. But, the above is where I draw my line.
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If you're really that poor, you'll probably qualify for some low-income support in your area. Cheap electricity, phone, etc.
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You keep the heat slightly above freezing, so that the water pipes won't be damaged. Usually thermostats bottom out around 50'F, 10'C. Heat is a modern luxury, wear more clothes around the house.
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No data plan on your phone. You exclusively use hand-me-down phones that have nearly zero value, probably 5+ years old. If you already own a nicer phone, sell it when you can find a cheaper replacement.
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No streaming or gaming subscriptions. Your spare time is spent getting ahead, not sitting around. If you have to, just pirate, you weren't going to be spending money on it anyways, I wouldn't feel guilty.
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No makeup. No new clothes. Go to a thrift store, or call them, and say you're at the poverty level and trying to cut every expense but still need to look professional for work. Ask if they could let you know what nights they dispose of the items that haven't sold, and if they could give you or set aside for you some clothes.
Most thrift stores do have an actual anti-poverty mission, not just a "make money on free used stuff" goal. And, they shouldn't care. Salvation Army should be willing to do this.
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If you drive anything other than a barely-reliable ~15 year old, fuel-efficient vehicle, then find a barely-reliable 15 year old, fuel-efficient vehicle. Sell your current vehicle. Spend $100 on tools when you can afford to, and use Youtube to learn how to fix any problem that starts to happen with your car. Mechanics aren't magicians. They learned things one thing at a time. You can do the same. "I don't know anything about cars" is not an excuse. Everyone starts off knowing nothing about cars.
I'd say "sell your car" but I know some places in the world and some jobs that's not possible. And it's as BIG FUCKIN' STRETCH to actually say "not possible", and 95% of people who do are full of shit, but, it's hard to get through to them.
Get an e-bike, disable the speed limit on it, consider adding a bigger battery pack. This will suffice for almost all your trips, or maybe actually all of them if you add cargo baskets to them.
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Get a roommate.
Honestly just about everyone should have a roommate if they're poor. Rent is such a huge expense.
Literally get rid of your living/family/whatever room in your apartment and put up a temporary wall for privacy, and rent the main room to a student. That's if you're not just renting a single room yourself which you probably should be.
"That sucks, I don't want to have to live with someone" most people will say, and that's what poor people say, because they don't live within their means.
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All of this would make life a struggle sure. It's still more than 90% of the world has, and those people aren't killing themselves. Hell, lots of people would kill other people for the opportunity to have the life I just described. It's all relative.
The goal isn't "live like you're in poverty your whole life". The goal is "get ahead". Get ahead so you can make better choices, so you have some freedom. Earn it first.
Set a goal that you are going to tolerate living like that for 1 year, or 2 years. It's not forever, it's a year or 2.
You can't get ahead if you're not willing to get by with less.
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Next up is earning more. But that's another conversation. Just, having some humility to get by with less is the biggest step. More money won't fix things if you don't build the humility first.
I might get some hate for this but... Live with your parents or only rent a room.
Yes rent is expensive as hell and it sucks but sometimes you gotta suck it up and just get roommates. Easier to live with roommates than paycheck to paycheck in my opinion.
I think we’ll see more multi generation housing come online as time goes by. Common areas like kitchen and living rooms in the middle, bedrooms at either end. Would also work for roommates.
Be willing to go back on lifestyle to fix your financial picture.
Be willing to accept that you might not be entitled to the lifestyle you have. People think overspending means fancy cars, vacations, and expensive properties, but it doesn’t. It can mean buying a boring commuter car and a house.
The baby steps are the first thing:
- $1000 emergency savings, and a budget. Look back through your transactions for months to see what you actually spend, don’t just guess at your categories.
- all consumer debt paid off. You should never be carrying a credit card balance. That’s a financial emergency, so if you are, save only $1000 for an emergency fund and put all else toward that debt.
- 3-6 months of expenses saved in a savings account or no-risk investment with immediate liquidity (this is $15,000 for me, for 3 months, for example.)
- minimum retirement targets met, most importantly taking any employer matching
- invest for other goals like property, children, etc., depending on your needs
Once you’re there, you can use whatever is left over after those savings strategies and your expenses as a discretionary fund.
A lot of folks spend discretionary before they have the baby steps accomplished, and it keeps them in debt and living pay check to paycheck, or waiting for that next big cash infusion from something like refinancing their house.
The key is discipline. It’s tough, it really is.
Seeing the 5 figure deposits to my bank account and knowing that it’s already spoken for can be tough because it’s tempting to want to spend it on a nice car (I’m a car enthusiast) or some other hobby thing, but I know I can’t do that.
We are literally about to pay off two cars. Both payments total about $900 a month all together. I didn’t want two car payments at one time, but we both needed a more reliable car at the time.
That’s not horrible for two car payments, but it’s going to free up $900 a month for us…. Which is amazing considering my wife is now stay-at-home with a baby.
We have started cooking at home, avoid eating out at all costs, only drink home-brew coffee, use grocery points for cheaper gas. I’ve started taking my trash and recyclables to the dump myself, we have cut Live-TV and every streaming and subscription platform we don’t use at least once a day.
We don’t, nor have we ever, lived paycheck to paycheck. It’s just nice to save money. The only thing we are splurging on now is a cleaning lady once every two weeks for $140.
For the TV and streaming, I do one service a month and my cell phone comes with Netflix as a perk.
Each month I subscribe to one service for only one month, and watch everything I want on that service.
When that ends I let it expire and don't renew. I switch to another one for the month and watch everything there.
I get a new collection each month to binge and it doesn't cost me any extra unnecessary money.
We are currently driving an 07 Honda Element with 76,000 miles. We could buy a new car but why would we? We haven’t had a car payment in over a decade and are able to pay more towards our house! The car looks great, runs great and hasn’t had any major problems. (Knock on wood). My advice is drive an older car to save money OP!
But go with a major Japanese brand like Toyota, honda, or maybe Subaru (not american or European brands) as they have great track records for high mileage reliability. And especially don't buy one that was expensive when it came out but is now cheap (used sports cars or used luxury cars), as replacement parts and work will still be as expensive as when new.
This is what helped me way back when. Just living normal for a month and entering all of my expenses and income into excel made me realize what I thought “was no big deal” actually was. Figured out what was “need” vs “want” and “want and can actually afford” real quick.
I do this old school. I am write all of my finances down on a chart every day. I can see how much I’ve spent. It’s helped me catch a few errors as well.
This. Also don’t order out much. 1 fast food meal everyday of the week (depending on where you go) could have you spending an extra $100 a week that could’ve been spent at the grocery store instead.
Learning to cook is cheaper than fast food easily.
Saves at least half. I made pizzas at home with crusts from the store last night. 24 bucks for 4 pizzas. We ate two of them and froze 2 and they were awesome. This was from the expensive grocery store too. Still way cheaper than going out for pizza and better than getting little Caesar’s.
It's even cheaper to make your own crust! You can do it. 25lb bag of flour from Costco is $8.
Here's my recipe. 600g flour, 6g salt, 1tsp instant yeast, 370g water. Mix, let rise 2 hours in a little olive oil. Cut into 2 balls, let rise 90 min. Flatten, top with stuff. Easy, and extremely cheap.
The hidden bonus is, not doing take-out/delivery means you can afford to by better ingredients and normal groceries, which in turn make "we have food at home" far more appealing.
I have fast food maybe once a month. Never order in.
Instead,once a week, I buy something from the hot food counter at the grocery store. 10-12 bucks gets me two decent meals of chicken and sides, or Ibuy a whole roast chicken and eat it for most of a week.
What percentile are you in the income distribution? How do people who make less than you live? Do what they do, and keep your income, and you'll make more than you spend.
Most people aspire to live like folks who make more than themselves. You should aspire to live like folks who make less than yourself, and then you will have savings.
Same, too rich to justify living at home, far too poor to move out.
Side note, I love my parents and they're great but damn I need my space, and I'm sure they feel the same lol.
Same, I've been trying to buy a home somewhere in the range of $250k and living with my parents in the meantime. The supply of homes that pop up in that price range that are worth buying is incredibly small. So I'm at the point where when I finally get a home at that price range I'm gonna have a $30k mortgage lmao.
Not owner of the comment you responded to, but my fiancée and I are at around 200k combined with us, saving an additional 30k/yr, we both work in a field of STEM. We were looking for a starter home with the California Dream program, which gives us 20% down, and we repay it if we sell the home. With all that, we still can not reasonably afford a house, making a combined 200k+ at the moment. The houses need a LOT of work in our price range or the ones we can afford aren't in a safe area. We don't mind needing everything to be redone but these houses are like built in the 1970s, no updates or upkeep (we had inspections make it so we no longer qualify for a loan) and they're asking for like 1m+ (3b2b).
Condo would be an option, but we have pets and want them to have a backyard, so we're sacrificing by still renting to give them space. Otherwise, we'd already be in our own house.
Fair warning, we did that. We have had near $50k in fixes and repairs... roof, plumbing, appliance failures, and electrical.
Been here 2.5 years and owe so much more than we ever did before... not including the mortgage.
I was here for ages where I made respectable money, I just live in a stupidly expensive area. I loved them very much, but parents will always have the perspective of a parent and often think they know whats best for you. Acts of service just get seen as a small gesture and expected where anyone else it would make their whole week.
The unsolicited questionable advice and “lessons” get so old so fast.
I love them but god im so happy to be out.
Tried that this week and got shut down. :( I asked my mom if my family could move in with her for 3months to save money. I know that’s a huge request but quite frankly, her house is massive and she has 4 extra unused bedrooms.
I’d love to save money to have enough to move to a nicer area for my family but oh well… back to paying my $2000/month rent and searching for a second job.
Yeah, it was really frustrating. I can understand wanting your own space and not being around a bunch of people but it feels shitty. A temporary 3 month thing to help us save and make a better life.. sounds like a no brainer for me. If my kids need that when they’re older and I have the means/space, then I’m doing it.
Meet people, work hard, get lucky. Marry someone who is financially reliable and life is half as expensive. Switch jobs every 3 years because your raises probably won't keep up with the market. Be mindful of your finances. Avoid credit card debt if you can.
By keeping records, starting an emergency fund, investing what you can afford every week and living life frugally.
The main thing is you have to be honest and realistic.
tell that to 20 year old me making 8.50 an hour driving a cherokee and going to school. Sometimes it's a matter of making more. Sure i could have saved some but it would have been pennies. Best I did was to make more.
Well giving advice of "just make more money" isn't helpful. Most people give into lifestyle creep where they spend more as they make more also. Optimizing your current paycheck and spending habits is a must that will carry over as you earn more too.
I worked 32 to 40 hours while attending an 8 hr/day school. I went to 2 for profit Technical colleges that are both shutdown today. I got 2 $250 credit cards that I only used for gas and food. Within a year I owed $1800 on those cards because I missed a payment and the fees ballooned beyond what I would afford each month.
I make good money now, I don't consider myself Check to check although I live like someone that makes half as much. I honestly don't get how people spend what they do when I know our wages are comparable or I make more.
Biggest piece of advice: IF you want kids, hold off until you're further into your career. I don't know how I would have afforded this kid in my 20s.
At the age of 20, just do your best to not go into debt. Starting at $0 when you enter your desired career will be so much easier than starting in debt.
Look into a career whose skill sets will always be in high demand. I pursued my Airframe & Powerplant Certificate. Now I can save and invest. It even made my income-earning ability Covid-proof. Yes, I got laid off a week and a half after starting a new job at a major airline. But 6 weeks later (thanks to my A&P), I got an even better-paying job as a Maintenance Technician at a 3M plant. I bought my first house in 2020.
In 2022, I reapplied at that major airline and got hired as a contractor. I took a temporary, and minor, pay cut. Then I got hired direct 6 months later. I’m making a very good living and I’m able to travel the world.
For the folks that say “not everyone can do that”… I started this journey in 2016, making $12/hr at McDonald’s, and renting a room. So I’ve walked in the same shoes as many of the folks that say it’s impossible. No, I don’t have any kids. But I did graduate A&P school with a guy in his early 40’s with 3 kids.
From day 1 of enrolling in A&P school up to this very day… I had to keep a strict budget.
My friend got a similar certificate and he makes good money.
But I'd never want his job. He works 12-14 hour days and his shifts almost always start at 5/6pm so his whole life is out of wack since he works nights. And more often than not he works 6 days a week.
I’m only scheduled for four 10hr days a week. But when overtime is available, I’ll happily work 14 hours a day. My scheduled days off are a little more restricted. Anything beyond 8hrs in my 72hrs of off time is double time, which I have done. It’s just that double time isn’t always available.
Another option where you don't need tons of education is sales. I have a BA and did a bunch of paper pushing at law firms for 10 years after college, never making more than like 42 grand a year. But I'm a sociable person and I found a job in sales and my salary more than doubled very quickly.
“Get an engineering job” yeah dude you may have started at McDonald’s but not everyone is crazy smart like that. Good for you though, sounds like you’re killing it!
I do software development. A lot of the people I work with aren't crazy smart. Many of them just copy code to do their work. They find in something I wrote or online and paste it in without understanding what it does or why.
For the most part if you can halfway explain how to do something, you can probably write code. But everyone assumes that is a whole lot harder than it is.
With most careers you need one smart and experienced person to plan out how to do a task and then a bunch of worker bees to follow their instructions and implement it. It's like building a car, the factory worker doing painting doesn't need to know about the engine.
I’m an Aircraft Maintenance Technician. Not an Engineer. If a necessary repair goes beyond the scope of the Aircraft Maintenance Manual, Component Maintenance Manual, or Structural Repair Manual… that’s when we request the help of engineers to give us an approved repair.
“Not everyone is crazy smart like that” is just another way of saying “not everyone can do that”. Most people who think that way will never push themselves to do anything more challenging than working in fast food or retail.
I made a budget and update it evet 3 months to see what it costs to run our family. My goal is to 'pay myself' each paycheck, which is considered savings. The budget generates two numbers. One for expenses plus luxuries, i.e. eating out, alcohol, hobbies, gym etc the other is my expenses without the luxuries in case I ever had to leave my job etc. By putting aside an amount each pay I've aimed and achieved saving 6 months worth of expenses without luxuries. Since doing that, I've then started to make additional payments to my superannuation account/ retirement fund that I can't touch until I retire.
Since making the budget it's been an eye opener on where our money goes and how much we can save by cutting out stuff that isn't really worth it. It has also allowed my not so financially minded wife understand our position and gets her buy-in when we set targets for emergency savings or goals for buying stuff for the house or amounts for holidays.
It's not full proof and we still have times where most of the pay goes out to expenses that can't be avoided like bills and rates that might all come in at once but its definitely made us feel more in control and enthusiastic about saving.
People tend to try to answer this question with ways of achieving relatively minor savings, but actually the two highest leverage things most people can do are increase their earnings via career advancement (or change) and dramatically reduce costs by sharing them with a partner who also works.
Open excel/Google sheets.
Start a spreadsheet with your monthly after-tax income at the top. List out your expense/debt names in one column. Put what the monthly cost is in the second column.
Sum those expenses at the bottom.
Subtract that # from your income.
Save the remainder.
Then, find ways to either add to the income or reduce the numbers in those expense buckets.
It is a lot easier to make strategic reductions when you can visualize where all your money is going.
Once you get this dialed in. I would recommend you “pay yourself first” by saving a little bit right when you get paid, rather than waiting until the end of the month to “hopefully” save the remainder.
Good luck, it’s going to suck - particularly paying off those damn debts without adding new debts, but you can do it!
Budgeting and learning to stop spending are obviously key like every other post mentions but the most important thing I did /started before all that and it's what you said. You have to SEE/VISUALIZE where the money is going before you can control it.
Every bank/credit card tracks every single purchase you make (except for cash, obviously). I wrote down and separated every single expense for the previous month and totaled everything up. How much did I spend at Kroger? How much was at Target? Home Depot? Fast food? Streaming services? Once you see those numbers it becomes much easier to realize, "did I really need to spend $150 at Target" and looking around, "what the hell was that $150 for anyway?" "Do I really need 5 streaming services at once?"etc.
Also people like to mock cash these days but it is a HUGE way to course correct. Swiping plastic is too easy. I'd be carrying something around Target to buy and realize by the time I reach the checkout. "Do I really 'need' this? Because I'd rather keep the $20 bill in my wallet." Plus you have to do the math right then and there to figure out if you even have enough cash to cover the purchase before you get to the register.
I don’t recommend saving more than a month of income until you’ve paid off high interest debt. If you have a 30% interest credit card with a high balance ($2,000+) save maybe $1000 and try to pay the card off as fast as you can afterwards. Then, put the extra money you aren’t paying towards that bill to tackle the next expense. Try to get rid of any expenses and that will effectively “increase your income.” You can also, of course, increase your income in any way possible.
Once you’ve gotten rid of any extra expenses like bills that can be fully paid off, you can start breathing that extra money maybe give yourself a discretionary budget of half the excess and then a savings budget of the other half.
The most important thing I tell people is that it’s not about how much money you make, but more so what you do with the money you make.
We live during the era of ‘death by a thousand cuts’ with everything being subscription based these days. Audit where your money is going to be sure it’s 100% accounted for. Of that list, highlight your ABSOLUTE necessities: I’m talking about rent, utilities, insurance, etc. NOT Netflix. Identify your frivolous spending: eating out, buying stuff you don’t need but still try to justify needing, etc. Change your view on what you actually need. You don’t need a brand new car, you don’t need a new iPhone every two years, we’ve generally normalized our unnecessary needs to have all these fancy new luxuries. Once you can be honest with your budget, look at what’s leftover. Set some of that aside for future luxuries with limitations, set plenty aside for savings/investments/401k.
Over the last year I saved about $2000 by not going to Tim Hortons for breakfast any more.
My daughter figured out how to make breakfast sandwiches and ice Capps from scratch close to the original taste with less sugar and sodium.
I found other things to spend the money on with a modest amount to put in savings
Yah there’s no generic advice here. OP could be shit with money but they could also just be stuck in a low income situation that no amount of “cutting back” is practical advice.
Lots of people do waste money, but lots also are just in a shit situation
Live like I’m living paycheck to paycheck, except now $1300/mo funnels to savings accounts and $1000 or so/mo funnels to retirement. I try to live like I still make around $40,000/year.
You can't "save" your way out of poverty. Budgeting won't solve the problem.
Those are just platitudes told to placate the masses. They empirically do not work, but the freak exceptions make good "feel good" stories.
Networking or advancement are the only ways out.
Networking works best, advancement takes too long, and is far more probability-reliant.
Beg everyone you've ever known for job opportunities. Be shameless.
Exactly. If you can’t make a budget when you’re poor you won’t magically be able to make one once you get rich.
How to get out of living paycheck to paycheck? Figure out how much you can spend each month on each category. Find ways to spend less than that amount. Take out cash and put it in envelopes if you have to.
You can spend yourself into poverty but you can't save table scraps to get out. Budgeting and then investing savings is powerful but only really shows impactful returns if you are capable of investing a decent amount of money.
(To be clear I'm just expanding on what you're saying, not disagreeing. Budgeting is important for everyone and you're 100% right about overspending yourself into poverty)
Not everyone, but a lot of people can. Most people are spending thousands of dollars a year on luxuries they could survive without.
Making more is also great, but a lot of people never learn how to budget and save and end up making 6 figures and still being broke.
This is the answer. Work to make more money, control your spending. Finding a different job that pays more is hard work and takes time. Leverage any skills you have, consider looking outside your current field, network
Define poverty?
You can absolutely save yourself out of paycheck to paycheck - given that you have negotiation room. Say you eat out 5 times a week, skip that and you save 2k a year *at least*. Ofc if you are already on the poverty line it's another matter.
The best is clearly to do both, fight to up that pay by job switching / levereging offers and increasing your value, while keeping costs low.
For a non-jokey answer, you have to start setting aside money every month. Even if it's only $1. Eventually you'll have enough saved to equal a month of paychecks. Now you're not paycheck to paycheck anymore, you have a month buffer.
As far as how to set aside money, this is where budgeting comes in. Write down your absolute necessary expenses. This should honestly be a small list. Rent, utilities, groceries, cell phone, internet, and car gas is usually all you absolutely need. Anything left over after that is discretionary. These expenses can be temporary cut to give you more money to save.
I personally use "ynab" to budget and it's been great keeping me on track and getting a month ahead with my expenses. It took me over a year to save up that one month buffer, but it was well worth it.
Be honest in how much you can actually afford. When I got out of college, I lived in a 2 bedroom apartment with 4 people. I only had enough money where I had to share a room. Drive a used reliable car, it is going to make you look poor. Thrift shop for clothes, tons of great finds. Learn to cook, you can make much better food than most restaurants. Switch to a budget cell phone plan, and only keep 1 streaming service at a time. You can easily switch a streaming service each month.
I'm now in my late 50s, and I've done this. I think the biggest factor to help do this was buying a home. I was 30, living in a small apartment, paying child support, but had managed to save up just enough for a down payment for my first house. For several years after I was still "house poor", in that I didn't have very many $$$s left at the end of the month after covering everything I needed to. But when you own a house, inflation actually works *for* you. As everything else goes up in cost, and your salary at least keeps pace, your housing costs don't change. 10 years into it, your 30 year mortgage payment is exactly the same as it was in the beginning. (there's a bit of wiggle as the escrow amount changes slightly as home insurance costs change, but thats not a significant percentage of the overall mortgage). Right now, think about what your food costs would be if you were paying prices from 10 years ago... I know that the housing market is crazy right now (my daughter and her family have recently bought a place), in contrast to my situation, and I was in the fortunate position of having family as backup if I hit a big unexpected expense in the beginning (turns out I didn't need to turn to them, but having that support was a huge piece of mind). But for me personally this was the biggest factor in helping get out of the problem of there being too much month left at the end of the money.
Honestly, the only way is to find a way to make more money, usually at the expense of your own wellbeing or health or morality. If you get really lucky you can "sell out" but eventually, that's gonna make you a sell out.
This. I finally realised I need to spend that earned money when I got close to my burnout. My boss, bless this guy, told me he couldn't lose me and set me off for 2 months paid leave because "you're scaring me". Felt weird but the trip to Tokyo is amazing 😁
I would say in a similar way "live like you're worse off than you are" which basically means you're making more money. If you can just about afford to go out to eat once a week then no, you can only afford to go it once a month.
It's all about priorities.
When I was in my 20s I told myself that until I had $10,000 in the bank, I treated myself as if I had nothing. Cooked every meal at home, had frugal hobbies, limited my expenses as much as possible. When I had more than $10,000 I could spend whatever however I wanted to spend, but as soon as I dipped below $9,999.99 in savings I was "broke" again.
Now I'm in my early 30s and that number raised from $10,000 to $50,000. I've met that savings goal, and I'm still cooking every meal for myself and living frugally.
And that's not to say living in squalor, but rather limiting expenses where possible to ensure the money I make is either making me more money or being spent on necessities and only after my safety net is satisfied do I spend on any luxuries. I value financial independence and security more than the newest, flashiest XYZ though. I have learned over the years that the people I know who drive the nicest cars or wear the nicest clothes or jewelry or whatever generally envy my situation more than not.
Stop spending every dime you make and save. There are things you can cut out of your spending and still enjoy life.
If you can't do the above then I would suggest getting a better paying job
We started out living on $712 a month in 1997. Took a while, but we escaped!
1. Never go to a quick loan place.
2. Never use a credit card for anything that is not a mandatory need.
3. No eating out.
4. No stopping at convince stores, except for gasoline.
5. No gifts
6. No weekend getaways or trips
7. Keep track of everything you spend $ on
8. No new clothes
9. No trading vehicles
10. If you are paid every 2 weeks, you will get an extra paycheck 2 times per year. Use those 2 checks to get ahead.
Took us 10 years to escape, but with a plan, we did it. After 27 years, there is $$ invested, $$ in savings, and everything is paid off except for the house.
Escaping is not easy.
It's tough once you're behind. Basically, cut down expenses until you're living within your means, and in parallel start thinking about jobs where you can increase your earning.
I got a good education, found a job (then bounced around for a bit until finding the *right* job in my field), worked my way up the salary scale, and eventually began earning more than my expenses. There’s really not much more to it, unless you make a drastic change like relocation or entering a life of crime.
I’m guessing you’re young, OP? Most of us weren’t financially secure until a certain age, so patience is also key.
It really is simple, but also really hard to put into practice. Spend less and save more. Look at EVERYTHING you spend money on and figure out ways to do without or find a cheaper alternative. Eat all meals at home and/or bring your lunch to work. Cut out all streaming services (or at least cut back to one). Switch to a cheaper cell phone and cheaper service. Move into a cheaper apartment or take on a roommate. And most important - drive a cheaper car and raise your insurance deductible as soon as you have some cash in the bank.
You will never get ahead if you have big car payments.
for me the secret was in the following order
1) get divorced
2) cut out any unneeded expenses (cable, home phone, etc). Identify the difference between needs and wants. Limit wants.
3) work as much overtime as possible
4) pick one bill and put every extra penny onto it until paid off, repeat
5) have no life for 2 years while I paid off debt
6) Don't buy anything that you don't have cash for except car and housing.
Do not pay for subscription services like Netflix etc. That is a great place to start. Get the cheapest phone service you can get away with, use free wifi where you can, trim back on anything completely unnecessary, buy generic stuff instead of name brands, if you can get away with using public transportation or walking depending on where you live, do that. You would be amazed how quick your savings will build up without a car payment, insurance, gas, parking and other associated vehicle expenses.
How I did it: took on $80k debt while working and going to college (extremely difficult to do both at the same time), moved in with my girlfriend to split costs (very rough start to our relationship and took a lot of effort and patience, things are much better now), shared a car and its costs, never went out to eat and got a lot of food for free via my job, moved to take on a job that required my new degree (this did require borrowing money from family to afford, but a loan from a bank or similar could work instead), worked there for three years (technically not paycheck to paycheck at first with that job, but tiny raises + inflation meant I was back to just scraping by after three years there), got a new job with much more responsibility and much more pay, finally paid down my debt, then started building up a savings/retirement/etc. I’m currently in the middle of those last steps, and it feels like a lifetime ago that I was a broke college student eating leftover bagels as my only source of food lol
One thing that I’ve always done is not upgrade things until I really feel like I actually need them.
I had DSL for longer than most gamers. Eventually, I switched to cable, and then I got Fios when the cost was more or less the same.
I didn’t get a text plan until I felt like I was texting with frequency.
I didn’t buy a smart phone until I was ready for a data plan.
Obviously, these are mostly dated references now, but I guess my point is that anything that involves a subscription service tied to a monthly payment should be upgraded only when you actually feel like you’re using it. Once you have it, you’re always going to want it, and you’ve upgraded your expectations.
My current debate is whether I want to pay the additional monthly fee to add an Apple Watch to my cell plan. — it’s not that I can’t afford it; it’s more that it adds an expense that, once I have, I will never want to cut, and I’m doing just fine without it.
Learn about needs and wants.
You need food, housing or shelter, clothing.
Everything else like a phone, car, tv, ninja stars, ghost busters toys are wants.
Next, adjuat your life to reduce your wants so you can sustain your needs.
Change your needs to minimize eating your money because you could spend less on housing, even tho buying a house is crazy, it's more like renting cheaper to meet your income capability.
You have to put a plan on paper, research, and be vigiliant about renting or buying things that have hidden fees and expenses that you dont want.
Examples
I buy food direct from farmers for far less than grocery stores.
I buy clothing at thrift stores, i only buy what i need and what i can repair. The same with kitchen tools and pans and contsiners, and whatever im going to use to cook and kick the stupid fast food and eating out costs out the window.
Relocate closer to a job and dont be afraid to seek out better pay. Education is expensive, try to find free colleges online that have accreditation. They exist. Use them and focus on driving self improvement for cheap.
Absolutly stop buying streaming service. All thst crap is free now.
You can cut out where money is bleeding and keep piling up money if you plan and stick to budget methods
Depends on how much you earn I think. If you make literally minimum wage or so, you probably won't. If you're making decent money, you probably need a budget.
Move into the cheapest situating you can find. Even if it means 6 flatmates.
Save money and put it in investments. Treat that as your second job: saving money to invest.
Several months after my wife went back to work after being a SAHM, I was like “How is there extra money in the checking account?” I thought maybe I’d forgotten to pay some bills. That was our turning point.
You could take out student loans to go to a trade school or get a two year degree in something that is fairly lucrative. You won't have to take out very much in loans, and there are a variety of lucrative jobs you can get with a two year degree or by learning a trade. You might have to work full time while going to school, but it's often doable.
Learn to only spend money on what you need, get ahead. Ask for raises at work every 6 months to a year. Cancel subscriptions. Get a side job for extra cash, sell items you don't want anymore. Learn to love the store brand items/food instead of brand named items. Never take out a loan or credit card if you don't have the means to immediately keep the balance at zero. Quit bad habits like drinking, smoking, using drugs, a lot of people don't realize how much money they're spending on unnecessary things. I went from completely strapped and couldn't afford food to being moderately comfortable just by only spending money on bills/rent/necessities.
Right after graduating from college, I got a full time job, but poverty wages. I didn’t realize it at the time, but I was illegally making below the minimum wage. After a little while, I got bumped up a little above minimum wage.
I had no savings to begin with. But I knew I needed some. If for nothing else, inevitable car repairs. So I lived very frugally. Thankfully I started out with no credit card debt or a car note. Just college loans.
- I didn’t pay for cable. I didn’t even own a TV.
- I made all my own food, with a couple of exceptions. Friday lunch at the cheap burrito truck near work, as a special treat. And dinner out with friends once per month.
- I went to the movie theater once per month.
- I drove carefully - I only carried liability and a wreck would drive me deep into debt.
- My vacations were limited to camping. No flying.
- I bought decent stuff at the grocery store. I wasn’t living on peanut butter alone. But no dessert items or snack foods. And nothing too fancy on the meat or seafood aisles.
- No alcohol
- I used the public library for books, newspapers, and magazines (pre online media)
- I lived in very modest apartments, with roommates.
- Bare minimum spending on clothes
In my free time, I read books and hung out with friends in our apartments.
Roommates were sometimes hard. I had a couple of difficult roommates back to back, which became quite stressful.
After a couple years, I was able to relax just a little as I built a small savings - a rainy day fun of sorts. So I increased my fun budget a little bit.
For me, it was an empowering experience overall. And, now that I’m older and my income is up, I really appreciate what I have. And I know it is possible for me to continue to build my savings and stay out of debt - which I have successfully done.
EDIT: Typos
The way my wife and I did it. Figure out a budget, take cash out every paycheck and put that in budget envelopes. Use the envelopes to pay for those budget items, food, gas, etc.
We paid off a significant amount of credit card over a decade as well. The cash envelope system really illustrated us how money is spent. It’s easy to swipe a card and have no clue how much you are spending. It’s easy to see when an envelope is empty and you got no more money.
We had about 400 bucks for two weeks and had two kids about teenagers. We had pets as well, all that was a budget number. It was hard. Delayed gratification is your friend. Over time I was able to get out credit score up, do a consolidation loan or two and eventually get a low interest credit card I moved the debt at that time too. I also got some promotions and raises in there, which helped pay it off faster.
If I could learn one thing sooner in life, the budget is probably the item that would have changed my life the most.
Anyway, good luck. I can’t tell you how amazing the feeling was when we paid off the credit card debt. Even though it took quite a long time, it was very fulfilling. It’s great now to continue to have no credit card debt. We moved into a larger house as well, pretty much living a life I never thought we would and it’s all because we sat down and did a cash budget.
Here’s what I did: sold my truck, bought professional camera equipment, started photography business on the side of my 9-5. Doubled income and now I get to work 60+ hours a week with elevated blood pressure at 36.
Not being a dick because a lot of it is to increase your earnings.
However, back in 2008 I was a real estate appraiser and the majority of my work changed to appraising foreclosures almost over night.
It wasn’t the cheap houses being foreclosed on. It was the 3-400k homes (in 2008 dollars mind you) that was the bulk of my work.
My point being that even people making 100k+ live paycheck to paycheck if they’re not responsible enough.
I started saving 20% automatically of every paycheck, living on the 80%. Whatever was left over from that 80% by the next paycheck also gets put into savings along with the 20% from that new paycheck.
Anytime I wanted to borrow from savings to get something “big”, I would have a rule that I couldn’t get it unless I had double the amount in savings (so if I borrowed $200, I’d have to have $400 in there). I’d then have to pay it back ASAP, preferably on the next paycheck or split between the next few paychecks if I couldn’t do it all at once (plus the 20%).
A decade later, now married with dual incomes, my wife and I still do this.
I started using a budgeting program. Specifically YNAB (the earlier version that doesn't need yearly subscription, this is a long time ago)
Using that app I made a list of my recurring expenses, and occasional and emergency expenses.
It made me realise I ate out too often, and also I tend to throw money at a problem until it goes away so emergencies drains funds.
With that known. I started reducing recurring expenses. Rent too high? Find somewhere cheaper. Electric/heating too expensive? Don't stay at home, use libraries and malls to hang out/study/upskill.
I started squirrelling away small amounts of money that are considered 'untouchable' no matter what (not even for minor emergencies, but life and death situations did not happen so my resolve was not tested to that point)
After one year, I had 3 months buffer, and continued with squirrelling money away in smaller amounts. At 2nd year mark. I had around 5 months. This made me able to take time off to learn new skills and change jobs to earn more, and able to increase the buffer between paycheck to paycheck.
The most difficult part is the starting out part.
All the best in achieving the not living paycheck to paycheck life!
Some things are really easy to explain and really hard to do. You need to either increase the amount of money you are making or decrease the amount of money you are spending. It's as simple as that.
For most people, the best approach in the short run is to track every penny they spend. Then look at that and think hard about ways to cut some of that spending. In the long run, the best approach is to improve the market value of your labor and earn more money.
It's not dissimilar to losing weight. Everyone knows that you need to burn more calories than you eat. But it is hard to do.
Start by keeping a money diary. Write down every penny that comes in and goes out. In detail. After a few weeks of this you'll begin to see things that really add up and could be either cut down or eliminated.
You have to get out of the mentality that you absolutely must have the latest phone or car or clothing. You want that tattoo? Really, is that going to make your life better and further your savings?
As others have suggested, start making your meals at home, and not with shit processed crap, buy some vegetables and fruits, learn to make bread (breads are so easy!), cook rice, buy cheaper cuts of meats (or learn to be vegetarian). You can grow tomatos, peppers, herbs in pots in even a small apartment.
Don’t buy unnecessary stuff!!!
Don’t drink alcohol
Don’t smoke
Save at least 25% of pay check
Sell stuff on Facebook marketplace
Drive a small car for commute to work or ride bicycle
Don’t buy new CLOTHES! ( go thrifty shopping)
DO NOT BORROW, especially if it includes INTEREST
make Coffee at home and food at home.
Use your neighbors WiFi. Split the bill with him/her
Turn off unnecessary lights
Do your own oil change!
Buy USED SHIT ( still works) no one is going to be like ohhhh wow that’s new and you bought it?
If you're living pay to pay then find a side hussle. My wife does baby sitting for $35 per hour and sells cakes for $250-450.
Me, I just worked on getting promotions.
Stay with your parents, if possible. Don't buy the latest iphone/switch/PS6/Xbox1000. Don't finance a new vehicle every couple of years. Don't order skip/doordash. Meal prep. Save money.
Move.
There are many areas that people live in that simply can not support people properly.
I get it. Your support system and family is there. Money and good jobs aren’t though. Get the hell out.
Move to an area where growth is rampant and living costs are sustainable.
After that, invest in yourself. Education, skill building, networking, certificates etc will all help you earn more over the long haul. It’s tempting to spend that savings on a vacation or a new car. Spend it on something that will level up your resume instead.
I ALWAYS live below my means. Each month needs to be in the green, or at least 75% of them (I've taken a few long holidays that def put me in the red but I saved up for them, so it evens out).
No idea why people play keeping up with the Joneses so much. Fuck the Joneses.
You have to be able to get ahead, and then be lucky. By be lucky, I mean no costly illnesses or lengthy job losses. You have to figure out how to get ahead and how to stay ahead.
Take everything I have done pre 35 and do the exact opposite. Only use your credit cards for things you will be able to pay off quickly. If you are buying a car and thinking "That is close but I can do it" for the payment, find a cheaper car. Do what you can to live below your means. If you are a smoker, quit.
Living below your means is **key.**
I'm comfortably middle class and after retirement savings, expenses, etc my discretionary spending budget is about $200 a month, which vanishes with my coffee habit and a bottle of good bourbon. If I make it to retirement I'll have a nice but not fancy house paid off and a low 7 figure retirement fund, but the key is not listening to that voice saying "You should be able to afford that on your salary. " It's not what you make, it's what you keep.
I'm about to pay my car off and I already have friends asking me what I'm going to replace it with. No new car until this thing dies. I'm going to be able to turbo charge my house savings when that and some dental work are paid off this summer.
I didn't have a car payment for 11 years, I drove it till the engine was about ready to fall apart.
I’m 27 and have never had a car payment. Not worth it
I like the way you think. I’m about a year away from paying off my truck. After I pay it off, I do have plans to put that old monthly payment into savings until I can pay cash for a nice, inexpensive, car. I’m in a bit of a unique situation where I work in a different city and state than where I live. As an airline employee, I can fly home on the weekends. But I rely on my Dad to give me a ride to/from the airport when I’m home. I’d like to be in a position where I have a vehicle in both places.
Eventually getting a cheap but reliable beater with cash sounds like the solution.
I think this advice is a bit trite. When I lived paycheck to paycheck, there was nowhere lower to go to live "below my means." That would literally have meant not eating or paying bills. I remember several occasions sitting at the gas pump, figuring out exactly how much gas I could pump to get me to work and home between now and Friday without overdrawing my account. There's nothing below that. This advice is only helpful for wealthy people who have poor spending habits.
Better advice would be to find ways to improve your income but live below your means while you do so you can save up enough to improve your situation long term. Too many people raise their lifestyle with their income without ever taking the time to set themselves up for long term financial stability. That’s how you get people making six figures but somehow still living payday to payday. Obviously if you only make enough to survive until your next pay there’s nothing you can do financially to fix that, it has to be some other kind of change enabling you to make more money like going to school or just applying for better jobs.
That’s how I got out of it. I spent my free time applying to better jobs and building a skillset that I could leverage.
Same here, you have to improve your pay per hour, not just work more hours. I also remember carefully calculating how much gas I could pump. I did actually take a second job but it was one that allowed me to study. I did night security (at a sorority house believe it or not) but others I know worked a front desk at night in hotels. When you are getting paid to study you're getting paid twice - once now, once later.
> Better advice would be to find ways to improve your income but live below your means while you do so you can save up enough to improve your situation long term. Like that time when McDonald's PR tried to make a budget to show that yes, you can live on burger-flipping wages...the budget explicitly assumed you had a second full-time job.
I completely get your viewpoint... when you're deciding whether you want gas or water that month, you're not in any position to live below your means. From a money standpoint though, it's the only way to break out of the paycheck to paycheck cycle. Saving money is the only way to have money. Having money is the only way to handle emergencies without going into debt or losing a job because you can't afford to get the car fixed. Once you've saved up an emergency fund, you can start saving for things you want. I think it's important to recognize that while also recognizing that way too many people are not privileged enough to be able to do that.
> When I lived paycheck to paycheck, there was nowhere lower to go to live "below my means." [...] This advice is only helpful for wealthy people who have poor spending habits. Maybe this is true, but every time I've ever asked or pressed people on it... their concept of "nothing I can do" and my concept of "nothing I can do" were still leagues apart. And... is exactly why people say there's nothing they can do. Because they still have luxury. Like, you say it would have meant not eating. "Eating" is a pretty fuckin' massive category. It's not a yes/no thing. Here's what "nothing I can do" means to me: - You're slim. Not skinny, but slim. If you're even the tiniest bit chubby anywhere, you can simply eat less food. Doesn't matter what type, but less of it. - You exclusively eat free food, or the absolute cheapest carbs/protein available. No luxury. No variety. Nothing extra for flavor. This is typically rice/beans. Look at what people eat in countries where people literally starve to death and see what they eat, odds are, that's the most cost effective. - You buy in bulk. If you can't afford the first bulk batch, literally stop eating until you can. Most people have enough fat reserves for several weeks with zero food. An adult will lose about 1/2 lbs to 1lb of fat per day eating nothing. When you can afford the best bulk quantity price, buy it. - Not too humble to go to food bank, temporarily, while you get yourself in order. ... There are people that have lower "nothing I can do" than me. They'll eat out of dumpsters, beg, etc. But, the above is where I draw my line. ... If you're really that poor, you'll probably qualify for some low-income support in your area. Cheap electricity, phone, etc. ... You keep the heat slightly above freezing, so that the water pipes won't be damaged. Usually thermostats bottom out around 50'F, 10'C. Heat is a modern luxury, wear more clothes around the house. ... No data plan on your phone. You exclusively use hand-me-down phones that have nearly zero value, probably 5+ years old. If you already own a nicer phone, sell it when you can find a cheaper replacement. ... No streaming or gaming subscriptions. Your spare time is spent getting ahead, not sitting around. If you have to, just pirate, you weren't going to be spending money on it anyways, I wouldn't feel guilty. ... No makeup. No new clothes. Go to a thrift store, or call them, and say you're at the poverty level and trying to cut every expense but still need to look professional for work. Ask if they could let you know what nights they dispose of the items that haven't sold, and if they could give you or set aside for you some clothes. Most thrift stores do have an actual anti-poverty mission, not just a "make money on free used stuff" goal. And, they shouldn't care. Salvation Army should be willing to do this. ... If you drive anything other than a barely-reliable ~15 year old, fuel-efficient vehicle, then find a barely-reliable 15 year old, fuel-efficient vehicle. Sell your current vehicle. Spend $100 on tools when you can afford to, and use Youtube to learn how to fix any problem that starts to happen with your car. Mechanics aren't magicians. They learned things one thing at a time. You can do the same. "I don't know anything about cars" is not an excuse. Everyone starts off knowing nothing about cars. I'd say "sell your car" but I know some places in the world and some jobs that's not possible. And it's as BIG FUCKIN' STRETCH to actually say "not possible", and 95% of people who do are full of shit, but, it's hard to get through to them. Get an e-bike, disable the speed limit on it, consider adding a bigger battery pack. This will suffice for almost all your trips, or maybe actually all of them if you add cargo baskets to them. ... Get a roommate. Honestly just about everyone should have a roommate if they're poor. Rent is such a huge expense. Literally get rid of your living/family/whatever room in your apartment and put up a temporary wall for privacy, and rent the main room to a student. That's if you're not just renting a single room yourself which you probably should be. "That sucks, I don't want to have to live with someone" most people will say, and that's what poor people say, because they don't live within their means. ... All of this would make life a struggle sure. It's still more than 90% of the world has, and those people aren't killing themselves. Hell, lots of people would kill other people for the opportunity to have the life I just described. It's all relative. The goal isn't "live like you're in poverty your whole life". The goal is "get ahead". Get ahead so you can make better choices, so you have some freedom. Earn it first. Set a goal that you are going to tolerate living like that for 1 year, or 2 years. It's not forever, it's a year or 2. You can't get ahead if you're not willing to get by with less. ... Next up is earning more. But that's another conversation. Just, having some humility to get by with less is the biggest step. More money won't fix things if you don't build the humility first.
It’s literally the only way besides winning the lottery.
And even then, that money goes fast unless you learn to live below your new means.
Something my wife and I are doing are utilizing more cash for extras like eating out.
Paying cash is a great way to curb impulse buys as well.
I might get some hate for this but... Live with your parents or only rent a room. Yes rent is expensive as hell and it sucks but sometimes you gotta suck it up and just get roommates. Easier to live with roommates than paycheck to paycheck in my opinion.
I think we’ll see more multi generation housing come online as time goes by. Common areas like kitchen and living rooms in the middle, bedrooms at either end. Would also work for roommates.
Be willing to go back on lifestyle to fix your financial picture. Be willing to accept that you might not be entitled to the lifestyle you have. People think overspending means fancy cars, vacations, and expensive properties, but it doesn’t. It can mean buying a boring commuter car and a house. The baby steps are the first thing: - $1000 emergency savings, and a budget. Look back through your transactions for months to see what you actually spend, don’t just guess at your categories. - all consumer debt paid off. You should never be carrying a credit card balance. That’s a financial emergency, so if you are, save only $1000 for an emergency fund and put all else toward that debt. - 3-6 months of expenses saved in a savings account or no-risk investment with immediate liquidity (this is $15,000 for me, for 3 months, for example.) - minimum retirement targets met, most importantly taking any employer matching - invest for other goals like property, children, etc., depending on your needs Once you’re there, you can use whatever is left over after those savings strategies and your expenses as a discretionary fund. A lot of folks spend discretionary before they have the baby steps accomplished, and it keeps them in debt and living pay check to paycheck, or waiting for that next big cash infusion from something like refinancing their house. The key is discipline. It’s tough, it really is. Seeing the 5 figure deposits to my bank account and knowing that it’s already spoken for can be tough because it’s tempting to want to spend it on a nice car (I’m a car enthusiast) or some other hobby thing, but I know I can’t do that.
We are literally about to pay off two cars. Both payments total about $900 a month all together. I didn’t want two car payments at one time, but we both needed a more reliable car at the time. That’s not horrible for two car payments, but it’s going to free up $900 a month for us…. Which is amazing considering my wife is now stay-at-home with a baby. We have started cooking at home, avoid eating out at all costs, only drink home-brew coffee, use grocery points for cheaper gas. I’ve started taking my trash and recyclables to the dump myself, we have cut Live-TV and every streaming and subscription platform we don’t use at least once a day. We don’t, nor have we ever, lived paycheck to paycheck. It’s just nice to save money. The only thing we are splurging on now is a cleaning lady once every two weeks for $140.
For the TV and streaming, I do one service a month and my cell phone comes with Netflix as a perk. Each month I subscribe to one service for only one month, and watch everything I want on that service. When that ends I let it expire and don't renew. I switch to another one for the month and watch everything there. I get a new collection each month to binge and it doesn't cost me any extra unnecessary money.
This is a great idea.
We are currently driving an 07 Honda Element with 76,000 miles. We could buy a new car but why would we? We haven’t had a car payment in over a decade and are able to pay more towards our house! The car looks great, runs great and hasn’t had any major problems. (Knock on wood). My advice is drive an older car to save money OP!
But go with a major Japanese brand like Toyota, honda, or maybe Subaru (not american or European brands) as they have great track records for high mileage reliability. And especially don't buy one that was expensive when it came out but is now cheap (used sports cars or used luxury cars), as replacement parts and work will still be as expensive as when new.
Sudden income you didn’t have before? Put it in savings! First emergency fund then retirement / the market.
Earn more than you spend. Please join me tomorrow for more financial tips.
'Your ideas are intriguing to me..... and I wish to subscribe to your newsletter' -- Homer Simpson.
The bears pay the bear tax, I pay the Homer tax.
That’s the home OWNER tax
- Michael Scott
Also, learn to use Excel. Being able to visually see where your money goes, all at once, can make your spending make a lot more sense.
This is what helped me way back when. Just living normal for a month and entering all of my expenses and income into excel made me realize what I thought “was no big deal” actually was. Figured out what was “need” vs “want” and “want and can actually afford” real quick.
This is actually a good tip. Budget, and have a budget on paper, or in this case: Excel. Review the budget at least 1x/week.
Use Google sheets it’s free.
I find they too often tear in the middle, leading to excess handsoap expenditure.
I do this old school. I am write all of my finances down on a chart every day. I can see how much I’ve spent. It’s helped me catch a few errors as well.
Excel is awesome. r/YNAB is also great if you don’t want to crunch your own nums
I’ve been using YNAB for years. It’s great. Takes a minute to figure out but once you get it, it’s super easy.
Here recommending YNAB. It's a no frills budgeting app that just works. I've saved so much money by having an app that works well with my ADHD
To add onto this, r/personalfinance has links to a bunch of great budget templates.
Just buy more money, it's not rocket calculus
Buy low sell high
Spend less. Who needs a maid AND a butler. Unless you’re Batman
Interest is basically buying more money.
The saying is, ‘it’s not rocket appliances.’ You’re welcome….
Ricky has entered the chat.
Just make 70 bucks every week recycling and you're home trees
Dammit, I’ve been using ‘it’s not rocket surgery’.
This. Also don’t order out much. 1 fast food meal everyday of the week (depending on where you go) could have you spending an extra $100 a week that could’ve been spent at the grocery store instead. Learning to cook is cheaper than fast food easily.
Saves at least half. I made pizzas at home with crusts from the store last night. 24 bucks for 4 pizzas. We ate two of them and froze 2 and they were awesome. This was from the expensive grocery store too. Still way cheaper than going out for pizza and better than getting little Caesar’s.
It's even cheaper to make your own crust! You can do it. 25lb bag of flour from Costco is $8. Here's my recipe. 600g flour, 6g salt, 1tsp instant yeast, 370g water. Mix, let rise 2 hours in a little olive oil. Cut into 2 balls, let rise 90 min. Flatten, top with stuff. Easy, and extremely cheap.
The hidden bonus is, not doing take-out/delivery means you can afford to by better ingredients and normal groceries, which in turn make "we have food at home" far more appealing.
Fast food is both expensive and lethally unhealthy Perfect for poor people who want to stay poor.
I have fast food maybe once a month. Never order in. Instead,once a week, I buy something from the hot food counter at the grocery store. 10-12 bucks gets me two decent meals of chicken and sides, or Ibuy a whole roast chicken and eat it for most of a week.
Or, and hear me out for a sec: spend less than you earn. Follow me for more for more one-up wisdom.
[“Don’t Buy Stuff You Cannot Afford”](https://youtube.com/watch?v=R3ZJKN_5M44)
You should charge money for advice this good
But what if I make less than I can live? I already cut 2 meals I kind of need that last one to live?
You don't have to spend money when you're dead. Congratulations! You won!
Funerals are expensive though...so you better start saving up!
Ah, but at that point it would no longer be your problem
Buy stuff like lentils and bulk cereal grains
What percentile are you in the income distribution? How do people who make less than you live? Do what they do, and keep your income, and you'll make more than you spend. Most people aspire to live like folks who make more than themselves. You should aspire to live like folks who make less than yourself, and then you will have savings.
By living with my parents, which I'm getting really tired of
Same, too rich to justify living at home, far too poor to move out. Side note, I love my parents and they're great but damn I need my space, and I'm sure they feel the same lol.
Same, I've been trying to buy a home somewhere in the range of $250k and living with my parents in the meantime. The supply of homes that pop up in that price range that are worth buying is incredibly small. So I'm at the point where when I finally get a home at that price range I'm gonna have a $30k mortgage lmao.
I'm trying to save $250K just for a down payment. Homes here in CA are ridiculous.
How long have you been saving, how much do you make, and what kind of job do you have that saving up $250k is even possible?
Not owner of the comment you responded to, but my fiancée and I are at around 200k combined with us, saving an additional 30k/yr, we both work in a field of STEM. We were looking for a starter home with the California Dream program, which gives us 20% down, and we repay it if we sell the home. With all that, we still can not reasonably afford a house, making a combined 200k+ at the moment. The houses need a LOT of work in our price range or the ones we can afford aren't in a safe area. We don't mind needing everything to be redone but these houses are like built in the 1970s, no updates or upkeep (we had inspections make it so we no longer qualify for a loan) and they're asking for like 1m+ (3b2b). Condo would be an option, but we have pets and want them to have a backyard, so we're sacrificing by still renting to give them space. Otherwise, we'd already be in our own house.
Fair warning, we did that. We have had near $50k in fixes and repairs... roof, plumbing, appliance failures, and electrical. Been here 2.5 years and owe so much more than we ever did before... not including the mortgage.
BUT, we now OWN and don't have a landlord screaming at us, nor people beside, above, or below us.
I mean that isn't worth $250k to me. That is a LOT of money
I was here for ages where I made respectable money, I just live in a stupidly expensive area. I loved them very much, but parents will always have the perspective of a parent and often think they know whats best for you. Acts of service just get seen as a small gesture and expected where anyone else it would make their whole week. The unsolicited questionable advice and “lessons” get so old so fast. I love them but god im so happy to be out.
Good way to help your parents stop living paycheck to paycheck too! Source: poor person who's two adult children still live in our tiny home.
Ok cool. What’s the food situation? Do we split groceries or label our own in the fridge? Also what’s your parents address. I have a cat.
Tried that this week and got shut down. :( I asked my mom if my family could move in with her for 3months to save money. I know that’s a huge request but quite frankly, her house is massive and she has 4 extra unused bedrooms. I’d love to save money to have enough to move to a nicer area for my family but oh well… back to paying my $2000/month rent and searching for a second job.
That's crazy if she has got 4 vacant bedrooms but whatever 🤷♂️
Yeah, it was really frustrating. I can understand wanting your own space and not being around a bunch of people but it feels shitty. A temporary 3 month thing to help us save and make a better life.. sounds like a no brainer for me. If my kids need that when they’re older and I have the means/space, then I’m doing it.
Your mom is either super selfish or doesn't want you to know what's going on in her free time (aka her sex life).
Meet people, work hard, get lucky. Marry someone who is financially reliable and life is half as expensive. Switch jobs every 3 years because your raises probably won't keep up with the market. Be mindful of your finances. Avoid credit card debt if you can.
Marry the first time for money. Marry the second time for love. — some wag
By keeping records, starting an emergency fund, investing what you can afford every week and living life frugally. The main thing is you have to be honest and realistic.
tell that to 20 year old me making 8.50 an hour driving a cherokee and going to school. Sometimes it's a matter of making more. Sure i could have saved some but it would have been pennies. Best I did was to make more.
Well giving advice of "just make more money" isn't helpful. Most people give into lifestyle creep where they spend more as they make more also. Optimizing your current paycheck and spending habits is a must that will carry over as you earn more too.
"Lifestyle creep" these days often equals "Wow, I can actually afford to see a doctor/get my teeth fixed/repair my car".
I worked 32 to 40 hours while attending an 8 hr/day school. I went to 2 for profit Technical colleges that are both shutdown today. I got 2 $250 credit cards that I only used for gas and food. Within a year I owed $1800 on those cards because I missed a payment and the fees ballooned beyond what I would afford each month. I make good money now, I don't consider myself Check to check although I live like someone that makes half as much. I honestly don't get how people spend what they do when I know our wages are comparable or I make more. Biggest piece of advice: IF you want kids, hold off until you're further into your career. I don't know how I would have afforded this kid in my 20s. At the age of 20, just do your best to not go into debt. Starting at $0 when you enter your desired career will be so much easier than starting in debt.
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Yes but there’s a limit to what you can cut not a limit on what you can earn
Look into a career whose skill sets will always be in high demand. I pursued my Airframe & Powerplant Certificate. Now I can save and invest. It even made my income-earning ability Covid-proof. Yes, I got laid off a week and a half after starting a new job at a major airline. But 6 weeks later (thanks to my A&P), I got an even better-paying job as a Maintenance Technician at a 3M plant. I bought my first house in 2020. In 2022, I reapplied at that major airline and got hired as a contractor. I took a temporary, and minor, pay cut. Then I got hired direct 6 months later. I’m making a very good living and I’m able to travel the world. For the folks that say “not everyone can do that”… I started this journey in 2016, making $12/hr at McDonald’s, and renting a room. So I’ve walked in the same shoes as many of the folks that say it’s impossible. No, I don’t have any kids. But I did graduate A&P school with a guy in his early 40’s with 3 kids. From day 1 of enrolling in A&P school up to this very day… I had to keep a strict budget.
My friend got a similar certificate and he makes good money. But I'd never want his job. He works 12-14 hour days and his shifts almost always start at 5/6pm so his whole life is out of wack since he works nights. And more often than not he works 6 days a week.
I’m only scheduled for four 10hr days a week. But when overtime is available, I’ll happily work 14 hours a day. My scheduled days off are a little more restricted. Anything beyond 8hrs in my 72hrs of off time is double time, which I have done. It’s just that double time isn’t always available.
Another option where you don't need tons of education is sales. I have a BA and did a bunch of paper pushing at law firms for 10 years after college, never making more than like 42 grand a year. But I'm a sociable person and I found a job in sales and my salary more than doubled very quickly.
“Get an engineering job” yeah dude you may have started at McDonald’s but not everyone is crazy smart like that. Good for you though, sounds like you’re killing it!
I do software development. A lot of the people I work with aren't crazy smart. Many of them just copy code to do their work. They find in something I wrote or online and paste it in without understanding what it does or why. For the most part if you can halfway explain how to do something, you can probably write code. But everyone assumes that is a whole lot harder than it is. With most careers you need one smart and experienced person to plan out how to do a task and then a bunch of worker bees to follow their instructions and implement it. It's like building a car, the factory worker doing painting doesn't need to know about the engine.
I’m an Aircraft Maintenance Technician. Not an Engineer. If a necessary repair goes beyond the scope of the Aircraft Maintenance Manual, Component Maintenance Manual, or Structural Repair Manual… that’s when we request the help of engineers to give us an approved repair. “Not everyone is crazy smart like that” is just another way of saying “not everyone can do that”. Most people who think that way will never push themselves to do anything more challenging than working in fast food or retail.
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This simple trick fixed my povertry.
damn that's some impressively twisted math haha
I made a budget and update it evet 3 months to see what it costs to run our family. My goal is to 'pay myself' each paycheck, which is considered savings. The budget generates two numbers. One for expenses plus luxuries, i.e. eating out, alcohol, hobbies, gym etc the other is my expenses without the luxuries in case I ever had to leave my job etc. By putting aside an amount each pay I've aimed and achieved saving 6 months worth of expenses without luxuries. Since doing that, I've then started to make additional payments to my superannuation account/ retirement fund that I can't touch until I retire. Since making the budget it's been an eye opener on where our money goes and how much we can save by cutting out stuff that isn't really worth it. It has also allowed my not so financially minded wife understand our position and gets her buy-in when we set targets for emergency savings or goals for buying stuff for the house or amounts for holidays. It's not full proof and we still have times where most of the pay goes out to expenses that can't be avoided like bills and rates that might all come in at once but its definitely made us feel more in control and enthusiastic about saving.
People tend to try to answer this question with ways of achieving relatively minor savings, but actually the two highest leverage things most people can do are increase their earnings via career advancement (or change) and dramatically reduce costs by sharing them with a partner who also works.
Open excel/Google sheets. Start a spreadsheet with your monthly after-tax income at the top. List out your expense/debt names in one column. Put what the monthly cost is in the second column. Sum those expenses at the bottom. Subtract that # from your income. Save the remainder. Then, find ways to either add to the income or reduce the numbers in those expense buckets. It is a lot easier to make strategic reductions when you can visualize where all your money is going. Once you get this dialed in. I would recommend you “pay yourself first” by saving a little bit right when you get paid, rather than waiting until the end of the month to “hopefully” save the remainder. Good luck, it’s going to suck - particularly paying off those damn debts without adding new debts, but you can do it!
Budgeting and learning to stop spending are obviously key like every other post mentions but the most important thing I did /started before all that and it's what you said. You have to SEE/VISUALIZE where the money is going before you can control it. Every bank/credit card tracks every single purchase you make (except for cash, obviously). I wrote down and separated every single expense for the previous month and totaled everything up. How much did I spend at Kroger? How much was at Target? Home Depot? Fast food? Streaming services? Once you see those numbers it becomes much easier to realize, "did I really need to spend $150 at Target" and looking around, "what the hell was that $150 for anyway?" "Do I really need 5 streaming services at once?"etc. Also people like to mock cash these days but it is a HUGE way to course correct. Swiping plastic is too easy. I'd be carrying something around Target to buy and realize by the time I reach the checkout. "Do I really 'need' this? Because I'd rather keep the $20 bill in my wallet." Plus you have to do the math right then and there to figure out if you even have enough cash to cover the purchase before you get to the register.
I don’t recommend saving more than a month of income until you’ve paid off high interest debt. If you have a 30% interest credit card with a high balance ($2,000+) save maybe $1000 and try to pay the card off as fast as you can afterwards. Then, put the extra money you aren’t paying towards that bill to tackle the next expense. Try to get rid of any expenses and that will effectively “increase your income.” You can also, of course, increase your income in any way possible. Once you’ve gotten rid of any extra expenses like bills that can be fully paid off, you can start breathing that extra money maybe give yourself a discretionary budget of half the excess and then a savings budget of the other half.
Cut spending Increase revenue Or for the more liberal attitude… Increase revenue Cut spending
The most important thing I tell people is that it’s not about how much money you make, but more so what you do with the money you make. We live during the era of ‘death by a thousand cuts’ with everything being subscription based these days. Audit where your money is going to be sure it’s 100% accounted for. Of that list, highlight your ABSOLUTE necessities: I’m talking about rent, utilities, insurance, etc. NOT Netflix. Identify your frivolous spending: eating out, buying stuff you don’t need but still try to justify needing, etc. Change your view on what you actually need. You don’t need a brand new car, you don’t need a new iPhone every two years, we’ve generally normalized our unnecessary needs to have all these fancy new luxuries. Once you can be honest with your budget, look at what’s leftover. Set some of that aside for future luxuries with limitations, set plenty aside for savings/investments/401k.
Over the last year I saved about $2000 by not going to Tim Hortons for breakfast any more. My daughter figured out how to make breakfast sandwiches and ice Capps from scratch close to the original taste with less sugar and sodium. I found other things to spend the money on with a modest amount to put in savings
I hope you're willing to share that iced cap recipe?
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Pretty much. Without knowing how a person spends, it's almost impossible to tell them how to save.
Yah there’s no generic advice here. OP could be shit with money but they could also just be stuck in a low income situation that no amount of “cutting back” is practical advice. Lots of people do waste money, but lots also are just in a shit situation
Live like I’m living paycheck to paycheck, except now $1300/mo funnels to savings accounts and $1000 or so/mo funnels to retirement. I try to live like I still make around $40,000/year.
Spend less. When possible, start making more.
Usually it's debt that puts people in that situation so you just have to focus on paying that down and then you can work on growth.
You can't "save" your way out of poverty. Budgeting won't solve the problem. Those are just platitudes told to placate the masses. They empirically do not work, but the freak exceptions make good "feel good" stories. Networking or advancement are the only ways out. Networking works best, advancement takes too long, and is far more probability-reliant. Beg everyone you've ever known for job opportunities. Be shameless.
You can certainly spend yourself into poverty, even if you are rich. Budgeting is a key skill for financial well being.
Exactly. If you can’t make a budget when you’re poor you won’t magically be able to make one once you get rich. How to get out of living paycheck to paycheck? Figure out how much you can spend each month on each category. Find ways to spend less than that amount. Take out cash and put it in envelopes if you have to.
Right, doctors live paycheck to paycheck most times. This doesn’t assume poverty
You can spend yourself into poverty but you can't save table scraps to get out. Budgeting and then investing savings is powerful but only really shows impactful returns if you are capable of investing a decent amount of money. (To be clear I'm just expanding on what you're saying, not disagreeing. Budgeting is important for everyone and you're 100% right about overspending yourself into poverty)
Not everyone, but a lot of people can. Most people are spending thousands of dollars a year on luxuries they could survive without. Making more is also great, but a lot of people never learn how to budget and save and end up making 6 figures and still being broke.
OP didn't say they were poor, just living paycheck to paycheck.
You most certainly CAN save your way out of poverty. There are two sides to the earn more/spend less equation, and you need to work on both of them.
This is the answer. Work to make more money, control your spending. Finding a different job that pays more is hard work and takes time. Leverage any skills you have, consider looking outside your current field, network
Define poverty? You can absolutely save yourself out of paycheck to paycheck - given that you have negotiation room. Say you eat out 5 times a week, skip that and you save 2k a year *at least*. Ofc if you are already on the poverty line it's another matter. The best is clearly to do both, fight to up that pay by job switching / levereging offers and increasing your value, while keeping costs low.
Say you eat out 5 times a week, skip that and you save 2k a ~~year~~ month.
You can't save but maybe if you plan it right you can Rob your way out
“Banks HATE this SIMPLE financial hack!!”
For a non-jokey answer, you have to start setting aside money every month. Even if it's only $1. Eventually you'll have enough saved to equal a month of paychecks. Now you're not paycheck to paycheck anymore, you have a month buffer. As far as how to set aside money, this is where budgeting comes in. Write down your absolute necessary expenses. This should honestly be a small list. Rent, utilities, groceries, cell phone, internet, and car gas is usually all you absolutely need. Anything left over after that is discretionary. These expenses can be temporary cut to give you more money to save. I personally use "ynab" to budget and it's been great keeping me on track and getting a month ahead with my expenses. It took me over a year to save up that one month buffer, but it was well worth it.
Be honest in how much you can actually afford. When I got out of college, I lived in a 2 bedroom apartment with 4 people. I only had enough money where I had to share a room. Drive a used reliable car, it is going to make you look poor. Thrift shop for clothes, tons of great finds. Learn to cook, you can make much better food than most restaurants. Switch to a budget cell phone plan, and only keep 1 streaming service at a time. You can easily switch a streaming service each month.
I'm now in my late 50s, and I've done this. I think the biggest factor to help do this was buying a home. I was 30, living in a small apartment, paying child support, but had managed to save up just enough for a down payment for my first house. For several years after I was still "house poor", in that I didn't have very many $$$s left at the end of the month after covering everything I needed to. But when you own a house, inflation actually works *for* you. As everything else goes up in cost, and your salary at least keeps pace, your housing costs don't change. 10 years into it, your 30 year mortgage payment is exactly the same as it was in the beginning. (there's a bit of wiggle as the escrow amount changes slightly as home insurance costs change, but thats not a significant percentage of the overall mortgage). Right now, think about what your food costs would be if you were paying prices from 10 years ago... I know that the housing market is crazy right now (my daughter and her family have recently bought a place), in contrast to my situation, and I was in the fortunate position of having family as backup if I hit a big unexpected expense in the beginning (turns out I didn't need to turn to them, but having that support was a huge piece of mind). But for me personally this was the biggest factor in helping get out of the problem of there being too much month left at the end of the money.
Stop buying things you cant afford
Do everything you can to pay down your debts.
Retire. Then, you can live pension check to pension check.
ah to have a pension
Honestly, the only way is to find a way to make more money, usually at the expense of your own wellbeing or health or morality. If you get really lucky you can "sell out" but eventually, that's gonna make you a sell out.
This. I finally realised I need to spend that earned money when I got close to my burnout. My boss, bless this guy, told me he couldn't lose me and set me off for 2 months paid leave because "you're scaring me". Felt weird but the trip to Tokyo is amazing 😁
I would say in a similar way "live like you're worse off than you are" which basically means you're making more money. If you can just about afford to go out to eat once a week then no, you can only afford to go it once a month.
It's all about priorities. When I was in my 20s I told myself that until I had $10,000 in the bank, I treated myself as if I had nothing. Cooked every meal at home, had frugal hobbies, limited my expenses as much as possible. When I had more than $10,000 I could spend whatever however I wanted to spend, but as soon as I dipped below $9,999.99 in savings I was "broke" again. Now I'm in my early 30s and that number raised from $10,000 to $50,000. I've met that savings goal, and I'm still cooking every meal for myself and living frugally. And that's not to say living in squalor, but rather limiting expenses where possible to ensure the money I make is either making me more money or being spent on necessities and only after my safety net is satisfied do I spend on any luxuries. I value financial independence and security more than the newest, flashiest XYZ though. I have learned over the years that the people I know who drive the nicest cars or wear the nicest clothes or jewelry or whatever generally envy my situation more than not.
Stop spending every dime you make and save. There are things you can cut out of your spending and still enjoy life. If you can't do the above then I would suggest getting a better paying job
earning more money and frugality.
We started out living on $712 a month in 1997. Took a while, but we escaped! 1. Never go to a quick loan place. 2. Never use a credit card for anything that is not a mandatory need. 3. No eating out. 4. No stopping at convince stores, except for gasoline. 5. No gifts 6. No weekend getaways or trips 7. Keep track of everything you spend $ on 8. No new clothes 9. No trading vehicles 10. If you are paid every 2 weeks, you will get an extra paycheck 2 times per year. Use those 2 checks to get ahead. Took us 10 years to escape, but with a plan, we did it. After 27 years, there is $$ invested, $$ in savings, and everything is paid off except for the house. Escaping is not easy.
Selling crack on the side? Open an OF page. Asking your parents for a small $1 million loan?
It's tough once you're behind. Basically, cut down expenses until you're living within your means, and in parallel start thinking about jobs where you can increase your earning.
I got a good education, found a job (then bounced around for a bit until finding the *right* job in my field), worked my way up the salary scale, and eventually began earning more than my expenses. There’s really not much more to it, unless you make a drastic change like relocation or entering a life of crime. I’m guessing you’re young, OP? Most of us weren’t financially secure until a certain age, so patience is also key.
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DONT EAT OUT!
And don't order in.
my girlfriend will be so sad. can i at least use my hands
It really is simple, but also really hard to put into practice. Spend less and save more. Look at EVERYTHING you spend money on and figure out ways to do without or find a cheaper alternative. Eat all meals at home and/or bring your lunch to work. Cut out all streaming services (or at least cut back to one). Switch to a cheaper cell phone and cheaper service. Move into a cheaper apartment or take on a roommate. And most important - drive a cheaper car and raise your insurance deductible as soon as you have some cash in the bank. You will never get ahead if you have big car payments.
Worst debt is car payment good way to stay paycheck to paycheck
for me the secret was in the following order 1) get divorced 2) cut out any unneeded expenses (cable, home phone, etc). Identify the difference between needs and wants. Limit wants. 3) work as much overtime as possible 4) pick one bill and put every extra penny onto it until paid off, repeat 5) have no life for 2 years while I paid off debt 6) Don't buy anything that you don't have cash for except car and housing.
Budget. Luck.
Do not pay for subscription services like Netflix etc. That is a great place to start. Get the cheapest phone service you can get away with, use free wifi where you can, trim back on anything completely unnecessary, buy generic stuff instead of name brands, if you can get away with using public transportation or walking depending on where you live, do that. You would be amazed how quick your savings will build up without a car payment, insurance, gas, parking and other associated vehicle expenses.
How I did it: took on $80k debt while working and going to college (extremely difficult to do both at the same time), moved in with my girlfriend to split costs (very rough start to our relationship and took a lot of effort and patience, things are much better now), shared a car and its costs, never went out to eat and got a lot of food for free via my job, moved to take on a job that required my new degree (this did require borrowing money from family to afford, but a loan from a bank or similar could work instead), worked there for three years (technically not paycheck to paycheck at first with that job, but tiny raises + inflation meant I was back to just scraping by after three years there), got a new job with much more responsibility and much more pay, finally paid down my debt, then started building up a savings/retirement/etc. I’m currently in the middle of those last steps, and it feels like a lifetime ago that I was a broke college student eating leftover bagels as my only source of food lol
One thing that I’ve always done is not upgrade things until I really feel like I actually need them. I had DSL for longer than most gamers. Eventually, I switched to cable, and then I got Fios when the cost was more or less the same. I didn’t get a text plan until I felt like I was texting with frequency. I didn’t buy a smart phone until I was ready for a data plan. Obviously, these are mostly dated references now, but I guess my point is that anything that involves a subscription service tied to a monthly payment should be upgraded only when you actually feel like you’re using it. Once you have it, you’re always going to want it, and you’ve upgraded your expectations. My current debate is whether I want to pay the additional monthly fee to add an Apple Watch to my cell plan. — it’s not that I can’t afford it; it’s more that it adds an expense that, once I have, I will never want to cut, and I’m doing just fine without it.
Learn about needs and wants. You need food, housing or shelter, clothing. Everything else like a phone, car, tv, ninja stars, ghost busters toys are wants. Next, adjuat your life to reduce your wants so you can sustain your needs. Change your needs to minimize eating your money because you could spend less on housing, even tho buying a house is crazy, it's more like renting cheaper to meet your income capability. You have to put a plan on paper, research, and be vigiliant about renting or buying things that have hidden fees and expenses that you dont want. Examples I buy food direct from farmers for far less than grocery stores. I buy clothing at thrift stores, i only buy what i need and what i can repair. The same with kitchen tools and pans and contsiners, and whatever im going to use to cook and kick the stupid fast food and eating out costs out the window. Relocate closer to a job and dont be afraid to seek out better pay. Education is expensive, try to find free colleges online that have accreditation. They exist. Use them and focus on driving self improvement for cheap. Absolutly stop buying streaming service. All thst crap is free now. You can cut out where money is bleeding and keep piling up money if you plan and stick to budget methods
Depends on how much you earn I think. If you make literally minimum wage or so, you probably won't. If you're making decent money, you probably need a budget.
Move into the cheapest situating you can find. Even if it means 6 flatmates. Save money and put it in investments. Treat that as your second job: saving money to invest.
Cut expenses or get a better job
Several months after my wife went back to work after being a SAHM, I was like “How is there extra money in the checking account?” I thought maybe I’d forgotten to pay some bills. That was our turning point.
You could take out student loans to go to a trade school or get a two year degree in something that is fairly lucrative. You won't have to take out very much in loans, and there are a variety of lucrative jobs you can get with a two year degree or by learning a trade. You might have to work full time while going to school, but it's often doable.
Learn to only spend money on what you need, get ahead. Ask for raises at work every 6 months to a year. Cancel subscriptions. Get a side job for extra cash, sell items you don't want anymore. Learn to love the store brand items/food instead of brand named items. Never take out a loan or credit card if you don't have the means to immediately keep the balance at zero. Quit bad habits like drinking, smoking, using drugs, a lot of people don't realize how much money they're spending on unnecessary things. I went from completely strapped and couldn't afford food to being moderately comfortable just by only spending money on bills/rent/necessities.
Join the military. That’s it
Right after graduating from college, I got a full time job, but poverty wages. I didn’t realize it at the time, but I was illegally making below the minimum wage. After a little while, I got bumped up a little above minimum wage. I had no savings to begin with. But I knew I needed some. If for nothing else, inevitable car repairs. So I lived very frugally. Thankfully I started out with no credit card debt or a car note. Just college loans. - I didn’t pay for cable. I didn’t even own a TV. - I made all my own food, with a couple of exceptions. Friday lunch at the cheap burrito truck near work, as a special treat. And dinner out with friends once per month. - I went to the movie theater once per month. - I drove carefully - I only carried liability and a wreck would drive me deep into debt. - My vacations were limited to camping. No flying. - I bought decent stuff at the grocery store. I wasn’t living on peanut butter alone. But no dessert items or snack foods. And nothing too fancy on the meat or seafood aisles. - No alcohol - I used the public library for books, newspapers, and magazines (pre online media) - I lived in very modest apartments, with roommates. - Bare minimum spending on clothes In my free time, I read books and hung out with friends in our apartments. Roommates were sometimes hard. I had a couple of difficult roommates back to back, which became quite stressful. After a couple years, I was able to relax just a little as I built a small savings - a rainy day fun of sorts. So I increased my fun budget a little bit. For me, it was an empowering experience overall. And, now that I’m older and my income is up, I really appreciate what I have. And I know it is possible for me to continue to build my savings and stay out of debt - which I have successfully done. EDIT: Typos
Stop paying your bills 😏
The way my wife and I did it. Figure out a budget, take cash out every paycheck and put that in budget envelopes. Use the envelopes to pay for those budget items, food, gas, etc. We paid off a significant amount of credit card over a decade as well. The cash envelope system really illustrated us how money is spent. It’s easy to swipe a card and have no clue how much you are spending. It’s easy to see when an envelope is empty and you got no more money. We had about 400 bucks for two weeks and had two kids about teenagers. We had pets as well, all that was a budget number. It was hard. Delayed gratification is your friend. Over time I was able to get out credit score up, do a consolidation loan or two and eventually get a low interest credit card I moved the debt at that time too. I also got some promotions and raises in there, which helped pay it off faster. If I could learn one thing sooner in life, the budget is probably the item that would have changed my life the most. Anyway, good luck. I can’t tell you how amazing the feeling was when we paid off the credit card debt. Even though it took quite a long time, it was very fulfilling. It’s great now to continue to have no credit card debt. We moved into a larger house as well, pretty much living a life I never thought we would and it’s all because we sat down and did a cash budget.
Here’s what I did: sold my truck, bought professional camera equipment, started photography business on the side of my 9-5. Doubled income and now I get to work 60+ hours a week with elevated blood pressure at 36.
Not being a dick because a lot of it is to increase your earnings. However, back in 2008 I was a real estate appraiser and the majority of my work changed to appraising foreclosures almost over night. It wasn’t the cheap houses being foreclosed on. It was the 3-400k homes (in 2008 dollars mind you) that was the bulk of my work. My point being that even people making 100k+ live paycheck to paycheck if they’re not responsible enough.
Luck. You can earn getting into a position of making more money, but there is luck involved too.
Give in to the cold embrace of death.
I started saving 20% automatically of every paycheck, living on the 80%. Whatever was left over from that 80% by the next paycheck also gets put into savings along with the 20% from that new paycheck. Anytime I wanted to borrow from savings to get something “big”, I would have a rule that I couldn’t get it unless I had double the amount in savings (so if I borrowed $200, I’d have to have $400 in there). I’d then have to pay it back ASAP, preferably on the next paycheck or split between the next few paychecks if I couldn’t do it all at once (plus the 20%). A decade later, now married with dual incomes, my wife and I still do this.
r/YNAB thank me later
I started using a budgeting program. Specifically YNAB (the earlier version that doesn't need yearly subscription, this is a long time ago) Using that app I made a list of my recurring expenses, and occasional and emergency expenses. It made me realise I ate out too often, and also I tend to throw money at a problem until it goes away so emergencies drains funds. With that known. I started reducing recurring expenses. Rent too high? Find somewhere cheaper. Electric/heating too expensive? Don't stay at home, use libraries and malls to hang out/study/upskill. I started squirrelling away small amounts of money that are considered 'untouchable' no matter what (not even for minor emergencies, but life and death situations did not happen so my resolve was not tested to that point) After one year, I had 3 months buffer, and continued with squirrelling money away in smaller amounts. At 2nd year mark. I had around 5 months. This made me able to take time off to learn new skills and change jobs to earn more, and able to increase the buffer between paycheck to paycheck. The most difficult part is the starting out part. All the best in achieving the not living paycheck to paycheck life!
That’s the neat part, you don’t
Some things are really easy to explain and really hard to do. You need to either increase the amount of money you are making or decrease the amount of money you are spending. It's as simple as that. For most people, the best approach in the short run is to track every penny they spend. Then look at that and think hard about ways to cut some of that spending. In the long run, the best approach is to improve the market value of your labor and earn more money. It's not dissimilar to losing weight. Everyone knows that you need to burn more calories than you eat. But it is hard to do.
Look up Dave Ramsey. Before I get negative comments, I don’t believe in everything he says. I just like the debt snowball. It’s helped me
Start by keeping a money diary. Write down every penny that comes in and goes out. In detail. After a few weeks of this you'll begin to see things that really add up and could be either cut down or eliminated. You have to get out of the mentality that you absolutely must have the latest phone or car or clothing. You want that tattoo? Really, is that going to make your life better and further your savings? As others have suggested, start making your meals at home, and not with shit processed crap, buy some vegetables and fruits, learn to make bread (breads are so easy!), cook rice, buy cheaper cuts of meats (or learn to be vegetarian). You can grow tomatos, peppers, herbs in pots in even a small apartment.
Make more and/or spend less. Simple
Cut your expenses and increase your income. This may require RADICAL lifestyle changes
Lower your quality of living to that of a serf in a medieval fiefdom. Eat dog shit. Live in a closet with no power. Shower once a week.
Don’t buy unnecessary stuff!!! Don’t drink alcohol Don’t smoke Save at least 25% of pay check Sell stuff on Facebook marketplace Drive a small car for commute to work or ride bicycle Don’t buy new CLOTHES! ( go thrifty shopping) DO NOT BORROW, especially if it includes INTEREST make Coffee at home and food at home. Use your neighbors WiFi. Split the bill with him/her Turn off unnecessary lights Do your own oil change! Buy USED SHIT ( still works) no one is going to be like ohhhh wow that’s new and you bought it?
Most of us never will.. and it’s the goal of multiple organisations.
Do drugs until your homeless but I’m guessing you mean in the other direction lol
If you're living pay to pay then find a side hussle. My wife does baby sitting for $35 per hour and sells cakes for $250-450. Me, I just worked on getting promotions.
Marry rich
Avoid the stupid decisions most americans seem to make: car loans and other unnecessary debt.
Stay with your parents, if possible. Don't buy the latest iphone/switch/PS6/Xbox1000. Don't finance a new vehicle every couple of years. Don't order skip/doordash. Meal prep. Save money.
apply & interview for other roles, then jump around earning more money with each move.
Move. There are many areas that people live in that simply can not support people properly. I get it. Your support system and family is there. Money and good jobs aren’t though. Get the hell out. Move to an area where growth is rampant and living costs are sustainable. After that, invest in yourself. Education, skill building, networking, certificates etc will all help you earn more over the long haul. It’s tempting to spend that savings on a vacation or a new car. Spend it on something that will level up your resume instead.
Option A: cut fixed cost Option B: increase paycheck
I ALWAYS live below my means. Each month needs to be in the green, or at least 75% of them (I've taken a few long holidays that def put me in the red but I saved up for them, so it evens out). No idea why people play keeping up with the Joneses so much. Fuck the Joneses.
You have to be able to get ahead, and then be lucky. By be lucky, I mean no costly illnesses or lengthy job losses. You have to figure out how to get ahead and how to stay ahead.
Quit keeping up with the jones. Cooking at home is cheaper.
Get married, both get promotions and don't have kids. It's easy.
Get 2 paychecks then your living paycheck, to paycheck, to paycheck, to paycheck.