I’m sure some of you laughed last night when I said that part of step #1 in the “simple plan” was to get $1,000 in your checking account or savings account as a starter “emergency fund”. I’m sure some of you said to yourself, “What planet does he live on? If I had $1,000 in my checking account, I wouldn’t even be taking this crazy class!” Hang with me on this one, because this is a really big deal…
The way I see it, you have three options:
1. Increase your income.
2. Decrease your expenses.
3. Hope for some unknown distant relative to die…soon…and leave you a bunch of money.
We’ll ignore option #3 for obvious reasons and jump right into options #1 and #2. Jesse Mecham – the founder of You Need A Budget has some great ideas in his book titled You Need A Budget, some his ideas, with my commentary, are below.
INCREASE YOUR INCOME
Work overtime – no one said this was going to be easy. Getting out of your current financial situation is going to involve making some tough choices. If your employer allows it, add 1 or 2 extra shifts a month or 5-10 extra hours a week.
Get a part-time job – current job won’t allow overtime, great…look for something at night or on the weekends. Dave Ramsey has story after story of people who actually delivered pizzas to earn extra money to get out of debt and establish an emergency fund. There’s no shame in part-time work. As Dave often says, “if you live like no one else now, you will live like no one else later.”
Start a small business – some of you have some crazy good skills that can earn you money. Do you make an amazing pie? Are you great a sewing? Can you mow a lawn faster than Tony Stewart can drive a car? Do you love kids and enjoy babysitting? Don’t mind picking up dog poop? Find something people hate doing and let them pay you to do it.
Sell your stuff - people LOVE garage sales. Take all that stuff in your home that you never use and sell it. We are a family of four and in my home we have eighteen places to sit. EIGHTEEN! Do we really “need” 18 places to sit? Order your life based on the rule, not the exception. If you haven’t used it in the past 3 months…consider selling it. I sold a bunch of books on Amazon.com this past December and made well over $100. Doesn’t sound like much, but every little bit counts (see Proverbs 21:5 below).
DECREASE YOUR EXPENSES
Drop the land telephone line – land lines are SO 1986. Get rid of it and just use your mobile phone.
Take your lunch to work – You say, “What!?! My co-workers will think I’m strange.” Two things: (1) no they won’t and (2) your co-workers are probably broke and in debt because they go out to eat every day. They will only think you are strange if you cook fish in the microwave at work. Don’t do that. Seriously, don’t do that.
Make coffee at home – let’s be honest, the reason you want Starbucks every day is because you look cool carrying that cup. Your Starbucks is more of a fashion accessory than it is a need. Make the stuff at home…with a $20 French Press, it will even taste better.
Stop buying soft drinks when you do go out to eat – at most restaurants, soft drinks are the most profitable product on the menu. Mmmm, free water.
Make rabbit ears cool again – want to know which executives are up at night wondering what the future holds for their business? Cable and Satellite TV executives. Drop cable or your satellite provider. There, I said it. You’ve been waiting for it and I finally said, “GET RID OF CABLE TV!!!” I’m not telling you to go all “Little House on the Prairie” style and sit around by candlelight each night making paper dolls. Check out HULU.com, get a Roku box, sign up for Netflix streaming. Remember how cool you felt when you were 7 years old and got a library card? Bring back that feeling. Libraries actually still exist! Who knew? What’s even better is now that your mom is not with you, you don’t even have to borrow books – you can just borrow movies! For free! There are more options than ever for free entertainment right now. All you need is an internet connection…and some good books (b/c you will watch less TV…which can be a good thing).
Use coupons – each year, millions of coupons go unused. This is a tragedy. Resolve now to stop this madness and accept free money from these companies. You are leaving money on the table. Use Google to find coupons for your favorite grocery store. Guarantee you’ll save $5-$10 per trip.
The lists above are by no means exhaustive. And some of you might be thinking, “big deal if I save $10 – I need $1,000!!!”. Here is another fundamental mind shift that needs to take place: steady plotting leads to big change. That’s why this first step is so important. We need to fully embrace this mind shift.
“The plans of the diligent lead to profit as surely as haste leads to poverty.” – Proverbs 21:5
Getting $1,000 in your emergency fund make seem like a pipe dream, but if you are diligent, you can accomplish this goal and move on to step #2. DO NOT GIVE UP!
Would love to know if you have any other expense reduction tips. Leave a comment.
