Pennies Are Not From Heaven

The average American worker is living paycheck-to-paycheck. That’s a frightening thought, though not surprising; most of us simply have no savings whatsoever to fall back on if we lose our job, become too ill to work, or have an emergency. It only takes one lousy week for the average two-income family to become homeless, and it can take years to recover from that.

Most of us don’t save money simply because we’re “too broke to save”. Despite having two incomes, there just isn’t enough money to cover all the bills; rent prices for a decent place to live are generally outrageously high, groceries are just ridiculous, and the costs of health care, child care, gas, and utilities are through the roof. A lot of us are in debt up to our eyeballs, and have to be, in order to just survive.

So, how do you save money when you can’t even make it through to your next paycheck? It can be difficult, but it can be done.

First, keep a written account of every dime you spend for a month. That’s easier said than done-you absolutely have to stay on top of your spending, all the time. At the end of each day, tally up how much you’ve spent, but don’t cringe too badly. The cringing comes later.

At the end of the month, take out your expense log, and figure out how much you’ve spent for each category-rent, groceries, health care, clothing, entertainment, alcohol, cigarettes, etc, etc, ad nauseam. Where is your money going?

If you find yourself spending a large amount of money on “habits”, change them! If cigarettes are your pet sin, either switch to a cheaper brand, cut down, or quit. If you have a bad coffee habit (or soda), see what you can do to reduce the costs of your caffeine addiction.

Watch what you eat, and you’ll see cheaper, healthier alternatives popping up everywhere. If your kids regularly consume two boxes of cold cereal a week, switch to oatmeal, fruit and cheese, or even pancakes (made from scratch-the frozen, nukable pancakes and waffles are more expensive than cereal). You can save $208.00 a year just by getting rid of cold breakfasts. If you take your lunch from home instead of eating out every day, you can save $864.00 a year, at the least!

Look at your other expenses, as well. Do you pay too much for rent? Would a move to a smaller or cheaper apartment be possible? Look around before you decide; you might find something you like that’s a lot cheaper than where you are now.

Do you regularly take the kids out to the movies? Would they have as much fun with a trip to the park? ??Do you spend extra money on brand-name clothing? How much of your clothing do you actually wear? I’m a firm believer in the idea that no one needs to own more than fourteen outfits that can be mixed and matched; if you have fewer clothes, you can spend less on caring for them, and afford “better” things. Give it a try; if it works for you, you can sell your surplus clothing at a consignment shop.

Is your budget breaker child care? Could you afford to quit your job and work from home instead? Before you answer that, consider this; when my family had two full time incomes, we were still borrowing money just to make ends meet. Now that we have one full time income and one part-time, we’re able to loan out money to our two-income friends! Actually sit down and really crunch those numbers before you give the standard, knee-jerk response: “It takes two incomes just to survive!”

Last but not least, if your cash-killer is credit card debt, kill the cards. Keep one for emergencies if you have to, but cut up the rest. Start paying more than the minimum amount on your cards, even if it means eating macaroni and cheese three nights a week. You absolutely must pay off your cards, or the interest charges will keep you in debt forever!

Technorati Tags: paycheck-to-paycheck, savings, save money, money, expenses, Save Money