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Your Financial Takeover Starts Here
I know what you’re thinking, “How can I save money on my low income in this expensive world we’re living in?” But have no fear, there are strategies to help you get there. We’ll need to compromise here and there but you’ll thank yourself in 6 months after implementing these practical tips.
You clicked on this post for one or more of several reasons. You have a big purchase coming up and you need to save, you’re tired or living paycheck to paycheck, or you want to build up a savings or emergency fund, etc. Whatever the reason may be, we are going to take this challenge seriously.
6 months can seem like a long time away. But once you approach month 3, month 6 creeps up pretty quickly. I want to encourage you to be on top of this effort. After all, it will fly by before you know it.
Here you will learn practical skills that you can maintain past the 6 month mark. Or you can at least utilize these tips temporarily to get you to your 6-month goal. You can still enjoy life while compromising, it will just be a new, fun, and challenging way to do so.
This is not just a temporary lifestyle shift (hopefully turns permanent) but a mindset shift that will not only get you to save that $12,000 in 6 months but will build the discipline you need to keep this going long-term.
Follow these Foundational Steps to Saving $12,000 in 6 months
MONTH ONE
We’re going to build a strong foundation for this challenge and it all happens in this first month.
Grab your pen and paper. I want you to understand the real numbers involved here.
Follow these steps in the first week! Remember, setting up a strong foundation will make for a successful journey.
- Write down how much you make at the top of your paper/notes app.
- Now write down each of your essential fixed monthly/yearly expenses.
- Your essential fixed expenses are the bills that occur every month at a set cost, i.e. rent/mortgage, car payment/insurance, phone bill, etc. (Include only the fixed expenses that are truly essential and required to be safe and survive. I am not talking about your Netflix payment or any other subscriptions.)
- I want you to call your cellphone service provider and see what offers or discounts they can give you. Is there another cell phone provider that can save you more money? Give them a call.
- A lot of these newer providers are powered by these larger cellphone service providers. So there is no difference in service.
- If you’re a teacher, nurse, first responder, or a loyal customer for some time, you’ll find there are discount offers for you.
- Next, call your car insurance servicer and see what discount offers are available. Shop around for other quotes that can potentially save you hundreds a year.
- Take a defensive drivers course if you haven’t done so in the last 3 years and get 10% off your premium. There are discounts if you go paperless or if you increase your deductible. Give them a call and find out other ways you can save.
Do this for as many of your bills as you can. You may need to allocate a few hours a day to make your phone calls. Any savings will add up.
Let’s keep building that foundation and move on to the next important steps to solidifying your savings goal.
We’re still here on month one. You took a few days to make all your phone calls and found ways to save on some/most/all of your fixed bills. Even a little bit of savings here is so exciting because it means there is more of your money left for you!
- Now subtract the ESSENTIAL FIXED expenses from your income for the month. Whats your total? Remember you wrote your total income at the top of your paper. Now we have your necessary fixed expenses accounted for and subtracted from your income.
That money that is left should be handled delicately. We’ll talk about how shortly.
- Your next step is to look at your bank account statement for the last 2 months. Get ready to WRITE down certain details. What and how much are you spending your money on the most? Grocery shopping, eating out, coffee? How many subscriptions do you have? Are you making the most of them, are they worth the cost? Can you do without them for the next 6 months? Get to know your subconscious spending habits this way.
- This approach can seem a little aggressive but this is a critical part of your savings journey. When you know your habits and where your money is going, you have greater control over it.
- With that being said, get rid of those subscriptions that are not doing you any good. That waste of $10, $20, or $30 a month can be a big hindrance to reaching your goal. Trust me when I tell you the money adds up. Just look at your spending and how quickly small charges add up.
- Now really consider which nonessential fixed charges you are going to keep. Are there ways to reduce those payments further?
Okay, now that you’ve reduced and eliminated some of your bills let’s keep it moving.
- Subtract your NON-ESSENTIAL fixed expenses from your income (Step 5), what’s left?
Our goal is to save $12,000 in 6 months. I know every reader here is working with their own specific income.
The amount left over may provide you with a lot of room to save more than $12,000 or you may be cutting it close, or your income does not allow you to reach that amount.
- Wherever you stand, I recommend saving at least 70% of what is leftover. The 30% leftover will be allocated to groceries, eating out, and entertainment.
- You already allocated all your essential fixed expenses right? The only other essential but variable expense is food. So that’s your grocery and/or dining out bill.
If at this point you are thinking I am crazy, hear me out. You have a chance to make huge improvements in your finances. I encourage you to enjoy yourself. Do not compromise your mental health here by cutting out all the fun.
But allow the opportunity for a mindset shift where impulse buying becomes a thing of the past. Where you make responsible purchases that benefit you in the long term. And where you can sleep better at night knowing you’re not living paycheck to paycheck anymore.
Here I will provide you with pro tips on how to manage your spending in Month One
Grocery Shopping & Dining Out
We all have different situations regarding our schedules that determine how, where, and when we eat. Regardless, there are ways to cut your costs.
First and foremost, plan out your meals. It’s okay to be spontaneous but if you know that you won’t have time to cook at home then avoid spending money on groceries.
We know cooking your meals at home allows for greater savings on food. Current data shows the average American spends $3500 a year on eating out. Add thousands more if you live in an expensive city!
If you find yourself needing to get your meals outside then I recommend finding those restaurants near you that offer lunch and happy hour specials.
Dinners are usually more expensive with fewer discount offers. So if you are stuck eating out for dinner then avoid the expensive drink to go along with your meal. Ordering appetizers as a substitute for an entree is a cheaper option that can still fill you up.
Another idea is using Groupon. When my cousin was a graduate student with a tight budget, she purchased Groupons that offered worth-it-dinner discounts. She got to treat herself to a nice dinner every so often as a reward for all the time dedicated to studying.
If you find you have time to meal prep and cook at home then you’ll have to keep track of your grocery bill. I used to spend around $400-$600 a month just on grocery shopping for 2 people. It was ridiculous.
I learned to plan out our meals for 2 weeks and only buy the grocery items we needed. Saving $12,000 in 6 months requires an aggressive approach to saving, I preface that because it is time to say no and eliminate the snacks that don’t provide us any nutritional benefits anyway.
Before you shop, scan your current inventory and make meals with items you already have in your fridge or pantry. I always find plenty of meal options that way. I avoid wasting money on buying multiples of the same item and save room in my fridge/freezer.
For more money savings on grocery shopping, check out Ibotta. You can find offers on items you normally purchase and get cash back for those purchases. This is a no-brainer, you’re already buying these items you need, might as well get some money back.
Starbucks, Amazon, Etc.
For those smaller purchases that add up like your morning coffee, snack, and Amazon purchases, try using Swagbucks. To earn your rewards you take surveys, play games, and scan your receipts along with other activities. The money or gift cards you earn from Swagbucks can pay for those extra items you’d otherwise have to resist.
I recommend trying out a “No Spend Month” challenge. Turn this disciplining task into a fun family challenge. You might be surprised to find that the items you were initially interested in buying are not as desirable to you after some time.
For your first month, you are cutting out all the extra frills that ordinarily hinder any growth in your savings.
Know your numbers! How much is coming in and what are your essential fixed expenses?
Reduce the cost of your fixed expenses by spending a few hours making phone calls.
Choose to SAVE the majority of your income after subtracting the essentials.
Cut out the subscriptions (at least temporarily).
Meal planning and using Groupon, Ibotta, and Swagbucks are all ways to save & potentially “make money” outside of your current income.
Say NO to unhealthy habits whether food-related or impulse buying.
MONTH TWO, THREE, FOUR, FIVE, SIX
Increasing your income throughout the next 5 months is a major help. Are there temporary part-time or weekend hours available at your current job for you to pick up?
Do you have any items in your home you’re wanting to get rid of that can potentially make you money if you sell online?
I hear more and more from people with full-time jobs that they work for Uber Eats as an easy way to make extra money.
Getting it all right in the first month is key to allowing for a successful journey toward your savings goal. It is the foundation for the six months ahead, and even further beyond that.
During the next five months, your job is to maintain your new habits. You can do this! Six months seems like a ways away but we know the old saying, “time flies” stands true.
Involve your loved ones on this journey, encourage each other, and keep each other accountable. As I said, this is going to set you up with a healthier financial foundation.
You Got This! You now have this easy guide to help you through this challenge and reach $12,000 in 6 months.
I will help you learn the tools you need to make better financial decisions, improve your money-management skills, and get you on the path to retiring early and enjoying financial independence.
I care to make this a fun journey rather than a restrictive one but that takes being mindful, practical, and intentional with your financial habits.
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Until next time,
The Financial Takeover
