The most important thing you can do to make your personal economy strong is to have an umbrella—a rainy-day fund with at least enough money to pay all of your bills for at least three months without a paycheck. Call it $10,000.
Save 10 Percent of Your Paycheck
It may sound like a lot, but start with 5 percent or even 1 percent, and build up. Deposit the money automatically into your savings account; you'll never miss what you don’t see in the first place.Get Rid of Nonessentials
Give up the little things, such as cable TV, eating out, your gym membership, and entertainment.Cut Variable Expenses
You can’t cut off your utilities, stop eating, or give up driving. But you can reduce the cost of the food, energy, and fuel you buy. Opt for the cheapest food store and the cheapest gas. Stay away from restaurants. Turn out the lights; run only full appliances.Clean Out
Take a look through your cupboards and closets. Identify everything you haven’t used in the past six months. Turn what you don’t need into cash on a website like eBay or Craigslist, or hold a yard sale.Adjust Withholdings
Go to the “Tax Withholding for Individuals” page on the IRS website to make sure you aren’t having too much or too little income tax withheld from your pay.
Get creative by making money doing things you already love to do, like dog-walking or selling handmade items. Jus_Ol/Shutterstock
Increase Your Income
Get a second or third job. Work more hours at your current one. Get creative by making money doing things you already love to do, like dog-walking or selling handmade items.Stop at the Match
If you are contributing to a retirement account like a 401(k) or 403(b), don’t stop, but limit your contribution to the amount your employer matches for now. Once your emergency fund is at goal, you can go back to contributing beyond the match.Pull Back
Stop sending more money than required each month to your credit card companies, mortgage lender, or any other creditor. It’s admirable that you’re being diligent in repaying the debts, but if you continue to do this while living without money in the bank, you'll be setting yourself up to fall even deeper in debt.4 Musts If You’re In Too Deep
Do Not Hide
Your first instinct may be to bury your head, but don’t. Call the creditor; explain your situation; and try to find a solution.Ask for Help
Call the National Foundation for Credit Counseling at 800-388-2227, or go to their website. This is a reputable nonprofit organization that will connect you to a member agency to help you sort out your bills and get you into a debt management plan.Downsize
If you’re over your head in a house or car you cannot afford, stop the bleeding now. Move into a smaller home, or get rid of that money-sucking vehicle.Put Away the Credit Cards
If you are unable to pay the outstanding balance in full every month, stop using the credit cards. Living on credit will sink your ship for sure.Feeling discouraged? Don’t! There is so much hope for your bright future. It’s not too late unless you don’t start now!
Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog and the author of the book “Debt-Proof Living.” Mary invites you to visit her at her website, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at EverydayCheapskate.com/contact, “Ask Mary.” Tips can be submitted at Tips.EverydayCheapskate.com. This column will answer questions of general interest, but letters cannot be answered individually. Copyright 2021 Creators.com
