How To Save Money When Going Broke
Everyone and their mom is talking about saving money in order to live comfortably while accomplishing goals in their lives for the future. Though this may be true in our new Instagram world, can you really learn how to save money when going broke and living paycheck to paycheck? Perhaps you don’t even have a paycheck! We’re going to do a deep dive into this subject so that you can begin making investments, generating extra cash, and living a more prosperous life so that you can live comfortably.
In this article we are going to touch on five different things that you can do so that you can save money when going broke:
- Don’t Be Late On Bills (Request Extensions)
- Adjusting Your spending
- Renegotiating Terms
- Man-Up (Stop Being A Punk)
- Generating A New Source Of Income
Don’t Be Late On Bills (Request Extensions)
This is one is what I call a “sleeper”. This used to take so much of my money (and still does sometimes) from under my nose without me realizing it, but I would fall in this trap every single month! I have a ton of credit cards…don’t ask me why. I love to use them because I get all type of rewards and points, and there’s also a gratification knowing that I don’t have to pay cash for something at that moment (Hence the reason I’m in $60,000 of debt).
If you plan on making the payments on time, every single month, or even better…paying off the balance of your cards every single month, then you will be in some great shape. If you don’t take care of your bills on time, you will rack up these things called “late fees”.
Late fees can range from $1 up to as much as $37, in my case. You may have seen even more higher late fees than that! Now imagine not paying that late, and for every month, every week, or everyday, there is an added late fee because you are already late until you pay off the balance. You can end up pay literally $100s in late fees ON TOP of your past due balance.
At one point, I had so many bills and late fees, that I was scared to open up the mailbox because I knew there was a late notice or something in there. I could feel my anxious body creeping up to the mailbox, with my nervous finger tips gracefully touching the lip of it to open and pull the mail out. BOOM! Another late notice.
Now I have to muster up the strength to open the envelope. Funny enough, that envelope may stay there on the countertop in my kitchen for another 2 weeks because I’m scared of opening the envelope to see the past due amount. Now, my phone is ringing with a crazy 800 number at 7am because the bill collector is trying to get me to pay the balance off.
By this time, I could have just paid off the balance or could have made the minimum payment, and I wouldn’t be going through all of this. Also, to make things worse, I have racked up $100s of extra fees and now I have to make 2 payments instead of 1.
I told myself that I wouldn’t be intimidated anymore, singed up for a Mint account so that I could track all of my due dates and other bills, and put myself on autopay. I just simply couldn’t trust myself to do the right thing.
Now, I’m easily saving $200-$500 a month just because all of that money was going to late fees originally. Not to mention, my redit score will do better when I pay things on time.
If this sounds like you in any way, but you don’t have the money to pay those late fees off, then it is time to muster up the strength to pick up the phone, and call your debtors. Let them know that you fully intend on paying the bill, but you need some assistance. Heck, people across the world are being effected by covid in ways that you couldn’t believe. Tell the debtors that you are in financial hardship and you want to know if there is a program.
Now, I don’t condone lying, but at the same time, desperate times call for desperate measure. Ask me how I know.
Companies don’t care how much you hae to pay, they just want to make sure they get paid. Don’t be intimidated. Take control of your life, and pick up the phone, so that you can adjust the amount of those payments in order that you may breathe. Do this, and you will be on your way to saving extra money as a broke person.
Adjust Your Spending
Have you ever heard of the Latter Per Day theory? It goes something like this…
You say that you are not able to save any money. You’re always broke or don’t have enough left over after the bills, right?
Let’s take a look at your morning routine.
Each morning, you stop by Starbucks, and get that $5 latte every morning (I don’t drink lattes by the way. I’m more of a chocolate or strawberry donut type of guy).It doesn’t seem like much.
However, once you calculate your $5 for everyday during the month, you will have realized that you’ve actually spent a hefty $150! This is what I call “ballin on a budget”.
This number may not mean much to you. Let’s take this another step. $5 a day for the whole year, is $1825! That’s right, you’ve wasted $1825 of your own extra money, on a liquid that does not do anything for you, besides that fact that it tastes good of course.
But that number may not be big for you either…eventhough you’re rading this and telling me that you don’t have ANY extra money because you’re broke.
How about this one. If you save $5 a day, and put it in some type of annualized account that brings you a 10% return on investment, like a 401k, an ira, or some type of money market portfolio, In 10 years, while saving $5 a day will bring you a solid $30,000.
Or, in 50 years, you can saving a whopping $2.3 Million! How’s that number for you?
Now, I digress with my latte example. Hopefully you understood my point that I was trying to make there. You have the money, but we just have to find out where the money is leaking from. Many of us having some very bad spending habits and if we tweaked our spending just a bit, we can find places to save money.
If you’re broke, I recommend tracking everything that you spend for a whole week. Get real serious about it. If you go to Chic-Fil-A and they charge you .25 cents for some of that heavenly Chic-Fil-A sauce, then you need to write down the .25 cents that you spent. Track every penny that you’ve spent.
After you’ve done that, go back to your money log and review what you’ve spent. I’m sure that you will be thoroughly surprised. After you figure that out, make adjustments accordingly and save that money.
Lower Interest Rates
Yes, I know that you signed up for that 0% interest card for 12 months, and you knew that after the 12 months, you wold blow up to 27%, but who cared? You knew that you were going to be responsible and pay off anythiny that you put on that card and you wou;dn’t have to worry about the high interest rate after a year.
But then…
Certain things happened. You lost your job due to being laid off, someone had medical issues, you had to pay off the car instead…life just got in the way.
Now you’re stuck with a $500 payment on something that you didn’t have any intention on keeping, and all of your money is going toward the minimum balance and you can’t pay down on the principal amount.
If any of this sounds familiar, I want to tell you that I can relate. Remember that I have $60,000+ in debt. I completely understand. At the same time, I can help you through this by telling you to first, get these payments under control by getting your interest rates lowered. This goes for your credit cards, and your loans.
Believe it or not, your debtors want to work with you. They do not prefer that you make lower payments that you agreed to, but the fact is that they simply want you to keep paying. Their fear isn’t how much you’re paying, but rather you keep paying or not. They want your business. I know it can be intimidating, but you still have the power in your hands despite you may feel.
This is what I want you to do. Call up your debtors and ask to speak to the managers who control the interest rate changes, because a regular customer service rep will not be able to help you. After getting ahold of one (it may take a while and many tried to actually get one), tell them that you cannot afford to keep making the payments and that you need your interest rates lowered immediately so that you can make through on your promise to keep paying on the account.
That’s right…we’re just being honest and straight-forward with them on this one. Ask if there are any programs available that you can qualify for to accomplish this task.
Now, you may get a little push-back from them. If they tell you that they can’t do this, it is FALSE. Everyone can do this. They may ask why you can’t make the payments. If this happens, you may ask about medical hardships. You may have been hospitalized or even gotten sick in the recent year. Use this to your advantage. You’re not lying. I don’t care if you were lying on the couch watching SpongeBob when you were sick. Just mention a medical hardship.
Another one that works very well is to create competition. Tell them that you have a 0% offer that you’ve been looking at and thinking about moving all of your credit to these new programs. If you’re not offered a lower interest rate, you will have to move everything over to this new account and not work wit the current company.
Most of the time, they will be more than willing to make changes to your interest rates and account in order to keep you as a customer. Healthy competition seems to bring the best out in people.
Renegotiate Terms
This goes for loans more so than anything else. There are many strategies to lower payments and interest rates or due dates on just about everything else, but when it comes to loans, renegotiating your terms may be the best option. whether it is a car loan, a mortgage, a personal loan, or some other type of loan that is not listed, you may have to do something a bit more drastic in this case.
refinancing a home is an example of renegotiating your terms for a permanent fix. let’s say that you have a mortgage of 30 years and you’ve been paying on it for 15 years. your payments have been $1000 and you’ve been making that payment consistently. something happened and now you can’t make that payment every month. at the time of writing this article, interest rates are super low and there has not been any better time to refinance a house.
being that you’ve been paying on the loan for so long and that you are an existing customer and you have equity within the house from pain on it for 15 years, you may be able to ask for a lower Payment for your mortgage. you can have various options such as refinancing for another 20 or 30 year mortgage but at a much lower amount. You may even be able to get a 15 year mortgage with a lower monthly payment if you originally purchased the house at a higher interest rate.
now I know what you’re thinking. typically if you want to refinance your house within this scenario, You would take the latter option. If you only have 15 years left why would you add in under another five to make it 20? to be honest, I really would not recommend doing that, however, someone reading this may feel like they are out of all options and that they are drowning in a pool of debt with no hope insight.
I’m here to shed light in an area where there may be darkness. this may sound silly for many, but it may be hope for others. Plus, these are just examples of what you can’t do if you’re broke.
when it comes to other type of loans, you are able to use similar methods and strategies such as the refinancing example that I gave above. many times you may not be able to negotiate other terms. instead you have to basically qualify for a brand new loan to get better terms than the one that you currently have. Again, is this the best thing to do?
no not necessarily, but it is an option. if I’m sitting at a table with a group of people playing cards, I need to know what my best hand is, along with my other options so that when I’m presented with different scenarios, I know what I can do. the goal at the end is to simply win the game. the fact is that I may not be able to always play my best hand.
Man-Up (Stop Being A Punk)
It’s time to take the gloves off on this one. I have to be extremely blunt and upfront with you and this part of the article. not because I want to, but I have to. Why? because I had to be with myself before being tough with you.
I know being in this situation is tough, but the fact is that you put yourself into this situation. you spent the money, you filled out the paperwork, and you accepted the terms. you are in debt because of yourself and no one else is to blame. the faster that you can accept that, the faster you can exercise solutions to get out of debt.
the first step to saving money when going broke is to accept responsibility. If you cannot accept the responsibility, then you will always be stuck in this situation. this is part of the reason that I racked up so much debt.
I would gladly take responsibility of getting into debt, but I would never take responsibility of the actions I took after making more money and paying off that debt. I would make money and go into more debt. has created a vicious cycle and it got to a point to where I said I’ve had enough, and you have to get to the same point.
once I did this, I had to muster up the courage to log into all of my accounts, look at my exploding balances, and also write down the due dates for every single credit card and loan that I have. it took me a whole week to do this but I had to man-up and take charge of my life so that I can write out and live the goals that I wanted to achieve during my lifetime. I will not let that run my life and make my decisions. debt will work for me.
So if you haven’t already, go and grab all of your balances and due dates from all of your deptor’s and puts information down in a spreadsheet. I also use an application called mint that allows me to track all of my balances and bills so that I could see everything in one place, create goals, and budget myself accordingly. I told myself that I don’t need a tool like this for a few years, but after many failed attempts at tracked everything myself, it is obvious that I cannot trust myself at this time. so until then, Mitt it is.
Generate New Sources Of Income
This is one of my favorite subjects to talk about when it comes to money. this is what I’m really good at. you can put me on a street anywhere and I will figure out how to make money. I believe that one of my purposes here on earth given to me by God is to be a generator and distributor of money. money is a tool and a resource. it shouldn’t be an end goal. money is all around us, you just have to figure out a way to generate it.
You are reading this because you need to save money even though you are broke. take some time and sit down and think about how much money you need. after you figured that out, think about some ways that you can get it. during the pandemic, I studied and took tests 2 accumulate three different certifications that are known across the world. these certifications alone qualify me for jobs that bring in a minimum of $100,000 per year. I do contracting work in the technology field. I automatically get paid double the amount of money with these qualifications when I do a job. so why isn’t everyone getting these certifications?
it takes a little bit of time to study but there is also the fact that it comes down to simply not knowing. As a black man in America, this story resonates with me all too well. many times I am not Privy to this type of information which can change my life forever for the better. Thankfully, I’m a curious individual who loves to listen to affirmation recordings from old wealth thinkers. I’m coming up with ideas all of the time and through these articles I’m passing them to you if you take them. unfortunately I know that one in 10 people who read this will actually implement the strategies that I’ve written this article. This is also why people will not take the time out to study and get certifications in their field of expertise even if it means doubling their income in one year.
if you’ve been following me at all, you may also know that I am the king of side hustles. I have two blogs, multiple YouTube channels, social media agency, and a photo booth business, all of which I am trying to hit my goal of six figures per year for each business. pretty lofty but I know it’s attainable as long as I remain consistent. in today’s world you can do something as simple as creating a small course on something that you love such as making soap, in selling the video course to make money.
thinking out the box can be very rewarding if you’re getting paid for the things that you’re thinking about doing. if you’re a good teacher, look up some site gigs and Craigslist to see if you’re able to teach for an extra few bucks. if you’re a good singer, perhaps you can lend your vocals out as a gig on fiber.com, and laying some high paying contracts to be featured in a song or a commercial.
there are all types of things out there that does not involve a ton of energy or time in order for you to generate a new stream of income. I am an affiliate marketing coach and wanted the things that I teach my clients is to use what they already have, but the only difference is to make money from it instead of doing it for free. some of the links in this article in on my website are products that I use or recommend, but they are affiliate links. if you or somebody else decides to pay in order to use the same tools that I use and recommend, I get paid for bringing you as a customer at no expense to you. this is called affiliate marketing.
generating a new stream of income is extremely simple, you just have to sit down and take inventory of what you have and what you do in the things that you love to do, and figure out how to make money doing it. you’ll quickly learn that there are limitless opportunities out there and you do not have to join a networking company or some weird business in order to do so.
take 10 minutes out of your day right now, and brainstorm a little bit. see what you come up with. you may actually surprise yourself.
Conclusion
Saving money is like a sport. everyone seems to do it but only a few really take it seriously. those who really take it seriously separate themselves from the pack really quickly and you can see the difference. saving is very much to same concept. you have to be intentional and no where you want to go in life and how much money you want to accumulate. the game plan is then created and then it is up to you to execute.
learning how to save money when going broke… that’s a different type of game. now you’re playing to survive so that you may later thrive. the problem is that you don’t have any time to think about thriving because you’re still surviving. no one has ever told you that you can still creative blueprint wow executing on accomplishing your goals at the same time. You fell upon this article at the right time, so don’t be so hard on yourself.
take this journey step by step, and soon you will be giving advice to other individuals who were in your shoes. Let’s play this game to win.