Have you ever read those articles about how someone paid off $30k in debt in one year. Or became debt free in six months by taking six little steps? Or what about the one on how to save $500 this month!?
Remember earlier this week how I told you I paid my car off six months early? That took me FOUR and 1/2 YEARS.
The flaw in every one of those articles is that you *have to be* overspending by upwards of $30,000 a year for any of them to work. And for those of us that actually need to save money to pay the household bills, that just ain’t happenin’.
You and me? We are lucky to even have enough money to cover the bills let alone have $10 left over to save. There was a day, not all that long ago, where I didn’t even have enough money to pay my monthly bills.
Anyhoo, back to why those money saving articles don’t work for those of us that *need* to save money.
The Starbucks Habit
First of all, I don’t have a Starbucks habit. Most of us that are on a tight budget don’t. Don’t get me wrong, I do love Starbucks, but it’s more like twice a year than twice a month. It’s a treat, not a habit.
But that is really only part of why that theory doesn’t work. They also usually quote two Starbucks visits per day a $5 per visit. (Um, WHO visits Starbucks twice a day??? ) So, $10 per day or $3,650 per year.
So just that one line puts me behind this savings game by $3,650.
Refinance your house
First, this point assumes that you even own a house. I do, but many people don’t.
Second, if you have bought that house at any time in the last 10 years qualifying to refinance at this point is almost as likely to happen as being struck by lightning twice. While standing in the same spot. It is near impossible. Because the housing market has been in such a flux that if you’re a new homeowner you don’t have 20% equity and no matter how good your credit, you don’t qualify.
But they say refinancing can save up to $150 per month. $150/ month = $1,800.
Another $1,800 behind.
Switch Your Cell Phone Service
Unfortunately, the great deal that sucks us into a phone plan in the first place, also locks us in to a costly contract for two years, and if you’ve needed any type of upgrade at any time you were locked into two years from that date. Ultimately, if you’ve locked yourself into a contract you’re stuck for a long time.
They usually quote this savings at $100 per month. Another $1,200 year.
This same thing goes for cable/internet service. If you are within your contract, you have to wait it out. When you can switch, it can be a good savings.
Stop paying for services
Oh, I looooove this one. It suggests that you stop paying for services like a housekeeper, babysitter, weekly manicures or the personal trainer.
One look at me (and probably you) and you’ll know why this one is even more silly than the Starbucks habit. Those of us reading a money saving article out of necessity don’t have any of these with the exception of the babysitter. And we can’t get rid of the babysitter because then we can’t go to work to pay any bills.
I don’t know what the going rate for a housekeeper or personal trainer are, but I’m guessing this one puts me down upwards of $20,000 per year.
Eat at Home
This one, in theory, is great advice, but again those of us already on a tight budget are not eating out.
But one family dinner out per week at $60 is $3,120 per year.
Work From Home
Save $200 per month by working from home because you save on gas, and eating out for lunch. Just the eating out part saves $1,300 per year. Gas and wear and tear upwards of $2,000.
This also puts someone without that option behind the savings game $3,300.
The only thing I get out of reading those articles is a big, fat nothing. Not one of those steps really apply to me, but those steps save more than $33,000 so it’s all good on paper, but WHO CAN DO THAT?
So stick with me over the next few months and I will help you. Through simple little steps I will show you how to squeeze an extra quarter, or maybe even $10 out of each month. $10 x 12 months = $120. (Not $33,000.)
Through mistakes and successes, I have learned that there is no path to becoming debt free or saving money that is easy quick or pain free. All of it is a bit painful, and takes a long-term goal to complete.
Slow and steady wins the race. You in?