I’m sorry to say that I’ve always felt like most of the personal finance advice on the internet seems to be lacking in reality.
I love people like Suze Orman and Dave Ramsey, but the idea that cutting out Starbucks from my budget is going to magically make me a millionaire is ridiculous. When I was rolling pennies to pay my rent, you can bet your ass I wasn’t thinking about Starbucks.
I’ve since fixed my broken budget and I’m well on my way to saving for a prosperous retirement, but I didn’t get there with the normal financial advice out there. Here are the 5 weird reasons I was broke and how you can keep from making the same mistake…
1. Your Money is Too Accessible
There was a time when I sucked at managing money so much that I had to hide my savings from myself. How’s that for will power?
And I know I’m not alone here.
I had a decent job, but it seemed that every time I would get a little extra in my checking account, I’d promptly buy something ridiculous. (“Why, yes I do need to order that “Perfect Bacon Bowl” contraption I saw on last night’s infomercial” or “I guess I should go ahead and buy these jeans. The sale ends on Sunday, after all” ). Ridiculous.
If you want to try hiding money from yourself, one of the best ways to do it is with a CD (certificate of deposit). You can head to your local bank or use an online institution like GE Capital which is offering a pretty awesome 2.23% interest rate right now. Even if you don’t have a big savings account, you should still lock away a few bucks for a rainy day.
2. You’ve Cut Up Your Credit Cards or Frozen Them
Alright, so I’ve tried the old “freeze your credit card in an ice block” trick. I’ll save you some time — it doesn’t work. At least not for me. Unlike the CD trick, I found my money was just too accessible in the freezer.
It didn’t take too long before I had an ice pick and a hair dryer beating down on that thing so I could make it to Target before they closed.
Sad? Yes, it was. But, I’ve also realized that it was kind of stupid.
You see, my credit card is an awesome source of extra income. I have the Barclaycard Rewards Mastercard (an easy card to get) which gives me 2 points for every dollar worth of groceries, gas and utilities that I put on the card. Plus, 1 points for every other dollar. And the points can be converted to real cash (1000 points = $10).
Consider that the average family spends $1024.70/month on groceries, $368/month on gasoline and $163/month on utilities. Just those purchase alone add up to an extra $31.11 every month. So, by freezing my credit card in an ice block I was effectively reducing my take-home pay by $373/year, at a minimum. That’s just dumb.
Yes, you can’t use credit card frivolously, but you should be using it for the purchases you have to make and then you should pay it off at the end of every month.
3. You’re Working Too Many Jobs
I know a lot of our readers are working 2 or 3 jobs and still aren’t able to make ends meet. You’re not alone.
Instead of focusing on how to find a 4th or 5th job, start thinking about ways to boost income passively. Income that doesn’t require you to work a ton of additional hours.
Obviously most types of passive income require you to have a huge investment, but there are also little things you can do to make money.
One of my favorites is the Media Research Panel smartphone app. If you install their app on your smartphone or tablet, they will pay you $5/month per device (their app helps media companies track how long were spending on Facebook/Twitter, among other things). And you can install the app on up to 3 devices. Plus they’ll send you a $5 bonus after the 12th week.
This is one of those things that takes about 15 minutes to set up and then you never have to think about it again. You just get to cash the check every month. All told this can add up to an extra $185/year.
Another good one is the ScreenPay app. This one is only for Android users, but they will pay you $3 month to let them display an ad on your lock screen. Who couldn’t use an extra $36 this year for 5 minutes of work?
Yes, you should absolutely be clipping coupons to save money on your groceries. But, if you’re clipping coupons out of the newspaper, I guarantee you, you’re doing it wrong.
In the last couple of years, higher value coupons have moved online. A lot of times you can find the same newspaper coupons for double the value online.
And, if you join a site like SendEarnings or InboxDollars, they’ll pay you extra every time you download and use a coupon. I’ve made an extra $32 this year just by downloading my coupons from those sites.
5. You’re Too Frugal.
When I was at the height of my own personal financial crisis, I seemed to be always thinking about how to save a buck. I canceled my cable. I turned off the air conditioner (In Florida. I kid you not). I’d even take extra ketchup packets from McDonalds to keep in the fridge.
Some of it was necessary, but overall it was demoralizing. I spent all of my time thinking about ways to sacrifice and deny myself. And inevitably, I’d end up cracking and splurging $200 on new video games at Best Buy to ease my depression.
I’m not saying that there aren’t plenty of us that could stand to ‘cut’ back a bit, but I think a healthier model would be to spend 50% of your financial thinking time on ways you can save money and 50% of your financial thinking time coming up with ways you can earn MORE money.
For some reason, so many people forget to think about the other side of the ledger. You need to make more money if you’re every going to get your budget under control.
Try taking a couple of surveys each month. I’d check out MySurvey & Springboard Panel. They are the two best survey sites, and if you sign up for both, you should easily make an extra $15-$30/month (most surveys pay between $3-$4 each for 20 minutes of your time). Heck, sometimes I fill them out while I’m watching Netflix.
If you don’t like those ideas, take a peak around the site. There are plenty of ideas on how to bring in some extra cash. Here are some of my favorites:
So, there you have it. Those are some of the crazy things I did to fix my budget.
Your Turn: Do you have any weird tricks to save more money?