How to Manage Your Money If You Make Less Than $60,000/Year
You know your finances could use some serious TLC, but you’ve been putting it off… and off… and off.
When you finally do sit down to think about it, you immediately become overwhelmed. Which goal do you attack first? You need a budget, a savings plan, a debt-repayment strategy, a better credit score, a plan for retirement and… oh, you’re running away again, aren’t you?
How to Manage Your Family Budget on Less Than $60,000/Year
Let’s face it — after taxes, that salary goes pretty quickly.
Calm down and come back. To tackle big goals, you have to start small. Here are 11 simple steps to help you manage your family budget.
1. Simplify Your Budget
An integral part of managing your money is creating a budget. Ew, gross. We know. But it’s important to take a good look at what you’re spending and where.
If you’re not sure where to even start, we favor the 50/20/30 budgeting method for its simplicity. Here’s how it works:
- 50% of your income goes toward essentials.
- 20% goes toward financial goals.
- 30% goes toward personal spending.
The key is to accept you can’t create the perfect budget in an hour. Take the time to experiment to find what works best for your salary of less than 60k, then use the extra money to grow your budget. Win-win.
2. Find out if You’re Overpaying for Car Insurance
There’s no way around it — you have to pay car insurance. But when your budget only allows for so much wiggle room, how can you be sure you’re not overpaying?
Have you compared rates from the 20 largest auto insurers that do business in your area? That sounds kind of difficult and time-consuming, doesn’t it?
Fortunately, a service called Gabi will do it for you, and you don’t even have to fill out any forms.
Simply link your insurance account and provide your driver’s license number, and Gabi will go to work.
Once you link your insurance account to Gabi, it will:
- Scan your existing insurance plan.
- Analyze what coverage you have.
- Compare the major insurers’ rates for that same coverage.
- Help you switch on the spot if it finds you a better rate.
Gabi says it finds an average savings of $720 per year for its customers. Hello, bigger budget.
It is a true apples-to-apples comparison at the same coverage levels and deductibles you currently have. Once you sign up, you never have to shop again. Gabi’s software has your policy on file and keeps on monitoring for savings as your life changes.
3. Invest in Real Estate (Even If You’re Not Wealthy)
Want to try real-estate investing without playing landlord? A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
In addition to four rental properties, Christopher and Meghan Miller have invested in a diversified portfolio of real estate projects across the country — from Washington, D.C. to Los Angeles — through Fundrise’s automated investment experience.
“I don’t have to manage them; I don’t have to do the work to improve the properties; I don’t have to find tenants, evict tenants,” Christopher says.
They follow the progress of each project they’ve invested money into through Fundrise, and Christopher receives automatic payments directly into his checking account.
But remember: Investments come with risk. While Fundrise has paid distributions every quarter since at least Q2 2016, dividend and principal payments are never guaranteed.
You’ll pay a 0.85% annual asset management fee and a 0.15% annual investment advisory fee.
4. Give Your Credit Score a Boost — Add up to 300 Points
A really easy way to do this is to get a “credit report card” from Credit Sesame.
Credit Sesame is like your favorite teacher from high school — without the pop quizzes.
It gives you a free credit score, plus lays out your credit history so you can see exactly how much money you owe and to whom. It even tells you your monthly payments and interest rate, as well as which debts (if any) are in collections.
And you don’t have to stay home to do it. The Credit Sesame app lets you keep track of your credit score and ways to improve it — on the go!
To keep a closer eye on your credit, you can also get a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how you might address it.
James Cooper, a motivational speaker, raised his credit score 277 points using Credit Sesame. Now he talks to high school students about the importance of having good credit and uses what he’s learned through Credit Sesame as a blueprint for his lessons.
“We want to touch the Z Generation,” Cooper says “We’re not in the business of fixing credit. We want to get to you before you have to fix your credit.”
5. Enjoy a No-Spend Day
Farmers market? Museum? Nature? It’s easy to get sucked into spending money on weekend outings, but there are plenty of free activities you can do today, instead.
You can search your local newspaper, magazines or websites for plenty of ideas. Here are a few to help you get started:
- Go on a penny date. The rules are simple: Have your date or a family member pick a number between one and 30, pick a street corner and have them flip the penny. If it’s heads up, turn right. If it’s tails up, turn left. Do this at each intersection for whatever number they chose. Wherever you end up is where you’ll spend the day.
- If the weather’s nice and you live near a body of water, head to the beach for the day! The beach offers a full day of entertainment and relaxation at potentially no cost.
- Not near a beach? Plan a day of hiking. You can find a ton of free tails. (If you live near a national park, take advantage of the free admission days.)
- The library is a treasure trove of freebies, including free museum passes. Maybe you’ll even check out a book or two.
6. Secure $1 Million in Life Insurance for Just $25/Month
“The biggest mistake I see millennials making is being duped by insurance salesmen,” says Andy Yadro, a financial planner with Googins Advisors in Madison, Wisconsin. “Everyone needs insurance, but a very small subset of young people need the insurance that is sold by most ‘financial advisors.’”
You might feel like a life insurance policy (even an affordable one) isn’t in your budget — like it’s something for people with six-figure incomes. But even if you consider a basic policy, it can be useful if you have loved ones who rely on your income — a significant other, a child or even a relative you help out financially.
A company like Policygenius offers you an easy way to compare and buy life insurance. Unlike traditional providers, this online-only platform provides an easy way to apply, and it offers instant quotes from top carriers online to help you make a quicker decision.
To get your quotes, you’ll just enter some info about yourself and your health online. Once you choose a life insurance company, you can apply right online, and a Policygenius rep will give you a quick call to ask a few follow-up questions.
7. Get Paid Every Time You Swipe Your Debit Card
Those cash-back credit cards are wicked cool, aren’t they? Unfortunately, it can be hard to qualify for these cards. The Credit Card Gods are awfully picky when it comes to handing them out.
We found another option, though.
One of our favorites is Aspiration’s Spend and Save account. This online account comes with a debit card that gets you 0.5% cash back on purchases. It basically turns your debit card into a cash-back card.
Plus, you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
8. Let This Company Pay Off Your Credit Cards
A lot of us are being crushed by credit card interest rates north of 20%. If you’re in that boat, consolidation and refinancing might be worth a look.
That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands of dollars in interest.
Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.
If your credit score is at least 620, you can borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 3.84%. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands. Repayment plans range from 24 to 84 months.
Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
So even if you’re simply curious about what’s out there, know that checking rates on Fiona won’t hurt your credit score — and can probably save you in interest.
9. Cut $80 From Your Grocery Bill
Your income might be fixed, but your budget doesn’t have to be. Meat is expensive — challenge your family to give it up on Mondays (or any one day of the week) to cut your grocery bill down significantly.
If you’re not sure how to still get an adequate amount of protein, Penny Hoarder contributor Kelly Gurnett compiled a list of 10 meat alternatives that’ll be cheaper than the real stuff.
It might be challenging at first, but once the savings start rolling in, you’ll feel so much better knowing you can use them to pad your budget.
10. Save Money on Every Gallon Pumped — Automatically
You know your salary, and you’ve set your budget accordingly. But you can almost always find areas to cut costs. Use GasBuddy to help you find the cheapest gas station in town. It’s an easy — and free — way to avoid overpaying.
But once you pull up to the pump, here’s something else you can do: Swipe your Pay with GasBuddy card to automatically save 10 cents per gallon on your first purchase (and 5 cents per gallon after that).
The free discount card is tied directly to your checking account. It works at 95% of gas stations throughout the country, so you don’t have to drive around town just to find “your” station. Plus, you don’t have to wait for a rebate — it’s immediate savings.
Simply and securely sign up through GasBuddy. Connect your bank account, enter your address, and GasBuddy will put a card in the mail.
11. Ask Your HR Department These Questions
Got a new job? Here’s what to do next: Enroll in your company’s 401(k) plan ASAP so you can start saving for retirement. And yes, it fits in your budget!
As much as you want to be prepared for present-day responsibilities, the last thing you want is to leave old(er), future-you with bills, bills and more bills.
If your employer sponsors a 401(k) plan, you should have access to people who can answer questions in your best interest — HR.
And you’re going to have questions, because, well… 401(k)s are tricky. To get the most out of your plan, here are some important questions to ask to ensure you’re putting your retirement savings in the best possible hands:
- Does your employer match?
- Where is your money invested?
- Can you rollover from your existing 401(k)?
- What fees are you paying?
- What can you do if your plan sucks?