Read the interview of a person’s take on “how I stopped living paycheck to paycheck and saved my first $1000.”
So, you’re living paycheck to paycheck.
You and the other 49% of Americans expecting to struggle in-between paychecks are probably wondering: how am I supposed to save up any money, let alone my first $1,000?
People living paycheck to paycheck choose a $1,000 savings goal for a number of reasons.
- Starting Dave Ramsey’s Total Money Makeover (saving up a $1,000 emergency fund before decimating your debt is Baby Step #1)
- It seems like a good number to have to give you a buffer between paychecks
Whether you want to start on Dave Ramsey’s Total Money Makeover plan, or just come up with some sort of emergency fund – I’m here to share with you money saving tips and a real life story of a woman who was able to save her first $1,000, even while living paycheck to paycheck.
How I Stopped Living Paycheck to Paycheck and Saved My First $1000
Wondering how to save a thousand dollars living paycheck to paycheck?
I actually interviewed several people about how they were able to stop living paycheck to paycheck and save that first $1,000.
Brittany Berry from theimiplace.com and her family (1 child, 2 adults) lived paycheck to paycheck from 2015 until 2018.
She defines living the paycheck to paycheck lifestyle as:
“When you don't have enough money to do anything extra. Your entire paycheck is spent on paying bills and buying the necessities, like paying for gas, food, insurance, etc. You're lucky to be able to save any money unless you put savings first and risk not paying some of a bill.”
Brittany explains why her own family was living this way.
“We lived in a high-priced city (Louisville, KY) made $12/hour with high rent and a newborn baby. Plus, we had our electric, gas (car and heat), food, insurance (health and car), diapers, babysitter, and I was doing some part-time work online, so we had to have internet.
By the time we were done putting our necessity money in our envelopes, there was like $20 left. We were trying to save money on top of that, but it's kind of hard to pay yourself when you literally don't make enough.”
Did you read that last sentence of hers? That it’s had to “pay yourself” when you literally don’t make enough money?
That’s actually the secret sauce to how Brittany got out of living paycheck to paycheck and was able to save her first $1,000 (and beyond):
She first earned more money through a side job, and she then got a new job altogether that paid much more money.
“At one point, I picked up an extra job in the evenings just to try to do something fun sometimes, but that didn't work out either. I was so tired from the second job, I couldn't spend time with my family because I needed sleep.”
Brittany and her family lived through some hardships while living paycheck to paycheck no savings – as all people living this lifestyle experience.
Her personal experiences include:
- Living in Fear: “I was afraid something major would happen, like a car accident or the car broke down and we couldn't afford to fix it.”
- Having to Ask Relatives for Financial Help: “…we let someone drive [our car] and they hit a curb. The expense was so high, we didn't have the money for it, and we couldn't “prove” that person did it. Thankfully, my mom was willing to help us.”
- Being Sent to Collections: “We had soooo many bills go to collections. It seemed like every day we would get numerous calls from somebody threatening us. We ended up changing our phone numbers to get away from it for a while. But then the mail threats started.”
- Having to Take Public Assistance: “At one point, we wouldn't have been eating or going to the doctor without food stamps and Medicaid.”
How Brittany was Able to Save Her First $1,000
When I asked Brittany what she wants people to understand who are going through this right now, she said, “Again, it doesn't last forever, but you have to take action to change your situation. Nothing changes if nothing changes!”
And, in fact, she and her family made some pretty big ones in order to save up that first $1,000.
1. Got a New Job
“We both found jobs that paid about $10/hour through temp agencies and worked overtime when we could. I'd rather work a couple hours of overtime than getting a second job because those hours add up quick at time and a half.
Then we started having trouble finding a babysitter, so my hubby stayed home with our son while I worked a job that paid $15.90/hour. I HATED that job. Kenny (hubby) got tired of sitting at home, so we traded places.
He found a job making $17-ish, and I found online work doing transcription. That's when our life changed. We were finally making enough to save $1,000 or more every single month, and then tax time came, and that really skyrocketed our savings account.”
2. Took Control of Finances
“The real reason we aren't living paycheck to paycheck anymore is being conscious about our spending. He's the free spirit and I'm the saver. Together, we were able to put a plan in place and stick to it the best we could. We still watch what we're spending, especially on things that don't really benefit us.
“We utilized an app called Every Dollar and the envelope system. We split all of our bills into four weeks for every pay period. Each week, we would take that much and put into our envelopes. It worked for a while, but it seemed like every time we were on track, another thing would hold us back again.”
If you’re just starting down this path, Brittany has a few words of wisdom for you.
“The best thing you can do is sit down, figure out what you’re bring home pay is, and what you're spending money on. Once you know those details, you can begin telling your money where to go in order of priority. And if you can't go out to eat or to the movies, then so be it.
Your bills and savings account are more important than that movie or restaurant. And no, restaurants do not count as groceries. But to get out of living paycheck to paycheck, you have to have determination. You have to get d**n mad at it and tackle the goals you make for yourself.
Again, it doesn't last forever, but you have to take action to change your situation. Nothing changes if nothing changes!”
3. Moved to a Lower Cost of Living Area
Brittany and her family moved back to her hometown, where she says everything is cheaper (though not rent).
How Brittany’s Life is Different Now that She Figured Out How to Save a Thousand Dollars Living Paycheck to Paycheck
And all of these massive changes have paid off. Not only do she and her family have that $1,000 cushion in an emergency fund (plus more, to boot), but they have invested in themselves and their future by starting a blog.
Brittany says, “Now, here we are with a hefty savings account through this economic issue while I don't have any work and he's laid off, but we're not scared we'll be evicted right now because we saved a lot of money.
During this time of not having work, we decided we were going to start a blog. So, we're getting content done every week and we're thinking about our own products to sell and help others.
The blog was a different story. We wanted to provide “quality” to our readers, so we decided to get “quality” software to help us in the meantime. We've spent quite a bit on our blog, but we know that we're investing in ourselves, which is different.
The biggest thing was not spending any money until we had some savings. Last year, our car stopped working on us and we were able to go out and get another one THAT day.
I don't want to sound mean or rude in any way, but a lot of times, people either put themselves there or keep themselves there. I'm not talking about single moms/dads making $10/hour with kid(s) in the home and trying to provide for them because it's not all their fault, but there are resources for them to get out of living paycheck to paycheck.
Pride is a big downfall for a lot of people. If you legitimately need help, even if it's from the government, then get it!
At one point, we wouldn't have been eating or going to the doctor without food stamps and Medicaid. There's nothing wrong with it, but nobody can help you if you don't speak up. (And don't try to cheat the system to get it either. I've heard of people trying to cheat the system and karma bit them in the butt.) The old saying goes, “A closed mouth don't get fed” is so true.”
How Can I Save 1000 Living Paycheck to Paycheck?
Three other people shared their stories with me, too.
Before Jana Brown from Bunch of Browns started to save up her $1,000, she had exactly no money in her savings account.
The reason she decided to save that first $1,000? Jana writes,
“When I gave birth to twins, we had a lot of debt, and I had a STRONG desire to stay home with my babies. We knew saving up that $1000 was the first step to freedom.”
The main reason she and her husband were living paycheck to paycheck was due to spending all of their money.
“My husband and I were bringing in a TON of money, over six figures. And we spent it ALL and then some. We had brand new, fully loaded cars that were 100% financed. We had 100% mortgages on TWO homes. Credit card debt. Student loans. Eating out. Shopping. We. Were. A. Mess.”
They were able to save up that first $1,000 by getting extremely frugal, as well as selling her “beloved” diesel Jeep.
Jana says, “We stopped eating out. No more meeting friends for Mexican food all throughout the week. I became a coupon whiz, and we stopped shopping for everything except groceries. We sold both of our cars. We cut cable and XM radio.”
And once they had that $1,000? They had to dip into it occasionally. But that doesn't mean they kept it below $1,000.
“Many times we had to dip into that emergency fund for car repairs, appliance repairs, etc. But we rebuilt it as quickly as possible.”
Someone else I interviewed who wishes to remain anonymous says that she wanted a safety net “we could fall back on in the event we had a washer go out, the car needed major repairs, or one of us unexpectedly wasn’t working. I knew if we could save up that first $1,000, we would be motivated to keep saving. I hate relying on credit cards for major purchases and want to be able to have cash on hand if we need it.”
Before she started on her $1,000 saving journey, she, her husband, and their child only had credit cards to rely on.
“We had a significant amount of credit card debt, car loans, and my student loans. We were not living paycheck to paycheck necessarily, but it seemed that most of our money was going towards debt. And we used our credit cards so much- we felt like we have this much in them, might as well swipe it and use it some more.”
Here's how she saved $1,000:
“It took about 10 months for the first $1,000 to be saved. I had $50 direct debited from our account every two weeks. I went to my bank and filled out a form to have $50 direct debited from our account every two weeks (coinciding with our pay days). I knew if we didn’t see that money, we wouldn’t miss it.
She also had to dip into that savings at one point. “We, total, had about $1600 saved and had to use $600 for tires on my husband's truck. It was a little hard to take the money out because we worked so hard to save it, but it felt great being able to pay for what we needed and not use a credit card!”
Mama Bear from Mama Bear Finance had about $100 in her savings before starting her $1,000 savings journey.
“I was living paycheck to paycheck as a student. It was really hard to avoid lifestyle creep because all my friends were splurging, so I also felt strong FOMO and was not saving as much as I should have.”
She started saving her first $1,000 as soon as she got her first part-time job. Getting a higher paying job is what really helped her, though. “It took about 6 months after I got a higher paying job.”
Tips to Stop Living Paycheck to Paycheck
Let's talk about a few specific tips each of these guys gave me in order to stop living paycheck to paycheck.
1. There is Power in Changing Jobs
Never underestimate the power of changing jobs, just like Brittany did from above. When you change jobs, you have the potential to increase your salary at a much higher level than if you were to get an incremental pay increase at your current job.
Changing jobs also helps when you’re in a company or organization where there is no room for you to be promoted.
Changing jobs can have other financial benefits, too, if you shop around well enough:
- Save on Commute Costs: Allows you the chance to find work closer to your house, saving you on commute costs.
- Paycheck-to-Paycheck-Proof Your Retirement: When you’re in the job search phase, look for companies that are known to have good benefits, such as matching more of your contribution towards a 401(k). This is a perk that can make a huge difference to you not living paycheck to paycheck in your retirement years.
- Get Free Training that Will Make You More Valuable: When my husband changed his job last year, he really made a career move. His new job required a Top Secret Security clearance, as well as expensive, top-notch IT training that he would normally have had to pay for out of pocket. Both of these things have made him more valuable to the job market for the next time around when he’s seeking employment.
- Get a Job with a Flexible Spending Account: If you’re paying for childcare, then you want to search for jobs that offer a Flexible Spending Account. This lets you put pre-tax dollars into an account that you then can use to pay on qualifying expenses – such as childcare – which will save you hundreds and possibly thousands of dollars.
2. Don't Be Afraid to Sell Things
Jana and her husband sold their diesel Jeep, even though they really loved it. It was just the thing to jumpstart their $1,000 savings in the bank.
3. Set Up a Small Amount Debited into Savings
From the anonymous person I interviewed, “Every little bit helps! Even if it’s only $5 right now, as you save and learn better money management you’ll be able to save more. And if you’re able to have it taken directly from your checking account to the savings account, do that. It makes it so much easier and you don’t miss the money. And, it makes it harder to take the money and spend it if it’s in the bank versus your sock drawer at home.”
Mama Bear did this as well. “I made sure to pay myself before I spend. This means that I would put away $150-$200 a month into savings directly. Having direct deposit was very useful.”
4. Put Your Emergency Fund FIRST
Mama Bear from Mama Bear Finance says, “The most important things is to avoid overspending. This means that no matter what, always put savings before spending so that the emergency fund can grow.”
5. Don't be Afraid to Put Together Several Side Hustles
“We have an income below the poverty level; it’s not easy to save when every dollar is spent meeting basic needs, and it is taking a lot of diligence and perseverance to meet that resolution. I’m saving from our personal income and I’m doing odd jobs to make extra cash from home fast, babysitting, mystery shopping, selling everything but the kids, taking advantage of money-making coupon and rebate deals at the grocery and drug stores, and anything else I can find to bring in a little extra money to meet my goal. I decided to blog about my experience in saving and taking charge of my personal finances.”
Advice for Others Living Paycheck to Paycheck
Jana says, “I know it feels hopeless. I know it feels like being buried alive. But wow! The feeling of freedom is worth it!! We now have 6 children and homeschool. I have a side gig that allows us to take amazing trips and pay cash for our vehicles, but earlier this year, my husband’s workplace was shut down and he was laid off. I can’t tell you how peaceful the whole experience was. We didn’t experience panic or fear. We were thankful for all of the steps that we took to get us where we are today.”