Saving one month of mandatory living expenses is the first step to creating your emergency fund/cash reserve. This is critical to starting your financial foundation. As mentioned in the article, “What do I do first – Pay Down Debt or Save”, there are only two ways to start your savings plan:
Increase Your Income
OR
Reduce Your Expenses
You can accelerate your plan by doing both simultaneously.
This article will highlight 25 ways to save your first month’s living expenses fast.
Decrease Your Expenses
Reducing your expenses is probably the easiest and quickest way to save money. It forces you to become creative with your resources, determine what is a need vs. a want, and prioritize what you really value. You strengthen your discipline muscle when exercise restraint to focus on your goals.
Word of Caution: Although reducing your expenses is quicker and you have control over it, there is a limit. If you continue living, you cannot eliminate all your expenses.
Here are 12 ways you can reduce your expenses to save your first month of living expenses.
Meal Prep
Food is one of the main categories that people overspend. Meal Prepping not only saves you money but saves you time (which is currency itself). Scheduling and preparing your meals for a week in advance can greatly reduce your food expense. If you are really advanced, prep your meals for all 3 meals – breakfast, lunch, and dinner.
Typically, most people order out when they are too tired to cook after working a long day at work. Eliminate the stress of cooking, by doing it in advance.
Brown Bag Your Lunch
Now that you have prepped all your meals, don’t forget to take it to work with you. Even if co-workers want to grab lunch, ask if you can bring your food or if they want to bring their lunch back to the office so that you can eat together. Let them know you have goals to achieve and that you have to make the short term sacrifice now.
Increase Your Insurance Deductible
If you have a low deductible on your auto or home insurance, that means you are paying more in your monthly premium. You can reduce your monthly premium by requesting a higher deductible. The logic this is that the higher the deductible, only submit serious claims that exceed the deductible threshold will be submitted. All other minor damages will be covered with your new reserve account.
Here is the tradeoff:
Low Deductible = Higher Premium
High Deductible = Lower Premium
Keep more of your monthly income and only submit claims when necessary.
Cancel unused subscription services
Are you really watching Hulu, Netflix, Sling, and Amazon Prime? Do you need all the latest newspapers or magazines? Or do you need to be a member of all these clubs, communities, or groups?
It’s time to evaluate what is providing you the most value and cancel all the rest. This can be a temporary decision, but you must decide if this is more important than your goals. Total all your monthly subscriptions and ask yourself, do I really need this right now? If no, cancel it.
Reduce or eliminate your cable bill
Cable prices have gotten quite disrespectful. If you haven’t reduced your cable bill in a while, it is time to negotiate with the provider, switch providers, or cancel the service altogether. With the internet, there are so many other low-cost alternatives to the typical cable bill.
When I cut the cord, I used an antenna to get free over the air channels. It provided all of the major networks and several other channels. It was more than sufficient.
I cannot find the model that I currently used because it was years ago but click here for a viable option.
Reduce your cellular data plan
Wi-Fi will become your best friend. If most of your phone bill is due to your data, it’s time to consider a new way to access the internet. Download your podcasts or music to your device while you are connected to Wi-Fi. Only use the data when necessary.
Call your creditors to ask for an interest payment reduction
If you are carrying a balance on your credit cards, call the company and ask for a rate reduction due to solid payment history. There is no guarantee that they will say yes, but it does not hurt to ask. Sometimes you have to shoot your shot. The worse they can say is no.
Delay hair and nail appointments
If you go to the hair and nail salon every week or every other week, consider going once a month or stretching it out longer if you can. Another option would be to learn to do it yourself for a while. I know this is unpopular, but it is a temporary sacrifice for a worthy goal.
Choose Free activities or host a potluck to socialize with friends.
Instead of spending $50 to $100 for dinner and drinks, host a fun night in with friends. Request everyone bring a dish or a drink to share with everyone. This is a low-cost way to fellowship with friends while on a budget.
Suspend gym membership
Call your gym to see if they have the option to suspend your gym membership while you are saving your first month’s expenses. There are many low-cost ways to exercise without equipment and classes at the gym. An option could be to run outside your neighborhood or take a class on YouTube. There are several free classes that you can complete from the comfort of your home.
Here is one of my favorite yoga channels: Yoga with Adrienne
Avoid Sales Advertisements. Buy Only What You Need.
Advertisers know how to grab your attention and entice you to spend money. They are trained to do it. Twenty percent off coupons and limited-edition emails flood your inbox weekly, if not daily; all with the effort to increase their income by decreasing yours.
If you are constantly tempted to buy, unsubscribe to all of the retail sites and avoid going to the mall. Remove your credit card from your computer or cell phone to make it difficult to order online.
Trust me, another sale will come around when you have the cash to purchase it.
Downsize Your Living Space
This one is a huge commitment but can reap tremendous rewards to your cash flow. If you have more space than you are using or the space is filled with unwanted stuff, consider downsizing to a smaller living area.
Not only will you save on monthly rent or mortgage payment, but you will also save on the utilities because it will cost less to heat and cool the space.
In 2018 I made the leap to downsize from a 3-bedroom townhome to a 1-bedroom apartment. Through this move, I was able to save an additional $500 per month and drastically reduce my commute time.
Learn more about minimalism here.
Increase Your Income
While reducing expenses has a limit, increasing your income is limitless. The only limit is the ceiling you place on yourself.
Request Overtime hours
If your employer has this option, you should sign up for additional hours to build up your cash reserve. All the additional income should fund your first month, then you can decide if you will continue working overtime to pay down debt or go back to your regular schedule. The key is to have a plan for the additional income that does not include supplementing your lifestyle.
Work a seasonal part-time job
If your job does not offer overtime, you can look for opportunities to work in temporary, seasonal type work over the holidays. Another option is to work for the Census Bureau, this typically only occurs once every 10 years, but they offer temporary jobs that flexible to your schedule.
Find Census Bureau jobs here.
Drive for Uber or Lyft
If you have a car that meets the criteria, this is an easy side hustle to pick up and start earning money on your schedule. Drive when you want and earn income from each ride with tips. Also, a few times a year, these companies offer a bonus after driving a certain number of rides or referring a new driver who completes a certain number of rides.
Rent Your Car to a Car Sharing Service
If you don’t feel like driving anyone else around, loan your car to a car sharing. This way you can turn your car into an asset that pays for itself without you exchanging your time for money.
If you live in a city where you rarely drive or have plenty of public transportation option, this could be a good way to earn additional income. Check the site to see how much you could earn monthly.
Rent Your Car on Turo.
Charge scooters in your home
Companies such as Lime, a bike and scooter sharing company, pay people to find and charge the scooters at home. The average earnings per charge are between $5-7 dollars per scooter. Depending on how many scooters you can collect and charge, you can earn hundreds of dollars over the weekend.
Become a Lime Juicer(Charger):
Delivery Food with companies such as Doordash, Uber Eats, Caviar, Grubhub
If you do not want to drive people around, another option is to deliver food. This option also allows you to earn money on your schedule when you need it. If you do not have a car, Uber Eats also allows people to use a bicycle to deliver food. This drastically reduces the barrier to entry into this side hustle.
Learn more here: Doordash, Uber Eats, Caviar, Grubhub
Deliver groceries
Another option to make some side cash is to deliver groceries. As people become busier and busier, they are constantly looking for ways to save time and make their schedules more efficient. You can easily fill this need and make some cash on the side.
Learn more here: Instacart
Host a yard sale
If you have a ton of stuff in your closet that you do not wear and items in your home that you do not enjoy, consider hosting a yard sale. There are always people looking for low-cost, gently used items that can be repurposed.
You can also coordinate a neighborhood yard sale and request a participation fee for all the families who want to sell their items. In this event, you earn money through organizing the event and selling your stuff. Double win!
Save your tax refund
It’s tax time and if you are getting a refund, this is the perfect opportunity to fund your first month’s expenses. You may have had other plans for this windfall of money, but you must prioritize your financial future over your short-term gratification. Trust me. Your future self will thank you.
Rent unused space in your home (house hacking)
If you do not want to downsize, house hacking is a way to earn money by sharing unused space in your home. This could be something as simple as getting a roommate to help offset the cost of your housing expenses OR you can rent your room or coach on Airbnb or HomeAway.com. You can determine if it is an overnight trip and long term stay. You can also do this while you are out of town and your home is vacant. The world is moving to a more collaborative, sharing environment. Monetize your unused space.
Learn more about renting your space here: Airbnb and HomeAway
Declutter Your Home and sell your used goods on online
If you do not feel like hosting a full yard sale, consider selling your unused or unwanted items online. Sites like poshmark allow you to post and sell from anywhere you have wifi. Just make sure you can make it to the post office to mail the sold items.
Another great site that has a ton of traffic is Amazon and eBay.
Learn more about selling online here: Poshmark, Amazon, eBay
Host an Airbnb Experience
If you know your city very well or are willing to learn more about the area, consider creating an Airbnb experience. Some cool experiences I saw in Rio were individual and group photoshoots around the city or unique tour experiences. Specifically, I went on the Little Africa walking tour in Rio de Janeiro and it was a wonderful experience. Consider creating something that is low-cost with minimum overhead and makes it available for tourist who visit your city.
Learn more here: Airbnb Experiences
Freelance Your Skills
Skills pay the bills….and can make you wealthy. Too often, we discount the things that we know how to do and consequently, lose out on earning income. If you can fry a mean chicken, bake a delicious cake or cupcake, braid hair, sew clothes or whatever, offer your services. Don’t assume that everyone can do what you can because they cannot or may not want to. That’s where your value comes in. If you do not feel like you have skills (you are wrong), but you can learn some quickly. Go to your local public library and learn about a topic that interests you. Once you learn it, teach it to someone else. Then monetize it.
Final Thoughts
I encourage you to implement multiple strategies from this list to build your first month’s expenses and then increase your reserve account until you reach at least six months. Once you have your financial foundation in place, that opens the doors for more wealth building opportunities.