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Are you feeling like you are just hemorrhaging money??
That’s how I have felt all year. We had planned on a new roof. What we didn’t plan on after getting the new roof was that the refrigerator would die, the car would blow up, our washing machine quits, and we would also need new box gutters.
What are you supposed to do when you are spending more money than expected?
First off, don’t panic. It will be ok. It’s just a small rut. Think back to other hard financials times. You can survive the money hemorrhage.
Let me repeat this: You can survive this.
Let me also add: Do NOT have a knee-jerk reaction. You need to keep a cool head and an open mind.
Quit spending money if you feel like you are losing money faster than you can make it.
Maybe that seems obvious, but I’ve seen people do it. Don’t have your house in foreclosure, while you are still eating out every day and drinking gourmet coffee! Stop spending. Pay only the necessary bills, and save the rest!!
Dip into your emergency fund if you need to.
Be sure it’s truly an emergency. A leaking roof – emergency. No car to get to work – emergency. ( A new TV, keeping the cable on, or buying a new suit is NOT an emergency.)
Make sure you build back up your emergency savings fund. If you are like us, when it all went downhill, that fund was depleted. I would recommend building back up a $1000 emergency fund. Do not delay on this. If you do use your emergency fund (and it IS there for emergency), then build it back up immediately!!!
If you are hemorrhaging money, you need to start prioritizing. We needed the roof fixed, a new car, a new refrigerator, and a new washing machine. (Now, if it’s your TV that has broken, that’s not emergent, and you shouldn’t immediately replace that if you don’t have the means to.) However, we didn’t need to eat out every night. I started using our freezer food stash rather than buy extra groceries.
You can cut out frivolous costs. What you save should go into that fund. For example, I love Starbucks and usually get a frappuccino every time I go get my Kroger ClickList. If I cut that out, that’s about $5 a week – and $20 a month. Speaking of Kroger Clicklist, you can cut it out too. I LOVE my Kroger Clicklist as you all know, but it’s about $5 for this service. So, now we are up to about $40 a month just by cutting out those Starbucks and not using the ClickList service. Think about everything you do on a weekly basis that is frivolous, and unnecessary. Cut that out, and then save that money away into your emergency fund.
Start setting back $20 a month. You can easily have an extra $100+ dollars by reserving $20 a month, and you could be even more aggressive with those savings based on your income. Maybe $50 a month, if you have the means. All you need to do is cut out FOUR fancy coffee drinks to save $20 in a month. It’s doable.
Get rid of cable. Get rid of your expensive cable bill, and use what you save for Christmas. There are plenty of good alternatives to cable, such as Netflix, Hulu, or Sling. We personally use Sling. It’s affordable, very reliable service, and we get everything we want to watch (yes, even Food Network!). We have had Sling for probably almost 2 years now.
Save your change. Do you just throw your change down in the bottom of your purse like I do? Save all that change. At the end of the week, take all your coins and put them in a jar or box. Don’t touch the change, and at the end of the year, take your change to a bank or machine that will turn it into dollar bills.
Look for additional sources of income
Sell your things
Sell what you don’t use or need anymore! Have a yard sale, sell at consignment, sell on your local Facebook yard sale site. Sell on eBay. (I actually paid off a whole credit card by doing this!)
You can also sell things using The Amazon Trade-In Program. You can sell back your books, games, kindles, and cell phones to Amazon. Did you know you can do this? Yep, you sure can! The Amazon Trade-In program allows customers to receive an Amazon.com Gift Card in exchange for eligible items including video games, Kindle E-readers, books, and more. The process is easy and convenient, you get an immediate offer and free shipping. I actually sold all my nursing school textbooks back through Amazon!
(Note: If you use the Amazon Trade-In Program, you will get an Amazon card rather than cash. What I suggest is that you buy something with that, and the cash you have saved, deposit into the emergency fund!)
Make Extra Money Online
You can do this in multiple ways.
I personally like to use Swagbucks. You can earn points by answering very quick (3-5 min) surveys, shopping online (which I already do), or just browsing your web. I wrote a blog post about Swagbucks and the multitude of ways to earn Swagbucks. If you sign up through my referral link, you will get a bonus $5 to start with!! Instead of cashing in for gift cards, you can cash in for PayPal deposits, and use that for your emergency fund.
Use grocery store apps to get cash back from things you are purchasing. I use Ibotta and Checkout 51. Both of these are ways to scan your grocery receipts (Target, Dollar General, Kroger, Walmart), and earn cash back that can be paid out as a Paypal deposit. I wrote a more detailed post about both of these free apps and you can read about them here.
Make Extra Money at Home
This can be done in multiple ways. Do you make any crafts that you can sell locally or on Etsy? Can you offer babysitter services on Saturday nights?
Teach a craft. I love to knit. I’m a proficient knitter, and I like teaching others the joy of knitting. I actually taught a few beginner knitting classes at a local arts and crafts gallery. I charged $15 a person and capped my classes at 10, so I did pretty good for two hours of knitting.
Rent out your things. This can be almost anything. Think outside the box. I have a crafty friend who enjoys weaving but has multiple looms. She rents out her looms she isn’t currently working with to others – usually in 2-week increments. This is brilliant! A lot of times, the person who rents it from her wants to try their hand at weaving without making the large investment up front.
My Biggest Financial Mishap and How I Fixed It
Cutting costs, finding other sources of money/income, and using your emergency funds are just the basics. I know things can be very bad at times.
If you find yourself struggling and those basics cannot help you, then you should ask for help.
If you have student loans, you can often call the lender and ask for a deferment. I don’t recommend this unless it is absolutely necessary, but you would be surprised at what they will help you with. You might be able to put it on hold while you try to get back on your feet.
You could also ask a family member for help if you are drowning in the loss of money.
Once you finally do find yourself back on your feet, and you will, then your number one priority should be to never get into that kind of shape or pickle again. Go back to building that emergency fund, and try to think about what you can do to prevent any future money losses.