While personal finance guidelines like paying yourself first, saving for a rainy day, and investing as much as possible are all great advice, they're simply not practical for everyone. If you are barely making ends meet the last thing you’re going to be doing is saving for retirement or stashing away money for your kid’s college education - no matter how badly you want to.
I know how it feels. I’ve been there before.
When I look back at how incredibly hard things were for me a few years ago to what they are now it’s a complete night day and transformation. As someone who not-so-long-ago had to work two jobs at $11.50 per hour to get by to now having solid financial systems in place, I know first-hand that it’s possible to change your situation.
Today I want to share some general and practical guidelines on what helped me. But, before we get into actual details I need to share with you the one thing I truly believe makes the biggest impact…..
Get Your Mind Right
When you’re barely able to make ends meet it is so easy to fall into a screw-the-world type of attitude. Trust me, I honestly know how this feels. When I was struggling and had no idea what I was supposed to do, I got depressed. It felt so much easier to just “accept” my situation than to do anything about it.
I spent a solid few months feeling sorry for myself rather than being proactive.
As hard as it may be, if you keep the blame-the-world attitude and run a repeat marathon in your head of “what-if’s” you’ll never get anywhere.
Before you can make any progress you have to stop feeling sorry for yourself and realize that YOU are the only person who has the ability to change your situation. Unfortunately, nobody else is going to do it for you.
Start with Housing and Transportation
Forget conventional frugal living advice. It’s not going to cut it.
When you’re already buying the bare minimum amount of the things you need clipping a coupon to save $0.25 has absolutely no benefit. Instead, you’ve got to make changes where they really matter. Housing and transportation is where you should focus your energy.
Housing – Housing can make or break your situation. In order for you to have a surplus of money to save you’ve first got to get your expenses way down. By focusing on housing you drastically lower your expenses with one swoop.
Some things to consider:
- Move – Find a cheaper a place to rent and move.
- Get a Roommate – Bring somebody else with you to help offset your mortgage or rent.
- Stay with Family – If you have friends or family who will gladly take you in stay with them until you’re able to build some savings and improve your income situation.
I stayed with my Dad for a few months and then purchased a trailer for $10,000 on a four year loan. My payment was $226/month – far cheaper than I ever would’ve got renting. While moving into a trailer definitely wasn’t a dream of mine it was a temporary sacrifice that I am now very grateful I made.
Transportation – This applies if you’re not driving a paid for vehicle. If you have a vehicle with a loan amount more than $5,000 and you’re not able to make ends meet, get rid of that car! I realize you probably need a vehicle to get back and forth to work but if you’re barely making it you should not have an expensive vehicle financed. If you do, get rid of it and get something much, much cheaper.
Optimize Everything Else
Dealing with the two big expenses, housing and transportation, should be main priorities. Once you’ve dealt with those optimize everything else. You want all of your expenses to be as efficient and simple as possible so that you don’t have to worry about them again.
Insurance – Call an independent insurance agency and have them quote your auto/renters/homeowner’s policy among several different carriers. Having your insurance “bundled” with one company is generally not the way to save money. Different insurance companies specialize in different areas. That means you can usually get a better rate through an independent insurance agency who works with multiple insurance companies.
Cell Phone – If you’re in a contract you need to get out of it. Most cell phone contracts are complete rip-offs. Instead check out this list and get your phone service for $50 or less per month.
Food – Keep it simple, don’t eat out, shop with a list, and cook at home. That’s pretty much all you need to do to keep your food costs in check.
TV – If you feel like you can’t live without TV use Netflix or Amazon Prime. I used to use a combination of DVD’s and Amazon Prime Videos since I already had a Prime membership.
If you need more ideas on optimizing these types of expenses you can check out an example of a $20,000 per year budget here.
Shift the Focus to Earning More Money
Once you have your expenses optimized you won’t have to touch them again. You should now turn your focus toward making more money.
Frugality and slashing expenses will only get you so far. You have got to earn more money if you want to permanently fix your situation.
There are SO many different things you can do to increase your income and this is one of the areas where it’s harder to give specific advice because we all have such different skillsets. However, here are some common and useful options:
- Freelance
- Start a side business
- Ask for a raise
- Find a different employer to work for
I personally find that starting a side business is the most beneficial. While it takes a lot of hard work in the beginning, starting a side business can lead to massive results once the initial work has been put in. If you need some ideas here are some 50 Ways to Make Money Side Hustling.
I started a freelance writing service on the side of my day job. (Here are ways to get started if that’s something you’re interested in.) I still worked my day job until I built up a solid emergency fund. When the freelance income exceeded what I was being paid at the day job I decided to become self-employed and expanded income earning streams from there.
Start experimenting but do NOT quit your current job. Build your emergency fund and have a solid plan first.
Put Your Financial Systems in Order
Once you figure out a way to bring in extra money you’ve got to put some financial systems in place.
The first thing you should do is build an emergency fund with at least 6 months’ worth of living expenses. After you get that funded you can prioritize other financial goals that are important to you.
Don’t Give Up
Your attitude is going to determine your success. Instead of complaining about what life has thrown your way you have to be proactive and do something about. It’s not always easy, it’s definitely not always fun, but it WILL be worth it in the end.
Editor: Clint Proctor Reviewed by: Robert Farrington
Alexa Mason is a personal finance writer, blogger, and entrepreneur based in Ohio who has been sharing her financial journey online for over a decade. She is the founder of SingleMomsIncome.com, a popular blog that chronicles her experience as a single mother building financial stability from scratch — one side hustle, budget win, and debt payoff milestone at a time.
Alexa writes from lived experience. When she became a single mom to two young daughters, she faced the same financial pressures that millions of Americans deal with every day: tight budgets, unpredictable income, the need to earn more without sacrificing time with her kids, and the challenge of planning for the future when you are barely making ends meet in the present. That firsthand perspective is what makes her writing resonate with readers who are in the thick of it.
At The College Investor, Alexa covers topics like frugal living, earning extra income strategies, debt payoff plans, and how to pay for college as an adult returning to school. Her articles are practical, encouraging, and rooted in the kind of advice you would get from a trusted friend rather than a finance textbook. She understands that building wealth is rarely a straight line — and she writes for readers who know that too.