Earning minimum wage and trying to build wealth can be a tough balancing act. While many believe the issue is not earning enough, the truth, is regardless of how much money you earn you can still end up living paycheck to paycheck. Yes, increasing your income is one way to build wealth, but managing your expenses can be just as effective. And there is no exception to this. If you’re earning minimum wage, there are a plethora of actions you can take to slowly and consistently build your savings and emergency funds. When I was making minimum wage there were several things I did to quickly increase my savings. With discipline and consistency, I quickly saved my first $1000. In this post I’ll share how you can quickly save your first $1,000 too.
Make Your Own Lunches
Making your own lunches and taking them to work is a great way to save money. As simple as this sounds, I was able to save between $6 and $10 per day by making my own lunches. That can be left over dinner from the night before or sandwiches with fruits on the side. I was able to save about $30 a week and $120 per month. The more you spend on lunches at work, the less you are able to put away for your savings. Not only will your savings increase, but so can your overall health. The pizzas and burgers that are usually offered for lunches can cause increased weight and cholesterol. Both these ailments can result in spending more money at the doctor than you would if you consumed a healthier diet.
Prepare Home Cooked Meals
After noticing how much I was saving by making my own lunches, I started purchasing less takeout for dinner. Mind you, I was spending $50 per week at the grocery store, but would still end up ordering takeout/delivery 3-4 times a week. My go to takeout restaurant was Domino’s Pizza which would cost around $20 (including tip). I could easily spend $80 on takeout/delivery in a week. Once I started taking my finances seriously, I decided I’d increase my weekly $50 grocery shopping to $65. That gave me more room to buy more items that I liked and would actually cook. So instead of spending $520 ([50*4] + [80*4]) per month, I started spending $260 (65*4). By cutting out take out I was able to spend approximately half of what I usually spend for the month on food. Preparing your meals at home is one of the fastest methods to save your first $1000.
Find Low-Cost Entertainment & Hobbies
One of the hardest parts of managing your finance is balancing the fun stuff with saving. We all want to socialize with our friends, go to parties and treat our nephews to new toys. However, if your serious about saving that first $1000, you’re going to have to find low-cost entertainment and hobbies. Instead of going out shopping, go on a scenic hike. And instead of going to brunch, plan a picnic in the park and bring your own cheese and cracker platter from the grocery store. Furthermore, there are also low-cost hobbies that you can explore that will suits your liking (look out for a future post on this!).
Keep A Coin Jar
Have you ever heard of a swear jar? Well, I kept a coin jar. That is, each time I got change back from a purchase I made, I put all the coins I received in that jar. I’d keep putting more coins in the jar until it was full. I’d then take the jar to the bank and deposit it’s content into my savings account. You’d be surprised how quickly you will be able to save your first $1000 just by keeping the change.
Stop Buying Coffee
Firstly, let me say I don’t love coffee. What I do love is the caffeine boost in the mornings before work. Before catching the 73 bus in the mornings, I’d stop at Dunkin Donuts and purchase a cup of coffee. While Dunkin Donuts is cheaper than many other brands, it’s still and expense that can accumulate over time. I did not purchase coffee every morning, but I bought it frequently enough to notice a difference when I stopped. For my caffeine boost, I’d instead purchase a packet of Lipton tea bags from the grocery store for $3.99. This packet contained 100 bags, therefore, would last about 2 or so months. As you can see, by being creative or consuming less of something, you’ll be able to quickly save your first $1000.
Having roommates is probably one of the biggest factors that allowed me to quickly save my first $1000. Rent in NJ is expensive and rent in a good neighborhood in NJ is even more expensive. So, instead of spending $1500 monthly for a three-bedroom apartment, by dividing the rent into 3 parts, you’re only spending $500 per month. The same goes for any utilities such as electricity, cable and internet. Rent is one of the largest fixed expenses in your budget and this is a good way to reduce it.
While there are many ways to save $1,000 these are the methods that worked best for me. If you practice them you’ll also quickly save your first $1,000. In no time I had saved $1,000 and in time obtained a better job where I could save as much as $10,000. Whatever you choose to do the key is to be disciplined and consistent. Create well meaning and strong goals that will keep you motivated as you work to achieve them. If you want to know the best strategies to use to create financial goals check out my blog Personal Finance: Goal Setting.