If you have read The Money Challenge, you are familiar with the eight money milestones:
- Milestone 1: Start giving,
- Milestone 2: Save $1,500 for a minor emergency.
- Milestone 3: max out your 401(k) or 403(b) match.
- Milestone 4: Pay off all debt except your mortgage.
- Milestone 5: Save 3-6 months of living expenses for a job-loss level emergency.
- Milestone 6: Put 15% of your gross income to retirement.
- Milestone 7: Save for college or pay off your mortgage.
- Milestone 8: Live generously.
Let’s assume you have already started giving, hitting your first Milestone. You are now ready to pursue Milestone 2. Saving $1,500 may seem like a daunting goal, but it can be reached more quickly than you probably realize. Minor emergency savings is accomplished through a combination of cost-cutting and income creation.
Consider these suggestions:
- Sell some stuff. I bet you have some items sitting around your house that you have not used in a few years. This is a good indication that you really do not need those items. So sell them. There are a number of online platforms that allow you to sell your items. Our community has a Buy/Sell page on Facebook. The page has become our go-to for items we want to sell.
- Get a gig. There are a number of different ways you can earn extra income. Drive for Uber. Sell homemade products on Etsy. If you have know-how, develop a website for a company. Of course, if your company offers overtime, pick up a few hours. The opportunities to earn extra income are seemingly endless these days. Try one or two.
- Avoid restaurants. Millennials eat out a lot. But they are not alone. You are probably spending more money eating out than you realize. So cut out restaurants for a while and save a few bucks by making your own food at home.
- Renegotiate rates. When was the last time you contacted your cable, Internet, or cell phone service provider to talk rates? These types of service companies offer discounts on a regular basis. Make sure you are taking advantage of them. Also, customer service representatives often have the ability to reduce your rate, even when a discount is not advertised. So talk to them about a rate reduction.
- Budget. I know. You hate that word. But budgeting can help you identify where you are overspending. You may find out that your $1,500 was hiding right under a few unnecessary purchases. Get your expenditures in line with your income, and try to set aside money for savings each month.
You can get to $1,500 faster than you think. Find a few ways to temporarily increase your income while decreasing expenditures. This combined effort will leave you with $1,500 in the bank in no time.
God designed us, not to be hoarders, but conduits through which His generosity flows. As I mentioned in The Money Challenge, current savings allows for future generosity. We save to give.