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.