Hello beautiful mama! It’s now week 10 or so of lock down and I know we are all feeling stressed in this never-ending battle of juggling life. Things are tough and more and more people are starting to get laid off. No sector seems safe from job loss unless you are an essential worker. Even then there is no guarantee. That is why now, it’s more important than ever to save an extra $1k this month to hold you over when sh*it hits the fan. Trust me it will hit the fan in some way or another as everyone is being impacted by this virus. In my previous article I discuss the 6 money Do’s and Don’ts to Make During the Corona Virus. One of my recommendations is to save $1k and put it towards your emergency fund. In this article, I break down in detail exactly how I did it.
This $1k that you save should be deposited directly into your emergency fund. An emergency fund should be easily accessible and invested in a high yield savings account. I personally use Capital One 360 because at the time they had the highest interest rate. I’m also easily able to move money around without any fees.
There are varying opinions as to how much you should have in an emergency fund. I recommend having a minimum of three months’ savings to cover your basic expenses if you lost your income tomorrow. By basic, I mean that you have food, shelter, and any other imperative items to survive. You should save as much as you need to sleep soundly at night. However, many people don’t even have enough money in the bank to meet the minimum recommendation.
Ok, I have a challenge for you. Whether you are living paycheck to paycheck, or have money in the bank, I challenge you to figure out a way to save an extra $1k this month for your emergency fund. Take the $1k challenge! Now is the best time to do it so what are you waiting for? Step 1: Save $1k this month. (It’s easier than you think right now) Step 2: Put the $1k into your emergency fund. Step 3: Share how you did it with… Click To Tweet
I want you to accept this challenge to not only create financial security for your family but for psychological reasons as well. If you can figure out a way to create an extra $1k in a month, you will prove to yourself that you are resilient and can handle provide when you need too.
To some of you, this challenge may seem insurmountable and to others saving $1k for a crisis fund is a walk in the park. It doesn’t matter, take the challenge. Mr. Investor Mama (my husband and baby daddy J) and I did it and I can’t stress enough how freeing and empowering it was for us. We proved to ourselves that we can truly control our money and figure out a way to make things happen financially in a short period of time. Of course, you can take on a side hustle or part-time job to increase your income but given the current times, that may not be so easy.
That is why we gained an extra $1k by looking at our budget first. Read on and I’ll share with you exactly how we cut $1k this past month from our expenses.
Note: This does not include the additional $1.5k we saved in daycare costs because we had a baby and saw an increase in expenses for clothing and diapers. We also donated money to those in need during the epidemic and bought entertainment items such as crafts and activity books to keep our toddler busy in quarantine. These items totaled less than $1.5k but I’m keeping daycare cost out to be conservative with our savings.
How we saved $1k this past month
For those of you who are a numbers geek like me, I went into the nitty-gritty. If you are not a numbers person skim over them but understand how we cut our savings without drastically changing our lifestyle. Many of the items we cut from our budget were not that much money but if you add them up altogether, we were able to save over $1k this past month.
- $120 from reducing our dinner take out budget
We stopped ordering out as much. Each order was about $30 and we’d order out twice a week for four weeks. We cut that in half and ordered in only once a week.
($30 x 2 x 4)– ($30 x 4) = $120 in savings
- $100 from reducing lunch budget
Mr. Investor Mama you lost your income tomorrow would also spend $10 a day for lunch totaling $200 ($10 x 5 x4) per month. He still needs to eat lunch but reduced his expense in half (probably a little cheaper but I’m being conservative) by making his own lunch. That yields another $100 in savings.
($10 x 5 days x 4 weeks) – ($5 x 5 days x 4 weeks) = $100 in savings
- $20 from canceling our Blue Apron Subscription
We canceled our Blue Apron account which was $60 a week for three meals. Instead, we switched to Dinnerly for $60 a week for 5 meals. Let’s say $5 a meal per person that’s $20 in savings.
$60/3 meals /2 people= $11 per person per meal vs. $60/5 meals /2 people= $6 per person per meal
($11 x4 weeks) –( $6 x 4 weeks) =$20
Insurance = $100
- $100 by shopping around for new homeowners and auto insurance
I originally had Geico for our car insurance. I called them up to ask them how much we could save this month since I had been a loyal customer and a good driver. They said if I took an online driving course (super easy to do and only cost $12), they said they could reduce my monthly payment by $60. However, Mr. Investor Mama and I had been considering purchasing an umbrella policy for a while. I called our mortgage broker and with adding this policy and combining our auto and home insurance, we are now able to save $100 a month with much better coverage.
Now is the perfect time to call your insurance carrier and ask them to lower your monthly payments. Many are offering discounted payments due to COVID-19. I also encourage you to shop around or ask a mortgage broker too and see if you can pit companies against each other to earn your business.
Housing = $300
- $300 by refinancing
Right before COVID-19 hit, we were in the process of refinancing our house. Our taxes had just increased by an additional $200 per month. By refinancing we were able to reduce our mortgage payment to $100 less than we were paying before the $200 tax increase. This Refi actually saved us $300 a month.
In addition, we got a phenomenal deal where we only paid about $4k in closing costs. However, we do not have to make a mortgage payment for two months and received a refund from our escrow account of about $5k so it was definitely worth it for us.
Phone Bill = $20
- $20 by adding my mother-in-law to our plan
We called Verizon and asked them if they would give us a better deal on our cell phone plan because we had been loyal customers for so many years. They said they couldn’t so we shopped around. Given that I use a lot of data each month, Verizon was still the best carrier to meet our needs. However, we discovered if we added more phone lines, we could lower our monthly payment. We, therefore, decided to add my mother-in-law to our plan saving us $20 and her $10 per month. This may sound insignificant but these small savings add up.
- $210 for a monthly train pass
I was able to save $210 for my train pass this past month by not commuting to the city.
- $40 for subway rides
I usually bike to and from Penn Station to work. Not biking only saved me pennies since it’s only $210 annually for the CITI bike pass. However, I’d still spend at least $40 a month on my subway card. I’d take the subway when I’d get out of work late and wouldn’t have enough time to bike to Penn Station to make the train. I’d also take the subway in the morning if there were train delays or not enough bikes available to get me to work on time.
- $90 on gas
By working from home, we were able to reduce the number of times we got gas this month. Usually, I’d get gas twice a month and Mr. Investor Mama would get gas once a week at about $30 each time. Because we’ve been in lock down, I only got gas once and he only got gas twice. I saved $30 and he saved $60.
- $30 on E-Zpass
By limiting our traveling, we also saved on our E-Zpass expenses. Usually, we’d spend about $60 a month but last month we only spent $30.
After going through this exercise myself, I discovered the following key takeaways that you can learn from to help you save your own $1k. If we can do it at an extremely high cost of living area, so can you!
- The best way to save is to first figure out where your money is going every month.
- To have the most impact on your savings, cut from your most expensive budget items, which usually are housing, food, and transportation.
- Every dollar saved helps so don’t scoff at only saving $10 here and there.
- Take action and call all of your providers (insurance, utilities, cell phone carrier, etc.) and ask them what they can do for you. You’d be surprised by their response.
- There is always a way to save money if you are creative enough.
- When you do save money, transfer that amount right into your savings or you will find a way to spend it on something.
That’s Great, But I Can’t Save $1k
Some of you maybe reading this article and think that sounds great, but I only bring in $1k after taxes, how am I supposed to save. Or, you may have already cut your expenses to the bare bones. If this is you, then it’s time to start considering ways to make more money. You can do this a few ways:
1. Selling stuff in the short term
2. Getting a promotion at your job (this one is extremely tough right now as businesses are figuring out ways to cut salaries to save)
3. Buying an asset like an income producing property to cash flow (this is great but you may not be interested in becoming a landlord or have the startup capital.
4. Gaining a new skill set to obtain a higher earning job
5. Starting a business or side hustle.
We did not sell anything this month as I did not have the energy to start going through items that we’d want to get rid of. Having a newborn was enough for us! As much as I’d like to get a promotion, I don’t see that happening in the foreseeable future during the pandemic. I love the idea of buying assets but I know that is not feasible for everyone. If you can, I strongly encourage you to do so!
For most of you, I think #4 and #5 are great places to start. I know working with kids is extremely time consuming and draining. I’m living it now. But, if you can teach yourself a new skill (youtube is great for this), now is a good time as the economy is shifting. Some jobs will become non-existent soon and other jobs that we can’t even imagine will be created post Covid-19. I can see jobs in the area of healthcare, supporting remote working, starting online businesses, and sales in a virtual world to name a few, taking off in the near future.
In addition, you can earn more money by starting a business or a side hustle. If you want to learn how to make money and don’t have a lot of time is helping businesses with Facebook ads. This can be very profitable. If you are interested in learning more about what this is and how to get started, I highly encourage you to check out the Facebook Side Hustle course. It was created by Bobby Hoyt and Mike Yanda from Laptop Empires. I went through it first hand and it was an awesome way to make significant extra money even while taking care of the two kids. It’s such a fantastic skill set to have because so many small and large businesses can benefit from Facebook Ads when done properly.
Another great way to earn side money in a growing field (especially now in a changing economy) is by being a Pinterest Virtual Assistant. There is an amazing course that Kristen Larsen and Gina Horkey put together. It teaches you step by step what a Pinterest Virtual Assistant does and how to make it a very lucrative side hustle. They even walk you through how to land your first client and how much to charge. Click here to check out more information on it. These are just two ideas to help you increase your income.
I will go into these money making strategies in more detail along with other ideas in a future article so stay tuned!
I hope you found value in this article and can apply some of the ways we saved money this past month into your own life. I was very transparent with my numbers so you could see first hand how it was done. A lot of people talk about saving $1k in a month, but it is another thing to see it laid out in detail. I beg you to please go through the exercise yourself and take the #1ksavingschallenge. I promise, you will thank me later for it!
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