Got an email yesterday from a PDITF reader (let’s call them Reader X) looking for ways to rid themselves of the paycheck to paycheck lifestyle. The email was much longer than the excerpt below, but I think you’ll get the gist…
First of all, let me say that I adore you and your approach to life. I read your blog with a sense of wistful jealousy and optimism that I too, some day, could have 76k in savings. That number is outrageous to me.
Whenever I read your blog, and other financial blogs, I understand they cater to people who are more… oh I don’t know… established with their jobs. People who could put $500 in savings a month with lifestyle tweaks and frugal changes. The point is, for my age, my salary is commensurate with experience. Meaning, I do not make enough money to have an “aggressive” savings plan like you and others. In fact, I am lucky if I have any money left over to save after my basic living expenses.
Do you have advice for your upstarts like me who are living on the exact amount of money they need to survive? Honestly, I feel terrible about myself because I am just treading water financially. I worry that something catastrophic will happen and my little $800 savings account wont suffice.
Before I get on with helpful advice, I have to rant for just a second and say I take issue with this line in Reader X’s email:
“Whenever I read your blog, and other financial blogs, I understand they cater to people who are more… oh I don’t know… established with their jobs.”
If my blog is catered towards people who are “more established with their jobs” then I have failed miserably. I’m 26 years old. I am by no means established, and I really have no street cred to preach financial wisdom to those that are. I would hope by naming my blog Punch Debt In The Face I am sending the clear message that this IS NOT a place for the “good ol boys”, but regular, everyday folks, who want nothing more than to see a stupid stick figure drawing, and maybe hear a little bit about what I have to say on the topic of personal finance. Moral of the story: I am the 99% 🙂
I really like Reader X’s perspective on his/her situation. Particularly this line “my salary is commensurate with experience”. There is no entitlement in that statement. Reader X also shared in the email they are living frugally, so typical advice like “find cheaper rent, or cut out your cable bill” doesn’t really apply.
So how does one increase savings, if they don’t have the ability to increase their income at work and they can not really decrease their already low expenses? You don’t. BOOM! How’s that for blunt personal finance?
Don’t be discouraged by this, Reader X. You are only 22 years old and have the rest of your life to pad that savings account. When I was 22, I was making $38,000/year, had $28,000 of student loan debt, and about $600 in my checking account. You have to persevere this “paycheck to paycheck” season as it is just that, a SEASON, a temporary stage of life. As you gain more professional experience, you will be able to market yourself better, which in turn should/could lead to promotions or a new (higher paying) job.
I didn’t go from negative $28,000 to $75k in the bank overnight. It took me YEARS to get to where I am, and it will probably take you a while to get there as well. Instead of feeling terrible for “treading financial waters”, be encouraged that you are not DROWNING like most other twenty somethings. You, my friend, are doing exactly what you need to be doing to set yourself up for success. Work hard. Keep your costs low. Save any discretionary income you can. And smile. This is an exciting, albeit scary, stage of life.
p.s. often recommended ways to increase income are 1) Start a blog (I made $13,000 from this one last year). 2) Tutor (I made $12,000 in 2009 doing this). 3) Find a second job (serving at restaurants, or delivering pizza, is flexible with most day jobs) 4) Be content. One through three all require more of your time, if you don’t want to give up free time, you have to be content with what you have. No one is just going to randomly walk up to you and pay you $2,000 a month to watch TV. Oh, you could always get married. Dual income ROCKS!!!!