Negotiating Expenses and Earning More Money

Written by: Scott Sery

Making the decision to start an emergency or opportunity fund is one thing, but when the budget does not allow much room to fund it, it will not do much good.  But there are a few ways to help things along in order to build up that important part of your financial security.  The biggest one is to start small, and then increase the amount being saved.

Saving money is not a difficult thing to do.  The biggest problem is the psychological hurdle we, as humans, set up for ourselves.  We do it with everything from desiring to work out and get in shape, to volunteering for a charity, to saving money.  Everyone knows what the right thing to do is, but very few people actually put things into practice.  By starting small, setting aside $25 per month, that hurdle is broken.  Chances are nobody will ever miss $25 per month.  After it has become habit to do $25 (setting it up automatically will make it even easier, more on that next week), increasing that amount to $35 or $50 should not be a problem.

Many people have bills that will not allow them to save even $50 per month.  If this is the case the next step is to figure out where money is being spent unnecessarily.  This does not mean you cannot enjoy a latte every now and then, this means focusing on the bigger wins.  For homeowners who have not refinanced their mortgage, this is the time to do so.  With interest rates basically as low as they will ever be, refinancing is not something to put off.  And it can help save a lot of money.  For instance, a person who has a $200,000 loan at 5.5% interest is paying about $1,135 each month on principal and interest.  If they were to refinance to 4.25% interest, their payment would drop to $983 per month.  By spending a couple of hours doing their research and doing a refinance, they save $150 per month.  3 hours “earned” them $150 every single month for the next 30 years.  In order to find even more money they could cancel their cable saving at least $50 per month, renegotiate their car insurance and homeowner’s insurance (or switch companies) and save another $50 or $100 per month, and combine some smaller savings, such as turning down the heat, skipping eating out, and renting a movie instead of going to the theater all to boost their monthly “extra” money to easily over $500.

After cutting expenses, and negotiating every bill possible, there still may not be as much leftover as a person may want.  In this situation the only solution is to earn more.  A person can only cut back so much on their expenses before they hit a limit, but earning more money has almost no upward potential.  In order to find where freelancing income should come from just think of what your talents are.  There is something that you do on your own, whereas other people hire out to have done.  Whether the talent is fixing computers, working on cars, or graphic design, there is somebody out there that is willing to pay for your expertise.  If nothing else, a second job will bring in more money.

By locating more money a person can get their emergency fund started.  Starting small will help get past the first psychological hurdle.  Increasing slowly will allow a person to grow their fund faster.  In the end, cutting expenses and making more money on the side can be a great boost for anyone, saving for an emergency or retirement.  Now that you know why and how to save, our next article will explore the best places to accumulate cash.


Negotiating Expenses and Earning More Money

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