How to Lower Your Bills: Ways To Survive On A Low Income

How to Lower Your Bills: Ways To Survive On A Low Income

Financial struggles are a reality for many people. In a world where cost of living keeps rising while wages seem to stagnate, it’s essential to find strategies to lower your bills. Here are some effective ways to make the best out of a difficult financial situation when your income is low.  

Here is 10 ways to lower your bills

  1. Analyze Your Spending and Set a Budget

The first step is to know where your money goes. Use free budgeting tools like mint.com or everydollar.com to track your expenses. Once you have a clear picture of your spending, set a strict budget. Allocate your money towards necessities like food, rent, utilities, and other bills, before setting aside anything for luxuries.

  1. Prioritize Your Bills

Not all bills are created equal. Some are more important than others, especially when you’re working with limited income. Your mortgage/rent, utilities, and food should take top priority. This approach is sometimes referred to as the ‘envelope method’, where you put cash in envelopes for different categories, and once it’s gone, it’s gone. The Balance provides more information on how to prioritize your bills, see thebalance.com for further tips and tricks to help you out.

  1. Cut Down on Energy Costs

Lowering your energy consumption is a great way to reduce utility bills. Use energy-efficient light bulbs, unplug devices when not in use, and consider using cold water for laundry. The U.S. Department of Energy, energy.gov, provides a comprehensive guide on how to save energy at home.

  1. Downsize Your Home or Consider a Roommate

If you’re spending a significant portion of your income on rent or mortgage, it might be time to downsize. Moving to a smaller apartment or house can significantly lower your monthly cost. Alternatively, consider getting a roommate to share the cost. Websites like roommates.com can help match you with potential roommates.

  1. Reduce Grocery Bills

Eating at home is cheaper than dining out. Plan your meals in advance and make a list before you go grocery shopping. Stick to the list to avoid impulse purchases. There are many resources available online, like BudgetBytes, that provide affordable and healthy recipes and can be read here at budgetbytes.com. Further on, choosing off brand products may often be a cheaper alternative making the final amount on the reciept even lower.

  1. Utilize Public Transportation

If possible, use public transportation or carpooling instead of driving your own car. This will reduce your spending on gas, maintenance, and insurance. Solutions like erideshare.com can help you find a carpool in your area. 

  1. Negotiate Bills

Sometimes, you can negotiate down bills such as cable, internet, or insurance rates. Call your service providers and see if there are any promotions or discounts available. One of the well known sites eg. NerdWallet, provides a good guide on how to negotiate your bills. Check out more tips and inspiration over at nerdwallet.com.

  1. Get Help with Bills

If you’re struggling to pay your bills, don’t be afraid to seek help. Many government programs can help with food, utilities, and healthcare costs. Benefits.gov can help you find theassistance programs you may qualify for (source: benefits.gov).

  1. Cancel Unnecessary Services

Look through your regular expenses for services you don’t need or use. This can include gym memberships, cable TV, magazine subscriptions, and more. If it’s not essential, consider canceling it to save money. Every membership may not be expensive by itself, but combined there are a lot to save!

  1. Buy Secondhand or Swap

Consider buying items secondhand or swapping with friends or family to save money. Websites like Craigslist and Facebook Marketplace have many secondhand items, and Freecycle is a great resource for free items in your local community.

Final tips

In a low income situation, it’s important to use every strategy you can to stretch your dollars. Every bit of saving can help make life a bit easier. Remember, it’s not just about surviving, but finding ways to live comfortably within your means.

Always seek professional advice when making big financial decisions. The strategies outlined here can help you get started on the path towards financial stability, even on a low income.

A salary negotiation is an excellent opportunity to clarify your positive contributions over the past year. It is important that you are thoroughly prepared with factual arguments and spesific examples wich your boss can identify and relate to. I have listed below 20 useful tips and examples that will guide you trough the one of the most important talks you could have on your job.

Read more on my previous post on how to negotiate your salary – step by step!

How To Negotiate Salary: Step By Step

How To Negotiate Salary: Step By Step

When talking salary with your boss, it’s important to be well prepared. These are the arguments you should bring with you! 

A salary negotiation is an excellent opportunity to clarify your positive contributions over the past year. It is important that you are thoroughly prepared with factual arguments and spesific examples wich your boss can identify and relate to. I have listed below 20 useful tips and examples that will guide you trough the one of the most important talks you could have on your job.

Preparation

1. Timing. If possible, arrange a meeting about salary when you have performed well. For example, you have successfully completed a project, improved productivity, furthered your education, or acquired knowledge that makes you more flexible in the company.

Another job offer could, of course, also be a natural precursor (see separate point). Choose a good time of day. Do not choose Friday afternoon – most people are transitioning into weekend mode.

2. Determine level. What do others earn in comparable positions with about the same education, seniority, and experience as you?

Check, for example, through the trade union. High demand for your area of expertise could mean increased salary for you. Specify for yourself the maximum and minimum level. Be ambitious, but realistic. Consider why the employer should agree to it. Strong bargaining chips could be fringe benefits.

3. Performance over the past year. Refer to the agreed goals and expectations from the last employee interview. How did it go? Assess your tasks with a focus on the development of responsibility, authority, and difficulty.

Examples:

  • Have you taken on more responsibility?
  • Have you achieved the company’s goals?
  • Achieved qualitative and quantitative results?
  • Completed and finalized tasks within deadlines?
  • Have you done what is expected for your salary?
  • Are you satisfied or less satisfied with the salary?
  • Have you taken initiative and shown engagement for the tasks?
  • Taken responsibility for and respected decisions and guidelines?
  • Been proactive, for example, worked to prevent, simplify and clarify?
  • Personnel responsibility: As a manager, have you given clear assignments and motivated employees?
  • Corporate responsibility: As a manager, have you actively taken budget responsibility for your own area of ​​operation?

4. Different personalities. Look at how you can adapt communication and give concrete examples that make sense to the boss.

5. Tailor-made arguments. Build arguments based on the needs of the business. Keywords can be responsibility, performance, result, quality, quantity, initiative, and collaboration ability.

Also, include other points that are important for the company’s goals. Effective arguments are short, simple, concrete, and easy to remember. Economic arguments are almost always strong arguments.

For example: “I have, together with Marit, streamlined the call time on the phone by about x minutes, so now we answer x customers instead of x, an increase of a full x percent. Which results in the company saving x.”

6. Prepared for objections. Make a two-column of your own arguments in one column, against the boss’s possible objections to respective arguments in the other. The two-column makes you well prepared, while unprepared questions can make you lose control.

Execution

7. Appearance. It’s not just the arguments that are important, but also the way they are presented. Make sure the conversation is good and constructive.

Be clear, avoid words like “think” and “maybe”, they undermine the power of what you say. Speak calmly, for example, by resting a little on the vowels.

Speak clearly and pronounce the last syllable of the words. Occupy the room, straighten up and radiate confidence.

8. Listen – Responsive – Calm. Three typical characteristics of a good conversation are: Listen. Responsive. Calm.

Some people say they listen when they actually sit and think about what they will say next. Then you miss information and added value. Responsive: Try to be responsive to the underlying so-called meta-message.

Use the responsiveness to read what is not expressed in words, but is still there. Calm: “Speak in anger, and you will deliver the best speech you ever regretted,” said Winston Churchill. Cicero also mentioned that a calm conversation is successful. Humor can also be liberating.

9. Conversation agenda. Get yourself well into the room and spend time on some small talk. Otherwise, stick to the subject. The agenda can include work done related to the last employee conversation, new tasks, and other points of value.

The boss then gives his view: Have you achieved the goals? Kept to schedules? Met expectations? And the boss may explain the connections to salary.

Then there is a dialogue. The boss may come up with a proposal or message about salary. Then repeat what you agree on – it is easy to talk past each other. Take notes along the way.

10. Easy questions first. When you take the easy questions first, the chances of you having a good conversation climate from the start increase.

11. Initiative and specific examples. Participate in steering the conversation by taking the initiative on various questions and other points you want to emphasize.

Focus on what you want to achieve. Give the boss a picture of your successful results over the past year. Clarify with concrete examples. Ask the right questions, but not the ones that make you look naive.

For example, the following question can be constructive: “How do you reason in this case?” or “What can I do to increase my salary?”

12. Show your ambitions. For example, show plans for improvement in the area of ​​responsibility you already have; a desire for new challenges or relevant courses in your spare time that increase your competence.

13. Another job offer? If you have a real job offer from another workplace, you can be stronger in salary negotiations. Signal that you are motivated for your current job, while letting it shine through that you may have alternatives. NB! But proceed cautiously and do not set an ultimatum. In the worst case, you could risk being without a job.

14. Raise with fringe benefits. Better than getting a hefty salary increase, it may be to get good fringe benefits.

The benefits could, for example, be: further education, company car, home PC, parking, or shares and options. See the post about fringe benefits on the next pages. Does the company have bonus schemes?

If not – might it be natural to suggest such a scheme for the company? Such schemes can be an offer for all employees – including you.

15. Don’t stress decisions. 80% of all important decisions in a negotiation are made in the last 20% of the total negotiation time.

Don’t be too eager to finish quickly even if it’s tempting because of the strain.

A salary conversation is emotionally charged for both bosses and employees, shows Granqvist and Regnérs Saco study from 2007. A real dose of self-insight can make the conversation easier.

Ending

16. Conclusion. You have taken notes along the way. Now you can summarize and check if you have understood correctly. The boss may now announce if you’re entitled for a raise or not, and specify the new salary if you got it. If it became a deadlocked situation, take a break or schedule a new meeting. No matter the outcome, finish nicely with a smile, eye contact, and preferably a handshake.

Evaluation

17. Notes are worth their weight in gold. Did you get little out of the salary talk? Maybe the company is not among the wage leaders, but instead offers a large degree of freedom, co-determination, and fringe benefits, or maybe you have a job that provides valuable content? Keep good arguments, write down what went well, and what went less well. The notes are worth their weight in gold for upcoming workdays and before the next conversation.

 

 

9 Unique Ways To Make Money

9 Unique Ways To Make Money

In today’s fast-paced world, having multiple income streams is a common approach. Whether it’s your day job, a side hustle, or a combination of both, there are countless ways to generate income. It’s not just about working harder; it’s about working smarter. In this article, we’ll explore various strategies to generate money from both personal and financial perspectives.

I have listed below 9 different ways to generate income. Some build apon certain types of skillset you may posess that other values and would give a payment for. Others ways may be limited to your own willingness and capacity to invest your hard earned money to make them grow into something bigger! 

 

1. Develop a High-income Skill

High-income skills are specialized abilities that can earn you a substantial income. Lately the need for manpower with digital expertice have been next to impossible to fulfill. Relevant jobs in the digital world depends, but to name a few skills that go hand in hand include copywriting, digital marketing, programming, and others. They’re in high demand but have relatively low competition, meaning you can earn significantly above the average income if you master them. Websites like Coursera and Udemy offer many courses in these areas as a way to start out if you are new to the game.

 

2. Start a Side Hustle

A side hustle is a way to make money outside of your 9-5 job. It allows you to make more money that’ll give you the freedom to pursue your passions, buy things you need or want, and lower any financial worries. Chris Guillebeau‘s side hustle school provides many real-world examples of individuals who found ways to create new sources of income.

 

3. Invest in Real Estate

Investing in real estate is another great way to generate income. Rental properties, for instance, provide a steady monthly income, while properties purchased in up-and-coming areas can provide substantial returns when sold. Websites like BiggerPockets offer a wealth of information on getting started with real estate investment.

 

4. Stocks and Bonds

Stocks and bonds are traditional ways of building wealth. Through buying stocks, you gain ownership in a company and can benefit from its success. Some of the stocks may pay out dividends as well, wich means a passive stream of income while only owning the stocks. Bonds, on the other hand, are essentially loans you make to corporations or governments, which pay you back with interest. Information on investing in stocks and bonds is available on Investopedia.

 

5. Peer-to-Peer Lending

Peer-to-peer (P2P) lending is a method of debt financing that enables individuals to borrow and lend money without the use of an official financial institution as an intermediary. Websites like Lending Club can get you started with P2P lending.

 

6. Crowdfunded Real Estate

Real estate crowdfunding allows you to invest in real estate along with other investors, typically through a platform that organizes and facilitates these investments. Platforms like Fundrise enable you to get started with a small investment compared to traditional real estate investing.

 

7. E-commerce

E-commerce has been a popular way of making money online, with many successful entrepreneurs establishing online stores on platforms like Shopify. You can sell products, both physical and digital, or even dropship products from suppliers directly to consumers.

 

8. Online Education

With the shift towards remote learning, online education has been booming. You can create and sell online courses in your area of expertise on platforms like Teachable or Skillshare.

 

9. Affiliate Marketing

Affiliate marketing involves promoting products or services and earning a commission when someone buys through your referral link. Websites like ClickBank and Amazon Affiliate Program offer a wide range of products you can promote.

 

It’s important to remember that making money is not a get-rich-quick scheme. It takes time, effort, and consistency. But with the right approach and the willingness to learn, it’s definitely achievable. The sources mentioned above are just a starting point. Dedicate time to deepen your understanding, develop a strategy, and make your financial goals a reality.

Remember to consult with a financial advisor before making any significant investment decisions. Here’s to your success!

    How To Manage Your Money And Make Them Grow

    How To Manage Your Money And Make Them Grow

    Based on the principles and research in personal finance, this article delves into effective strategies to manage and save your money. Through an understanding of various articles and studies, it outlines ways to promote financial health and grow wealth over time.

    In today’s world, managing personal finances efficiently has become increasingly vital. This understanding of financial management goes beyond mere saving; it encompasses budgeting, investing, and planning for future events (The Balance, 2021). Sound personal finance habits are linked to reduced financial stress, improved quality of life, and a sense of financial security (Joo, 2008). This article is a comprehensive guide to understanding and implementing methods to save money based on various studies and reliable sources. It will also delve into the role of behavioral finance in saving money, highlighting key concepts that influence our financial decisions.

     

    Understanding Personal Finance

    Personal finance refers to the management of financial resources and decisions, including income generation, spending, saving, and investing (Xiao & Olson, 1993). Fundamentally, it is a balance between inflows and outflows. Effective personal finance management necessitates thoughtful budgeting, goal-oriented saving, wise investing, and judicious spending.

    This foundation is critical because it is the baseline upon which we build our discussion on saving strategies. Furthermore, in the words of renowned financial author Robert Kiyosaki, “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for”.

    Establishing a Budget

    An article from The Balance (2021) reiterates that the cornerstone of financial management is a well-planned budget. Budgeting involves tracking income, categorizing expenses, and setting saving goals. It offers a visual representation of where money goes, thereby providing an opportunity to identify and eliminate unnecessary expenses.

    Creating a budget involves several steps (Kapoor et al., 2011):

    1. Identify income: Start by calculating the total income, including salaries, rental income, or dividends.
    2. Track expenses: Record daily expenses, including rent or mortgage payments, utilities, groceries, transportation, insurance, and personal care. Categorize them into ‘needs’ and ‘wants.’
    3. Set saving goals: Determine short-term and long-term financial goals, such as building an emergency fund, retirement savings, or funding education.
    4. Create a plan: Allocate income for each category – necessities, wants, and savings. A common principle is the 50/30/20 rule proposed by Elizabeth Warren, which recommends allocating 50% of income for needs, 30% for wants, and 20% for savings and debt repayment.
    5. Monitor and adjust: Regularly review the budget and adjust as necessary. It’s important to be flexible and realistic with budgeting to make it a sustainable practice.

    Saving and Investing

    As per Bodie, Treussard, and Willen’s paper (2009), saving and investing are two critical components of personal finance that cater to different financial goals. Saving provides a financial cushion for unexpected expenses, while investing is the route to grow wealth over time and outpace inflation.

    Savings should be prioritized to create an emergency fund equivalent to 3-6 months of living expenses (Garman & Forgue, 2006). After setting up an emergency fund, savings should be directed towards short-term financial goals, such as buying a car or going on a vacation.

    Investing, on the other hand, is aimed at achieving long-term financial goals. Investing in stocks, bonds, real estate, or mutual funds can help generate higher returns over the long term, albeit with varying degrees of risk (Fama & French, 1992). Therefore, individuals must assess their risk tolerance and financial goals before investing.

    Controlling Spending

    Another effective way to save money is by controlling spending. Garman and Forgue (2006) assert that this process involves distinguishing between needs and wants, prioritizing spending, and resisting impulse buying. By controlling spending, individuals can increase the amount of money saved, thereby providing more funds for investments and other financial goals.

    Controlling spending can be achieved through various strategies, such as:

    1. Delay gratification: Resist the urge to make immediate purchases, especially for luxury or non-essential items. Practice waiting for 24-48 hours before making a significant purchase to ensure it is necessary and within budget (Ainslie, 1975).
    2. Use cash or debit cards: Studies show that people tend to spend less when using cash or debit cards compared to credit cards (Prelec & Simester, 2001). By using cash or a debit card, individuals can limit their spending to the money they already have.
    3. Shop with a list: A predetermined shopping list can help avoid unnecessary purchases and stay within the budget.
    4. Avoid lifestyle inflation: As income increases, it’s tempting to increase spending proportionally, a phenomenon known as lifestyle inflation. By avoiding this and maintaining a relatively consistent lifestyle, more money can be allocated to savings and investments (Kumra, 2017).

    Behavioral Finance and Money-Saving

    Behavioral finance studies the psychological factors affecting investment and financial decisions. In his book “Misbehaving: The Making of Behavioral Economics,” Richard Thaler (2015) presents key behavioral concepts that can significantly impact our saving behaviors:

    1. Mental Accounting: This refers to the tendency of people to categorize money into separate accounts based on subjective criteria, like the source of money and its intended use (Thaler, 1999). While it can lead to irrational financial decisions, mental accounting can also be leveraged to save money. For example, saving money in a separate ’emergency fund’ can help deter unnecessary spending.
    2. Loss Aversion: According to Tversky and Kahneman (1991), people tend to prefer avoiding losses to acquiring equivalent gains. By recognizing this tendency, individuals can manage their investments more prudently and resist panic-selling during market downturns.
    3. Endowment Effect: This is the phenomenon where people place a higher value on things merely because they own them (Kahneman et al., 1990). Understanding this bias can help individuals resist overspending on items they already own or don’t need.

    Conclusion

    Saving money is more than just a financial strategy; it’s a lifestyle choice. Effective personal finance management, which includes budgeting, saving, investing, and controlling spending, can lead to improved financial health and reduced stress. Understanding behavioral finance concepts can further enhance our money-saving behaviors. While the journey may seem challenging at first, persistence and discipline can make saving a habit and financial freedom an attainable goal.

     

     

    References

    • Ainslie, G. (1975). Specious reward: a behavioral theory of impulsiveness and impulse control. Psychological Bulletin, 82(4), 463.
    • Bodie, Z., Treussard, J., & Willen, P. (2009). The theory of life-cycle saving and investing. The Journal of Economic Perspectives, 23(1), 45-66.
    • Fama, E. F., & French, K. R. (1992). The Cross‐Section of Expected Stock Returns. the Journal of Finance, 47(2), 427-465.
    • Garman, E. T., & Forgue, R. E. (2006). Personal Finance. Houghton Mifflin.
    • Joo, S. (2008). Personal Financial Wellness. Handbook of Consumer Finance Research, 21-33.
    • Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990). Experimental Tests of the Endowment Effect and the Coase Theorem. Journal of Political Economy, 98(6), 1325-1348.
    • Kapoor, J. R., Dlabay, L. R., & Hughes, R. J. (2011). Personal finance. McGraw-Hill/Irwin.
    • Kumra, R. (2017). Understanding and Overcoming Lifestyle Inflation. Financial Planning Journal, 12(2), 43-50.
    • Prelec, D., & Simester, D. (2001). Always leave home without it: A further investigation of the credit-card effect on willingness to pay. Marketing Letters, 12(1), 5-12.
    • Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183-206.
    • Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. WW Norton & Company.
    • The Balance. (2021). How to Make a Budget in 6 Simple Steps. Retrieved from https://www.thebalance.com/how-to-make-a-budget-1289587
    • Tversky, A., & Kahneman, D. (1991). Loss Aversion in Riskless Choice: A Reference-Dependent Model. The Quarterly Journal of Economics, 106(4), 1039-1061.
    • Xiao, J. J., & Olson, G. I. (1993). Coordinating a Professional Financial Planning Service with a Personal Finance Class. Financial Counseling and Planning, 4, 127-145.

    Personal Finance 101: How To Manage Your Money And Reach Financial Stability

    Personal Finance 101: How To Manage Your Money And Reach Financial Stability

    Managing personal finances can be a daunting task for many people. With so many expenses to keep track of, it’s easy to lose sight of your long-term financial goals. However, with the right approach, anyone can achieve financial stability and build wealth over time. In this blog post, we’ll discuss the best way to save money and effective steps to reach a good and stable personal financial situation.

    1. Set Financial Goals

    The first step in achieving financial stability is to set clear financial goals. This involves creating a budget, determining your financial priorities, and setting achievable targets for savings and debt reduction. Setting goals gives you a sense of direction and helps you stay focused on your long-term objectives.

    To set effective financial goals, start by determining your current financial situation. Calculate your net worth by adding up your assets (such as savings, investments, and property) and subtracting your liabilities (such as debts and outstanding loans). This will give you a clear picture of where you stand financially and help you set realistic goals for the future.

    1. Create a Budget

    Once you’ve set your financial goals, the next step is to create a budget. A budget is a plan for how you will spend and save your money. It should include all of your income sources, as well as your expenses, such as housing, transportation, food, and entertainment.

    Creating a budget helps you identify areas where you can cut back on expenses and save money. It also ensures that you have enough money set aside to meet your financial goals. For example, if your goal is to save for a down payment on a house, you can adjust your budget to allocate more money towards savings and less towards discretionary spending.

    1. Reduce Debt

    One of the biggest obstacles to financial stability is debt. If you have high-interest credit card debt, student loans, or other outstanding loans, it’s essential to prioritize debt reduction as part of your financial plan. Start by paying off the debt with the highest interest rate first, as this will save you the most money in the long run.

    To reduce debt more quickly, consider consolidating your debts into a single loan with a lower interest rate. This can help you save money on interest and make it easier to manage your debt payments. Additionally, consider reaching out to your lenders to negotiate lower interest rates or to set up a payment plan that works for your budget.

    1. Save for Emergencies

    Another important aspect of financial stability is having an emergency fund. An emergency fund is a separate savings account that you can tap into in case of unexpected expenses, such as a medical emergency, car repair, or job loss.

    Experts recommend having at least three to six months’ worth of living expenses set aside in an emergency fund. This can provide a financial safety net and give you peace of mind knowing that you can handle unexpected expenses without going into debt.

    1. Invest for the Future

    Finally, to achieve long-term financial stability and build wealth, it’s important to invest for the future. Investing in stocks, mutual funds, real estate, or other assets can help you grow your money over time and achieve your financial goals faster.

    Investing requires some level of risk-taking, but with careful research and a diversified portfolio, it can be a lucrative long-term strategy. Consider working with a financial advisor to develop an investment plan that aligns with your financial goals and risk tolerance.

    Conclusion

    Achieving financial stability requires a combination of smart budgeting, debt reduction, emergency savings, and long-term investing. By setting clear financial goals and taking actionable steps to reach them, anyone can achieve financial security and build wealth over time. Remember, it’s never too late to start taking control of your finances and working towards a more stable financial future