Speaker 1: Welcome to how to Money. I'm Joel and I'm Matt,
Speaker 1: and today we're discussing how to escape living paycheck to paycheck.
Speaker 1: All right, Joel, I am excited to talk about living
Speaker 1: paycheck to paycheck. You know, we've gotten a lot of
Speaker 1: emails recently of folks writing in talking about how that's
Speaker 1: something they struggle with. And oftentimes the topics we cover
Speaker 1: start from the assumption that you do have a little
Speaker 1: bit of cash, you know, to start investing, to start
Speaker 1: putting towards those goals that you have set. And so today, yeah,
Speaker 1: I'm excited that we're gonna be able to step back
Speaker 1: a little bit more to talk through how to take
Speaker 1: those steps to get a little bit of financial margin
Speaker 1: in your life. Yeah, Matt, I know there are a
Speaker 1: lot of people living in a scenario where they're living
Speaker 1: paycheck to paycheck. It hurts my heart to hear about that,
Speaker 1: and I'm looking forward to hopefully providing some from those
Speaker 1: practical solutions. Real quick, though, I wanted to mention there
Speaker 1: was an article posted in our Facebook group by Heather
Speaker 1: and the article she posted was called is it an
Speaker 1: expensive bike or inexpensive Transportation? And I thought it was
Speaker 1: super helpful in kind of reframing the conversation around riding bikes.
Speaker 1: And we've talked about this before on the show, but
Speaker 1: that article in particularly was just a really good example
Speaker 1: of how cheap riding a bike can be, even an
Speaker 1: expensive bike, when you're comparing it to normal car transportation
Speaker 1: and how expensive that gets. Yeah, it's just a great
Speaker 1: example of how just thinking about something from a different
Speaker 1: perspective can completely change how you view the value of
Speaker 1: that thing. And you mentioned expensive bike, and it's true,
Speaker 1: the guy that wrote that article has like an eight
Speaker 1: thousand dollar bike, which is crazy expensive. That's crazy expensive,
Speaker 1: way more expensive than anything that we would even dream
Speaker 1: of owning. But again, when you put it in the
Speaker 1: context of transportation, and he had the numbers up for
Speaker 1: how much it would cost him to operate a basic
Speaker 1: Honda Civic and the fact is it's almost impossible to
Speaker 1: operate a vehicle like that as a small reasonable vehicle
Speaker 1: for less than six thousand dollars every year. And so
Speaker 1: you know, by no means are we advocating and saying, yeah,
Speaker 1: you should go out and buy an eight thousand dollar bike.
Speaker 1: There are lots of affordable alternatives to that where you
Speaker 1: can get an electric bike for much cheaper that would
Speaker 1: allow you to replace the vehicle. But just that sort
Speaker 1: of paradigm shift by thinking about the bike not as
Speaker 1: just a nice bike or even as an affordable bike,
Speaker 1: but viewing it as a replacement to transportation. We recently
Speaker 1: talked about secondary costs, and the secondary costs associated with
Speaker 1: owning a vehicle are huge. Yeah, there's an article that's
Speaker 1: on our site that I wrote about insurance and if
Speaker 1: you can even just reduce the amount of miles that
Speaker 1: you drive every year to less than most insurance companies
Speaker 1: will give you a pretty big discount for being a
Speaker 1: low mileage driver. Other insurance companies are starting to charge
Speaker 1: by the mile, which means if you drive very, very little,
Speaker 1: you could save a lot of money on your insurance costs.
Speaker 1: And so if you can step up your bike usage
Speaker 1: and lower how much you're driving, yeah, it can be
Speaker 1: an alternative form of transportation to you and then save
Speaker 1: you money on your car costs every month. And be
Speaker 1: sure to check out electric bike review dot com as
Speaker 1: well if you're looking at electric bikes. The guy that
Speaker 1: runs that site has got tons of reviews on there.
Speaker 1: And be sure to check out his top rated section
Speaker 1: where he reviews different styles of bikes, and that's where
Speaker 1: you'll be able to find, you know, like a roadbike
Speaker 1: versus a hybrid or a city commuter. And in most
Speaker 1: of those options, he has a nicer expensive option, but
Speaker 1: then a really affordable one. And dude, a lot of
Speaker 1: the ones that come in that are really affordable that
Speaker 1: he loves our rat bikes and that's what you own,
Speaker 1: the rat Wagon. Yeah. Rad has this awesome direct to
Speaker 1: consumer business model and they've made electric bikes so much
Speaker 1: less cost prohibitive. I've seen so many people riding RAD
Speaker 1: bikes more recently around town just because they've lowered the
Speaker 1: price and the barrier to entry into hopping on a bike.
Speaker 1: And so I'm just seeing people ride around town more
Speaker 1: frequently on bikes, and a lot of that is electric bikes,
Speaker 1: which is super cool. It's fun to see. Well. In
Speaker 1: quick shout out to to Heather because she works for
Speaker 1: the Atlanta Bicycle Coalition, which is an awesome Atlanta nonprofit
Speaker 1: and they promote bike safety, bike awareness, basically just trying
Speaker 1: to make biking in Atlanta better. Yeah. So, if you're
Speaker 1: into biking and you're wanting it to be safer in
Speaker 1: your city. Be sure to look up your organization and
Speaker 1: seriously consider supporting them most definitely, my friend. All right,
Speaker 1: let's mention the beer that we're gonna have on the
Speaker 1: show today. We're drinking Roast Beast by Modern Methods Brewing Company.
Speaker 1: And that's beast, not beef, right right, So it reminds
Speaker 1: me of Whoville. Uh, the who's carved the roast beast,
Speaker 1: that's what That's what this must be named after. Uh.
Speaker 1: And listener Krista was kind enough to send us this
Speaker 1: beer in crowlor form out of Cleveland, Ohio. And the
Speaker 1: coolest thing about this beer, Matt and Krista sent us
Speaker 1: some info on this is that this brewery is located
Speaker 1: in David Grohl Alley. So Dave Dave Girl, who's a
Speaker 1: famous musician, the frontman for the Foo Fighters, drummer for
Speaker 1: Nirvana as well. Yea originally yeah, so apparently this this
Speaker 1: brewery is located right in this alley that's named after
Speaker 1: world famous Dave Gross that's kind of cool. Yeah, And
Speaker 1: technically they call this a groller, not a crowler, so
Speaker 1: it's it's a groller. And did you ever listen to
Speaker 1: Food Fighters back in the day. Obviously, Nirvana is kind
Speaker 1: of a staple. But Food Fighters, man, you know, not really.
Speaker 1: I know they were super popular, but I wasn't cool enough.
Speaker 1: I don't think did. I was looking back over their
Speaker 1: discography and I forgot how much I love them. The
Speaker 1: Color in the Shape and I'm freaking rocked. It had
Speaker 1: so many great songs on there, Monkey Wrench, I know
Speaker 1: the song man, but I'm sorry, we just can't connect
Speaker 1: on this level right now. I'm not saying I dig
Speaker 1: them like today, but it definitely makes me want to
Speaker 1: go back and listen to some of that awesome, you know,
Speaker 1: late nineties rock. Well, I did like some late nineties rock.
Speaker 1: And even if we can't kind of bond over Food Fighters, well,
Speaker 1: we can bond over this beer. So thank you Christa,
Speaker 1: and we'll kind of let you guys know what we
Speaker 1: think about this speer at the end of the show.
Speaker 1: All right, Joel, onto the topic at hand. Today. We're
Speaker 1: talking about how to escape living paycheck to paycheck, and honestly,
Speaker 1: a large swath of Americans wouldn't be able to pay
Speaker 1: their bills if they missed a paycheck. And you know,
Speaker 1: we saw this evidence earlier this year with the government shutdown.
Speaker 1: How there are tons of government employees who are in
Speaker 1: that very situation, you know, when you're living paycheck to paycheck.
Speaker 1: The idea of even setting aside extra money every month
Speaker 1: is honestly laughable, Like, how are you supposed to set
Speaker 1: financial goals? How are they supposed to be attainable when
Speaker 1: every single dollar is going to go towards just staying afloat. Yeah, Matt,
Speaker 1: and I feel like, honestly, some of the advice that
Speaker 1: gets targeted towards people who are living paycheck to paycheck.
Speaker 1: First off, there are a lot of predatory companies that
Speaker 1: like to leach on the people that are the most
Speaker 1: vulnerable in our society, and we're gonna kind of talk
Speaker 1: about that more later in the episode. But so much
Speaker 1: of the advice that that is mentioned for people living
Speaker 1: paycheck to paycheck is is kind of cheap and not
Speaker 1: not very thorough. And so, based on some recent listener emails,
Speaker 1: we felt like this was a subject that we needed
Speaker 1: to tackle. We needed to tackle it well, because, like
Speaker 1: you said, this is a problem for a huge percentage
Speaker 1: of Americans, and we want the people living paycheck to
Speaker 1: paycheck to be able to find some of that margin
Speaker 1: so that some of our other episodes can be really helpful,
Speaker 1: so that they can start gaining ground when it to saving,
Speaker 1: when it comes to investing for the future, and just
Speaker 1: have the confidence that they're going to be able to
Speaker 1: meet financial challenges that arise, because it happens for all
Speaker 1: of us. Unexpected expenses pop up, whether it's a car
Speaker 1: breakdown or an HVAC system that goes kaplui, that happens,
Speaker 1: and so you and I'm at we were empathetic to
Speaker 1: the plight that many people in this country face. And
Speaker 1: so many people are in a position like this, often
Speaker 1: through through very little fault of their own. Sometimes it's
Speaker 1: a personal circumstance or a family member having an issue
Speaker 1: where you have to help out. It turns out six
Speaker 1: of bankruptcies happen because of unexpected medical bills, and often
Speaker 1: those medical bills arose out of an issue that kind
Speaker 1: of popped up out of nowhere. But I do think
Speaker 1: at the same time, there are some practical steps that
Speaker 1: we can lay out that can help people who are
Speaker 1: who do find themselves in that situation get a leg
Speaker 1: up and start making changes. And so that's what this
Speaker 1: episode is all about. And the thing is if this
Speaker 1: is your situation, right, this is the boat that you're in,
Speaker 1: keep in mind that this won't change overnight. Getting your
Speaker 1: finances in order is going to take time. It's going
Speaker 1: to take intentionality. And high earners aren't immune to living
Speaker 1: paycheck to pycheck either. Right, It's not just those that
Speaker 1: are living at the poverty line. You can have a
Speaker 1: huge income, but if your expenses are just as huge,
Speaker 1: you are by definition living paycheck to paycheck. Yeah, Matt,
Speaker 1: I feel like there are a lot of stories of
Speaker 1: people that make six figures are close to it, who
Speaker 1: are are living paycheck to paycheck. So you're right, it's
Speaker 1: not just people living below or near you know, the
Speaker 1: poverty line. It's a huge percentage of Americans across the
Speaker 1: income spectrum. Okay, So in order to get out of
Speaker 1: that cycle of living paycheck to paycheck, what needs to
Speaker 1: happen is that you need to create some financial margin.
Speaker 1: And what that means is there's just some room. There
Speaker 1: are literal dollars between what you make your income and
Speaker 1: the expenses that you have every month or every two weeks.
Speaker 1: And so the first steps in order to transition you
Speaker 1: away from living paycheck to paycheck are. The first thing
Speaker 1: that we're gonna cover is tracking your spending. Knowing where
Speaker 1: your money is going every month is going to be
Speaker 1: the very first step in knowing how to reroute towards savings. Joel,
Speaker 1: I know personally you love using Mint. Yeah, Matt, I
Speaker 1: love using Mint. I hook up all my accounts to it,
Speaker 1: and it helps me track my spending all in one place.
Speaker 1: I love going there in order to get quick overviews
Speaker 1: of my budget. But then also I literally have every
Speaker 1: single transaction spelled out, and I can see every single
Speaker 1: incoming and outgoing financial transaction at the same time, all
Speaker 1: in one place, and and that's what I love about Mint.
Speaker 1: So it's also free, which is really nice. You can
Speaker 1: download the app or go to the website. So at
Speaker 1: least for me, that's the best tool that I use
Speaker 1: to track my finances. It's nice to be able to
Speaker 1: kind of automate some aspects of your life, right, But
Speaker 1: at the same time, it's not necessary. Tracking your expenses
Speaker 1: isn't something that requires hard thinking or decision making, Like
Speaker 1: tracking your expenses is very different than budgeting. It's just
Speaker 1: looking at where your money is going and just keeping
Speaker 1: up with it a little bit. So as long as
Speaker 1: you just keep receipts, you can ease the track you're spending. Uh.
Speaker 1: If you don't have a smartphone, by chance, keep up
Speaker 1: with your receipts, list amount on paper. That is tracking
Speaker 1: your expenses. Yeah. And I think the reason that we
Speaker 1: say tracking your expenses is the first step towards building
Speaker 1: some financial margin in your life is because if you
Speaker 1: don't know where your money is going, it can kind
Speaker 1: of take on wings at at different times in your
Speaker 1: life and you might spend five bucks here, ten bucks there,
Speaker 1: and typically if you're not tracking your spending, you just
Speaker 1: forget about those purchases. You don't remember that they even happened.
Speaker 1: And you want to be able to look the cold,
Speaker 1: hard dead facts right in the face. And that's why
Speaker 1: tracking your spending is the first step that you have
Speaker 1: to take if you want to kind of end that
Speaker 1: vicious cycle of living paycheck to paycheck. Yeah, and just
Speaker 1: as you start making progress, it's good to see where
Speaker 1: you've been, because it's fun to track your progress as
Speaker 1: you improve, which leads us to our next step, which
Speaker 1: is setting goals. And so ask yourself, what is it
Speaker 1: that you want aspiring towards specific goals can be incredibly helpful.
Speaker 1: Knowing your why behind money will help you to get
Speaker 1: through those tough times of austerity. Which is a funny
Speaker 1: word to use because, like typically austerity is like a
Speaker 1: political or economic term where a government will either cut
Speaker 1: spending or raise taxes, And when it comes to you,
Speaker 1: like on a personal level, those are the exact same
Speaker 1: things essentially that you have to do. You have to
Speaker 1: either increase your income or most likely cut expenses. Those
Speaker 1: are your two largest levels that you can pull in
Speaker 1: order to make change in your personal finances. Yeah, Matt,
Speaker 1: and our whole show is kind of based around living
Speaker 1: or rich life. Now, we're big fans of people prioritizing
Speaker 1: saving and investing, but at the same time not depriving
Speaker 1: themselves of things that are meaningful. But I gotta say,
Speaker 1: if you are in the position of living paycheck to paycheck,
Speaker 1: the idea of austerity is an important one to consider
Speaker 1: for the time being. You might need to make some
Speaker 1: short term sacrifices so that you can achieve the goals
Speaker 1: of achieving margin in your life. I'll tell you what, Matt.
Speaker 1: From everyone that I've heard that's gotten out of the
Speaker 1: cycle of living paycheck to paycheck, They actually have an
Speaker 1: emergency fund, they have the financial means when they encounter
Speaker 1: an unexpected expense. The sort of mental freedom that they
Speaker 1: gain because of that is so much greater than the
Speaker 1: pain of the austerity that they had to endure. I
Speaker 1: think that's important to note and knowing that that is
Speaker 1: your goal, that's your light at the end of the tunnel.
Speaker 1: That's sort of freedom to meet those unexpected situations that
Speaker 1: come up. That is going to help you to actually
Speaker 1: get through those times where you're cutting back ruthlessly. That's right. Gel. So,
Speaker 1: like we said, cutting expenses, uh and earning more like
Speaker 1: those are the main levers that are going to allow
Speaker 1: you to get out of that cycle of living paycheck
Speaker 1: to paycheck, and we're going to dive into the specifics
Speaker 1: on how you can do that. Right after the break,
Speaker 1: our buddy, we're back and let's talk about cutting expenses.
Speaker 1: We already kind of mentioned tracking your spending and how
Speaker 1: that's the first thing you need to do. It's hard
Speaker 1: to know what to cut unless you have been tracking
Speaker 1: and you actually know where the money is going. And
Speaker 1: then the idea is to ruthlessly unnecessary expenses. We had
Speaker 1: an episode earlier episode thirteen on cutting your monthly bills,
Speaker 1: and that's particularly powerful when we're talking about recurring expenses.
Speaker 1: We also did an episode about monthly cell phone bills.
Speaker 1: Matt I just talked to a friend that took action
Speaker 1: on that and he signed up for Sprints one year
Speaker 1: free service plan. Oh is that that deal? Like if
Speaker 1: you transferred over specifically from Verizon, right, yeah, but and
Speaker 1: it's from other cell phone providers as well, you can
Speaker 1: get the deal. So so it's worth noting that there
Speaker 1: are major savings to be had if you will only
Speaker 1: take the steps and cutting your monthly bills. The recurring
Speaker 1: bills that show up every single month are going to
Speaker 1: be huge in upping that margin in your life. Let's
Speaker 1: first now talk about some big steps that you can take,
Speaker 1: drastic steps. It is more effective to focus on these
Speaker 1: bigger winds when it comes to cutting your expenses sometimes
Speaker 1: than focusing on just like all the tiny little things
Speaker 1: that you think might make a difference, right like the
Speaker 1: latte every day. You hear that mentioned all the time.
Speaker 1: If you can tackle the biggest expenses in your life,
Speaker 1: you're gonna be able to take much bigger steps towards
Speaker 1: creating margin in your life. You know, if your leases up,
Speaker 1: consider moving into a smaller and cheaper place, or maybe
Speaker 1: even consider moving in with family. If you have a
Speaker 1: car payment that's killing you, consider selling that car. Go
Speaker 1: ahead and take that loss. You know, drive a beater instead.
Speaker 1: We're focusing on these bigger things because housing, transportation, and
Speaker 1: food for the average American takes up seventy of your budget.
Speaker 1: So if you can focus on those three things, you know,
Speaker 1: like we already covered housing, we did transportation, food, you know,
Speaker 1: stop eating out like that is the most expensive way
Speaker 1: to feed yourself is if you go out to a
Speaker 1: restaurant every day, but focus on the bulk of where
Speaker 1: you're spending your money first in order to see the
Speaker 1: largest gains. Yeah, Matt, those are huge. Often times for
Speaker 1: people those feel like fixed immovable costs, but they're not.
Speaker 1: And especially if you're living paycheck to paycheck and you
Speaker 1: want to change that cycle, that are often ways that
Speaker 1: you can change the makeup of those bigger monthly bills
Speaker 1: in your life. At minimum, it's something that you should
Speaker 1: start thinking about and creating an action plan for. Maybe
Speaker 1: taking on a roommate is an ideal, but you know what,
Speaker 1: maybe that's the step you have to take for the
Speaker 1: time being. Yeah, for a short period of time. You're
Speaker 1: not saying that you have to always do this, but
Speaker 1: if if you know that, like man, if I do
Speaker 1: this for six months or a year, like, think about
Speaker 1: the kind of margin like that that would give you. Yeah. Completely,
Speaker 1: And Matt, you did kind of mention getting a latte
Speaker 1: every day, and that is something that I feel like
Speaker 1: a lot of financial experts quote unquote say stop drinking
Speaker 1: the latte and you'll be able to save this and
Speaker 1: such more for a retirement. And I understand where they're
Speaker 1: coming from. I feel like for a lot of people
Speaker 1: that's not necessarily helpful. But if you are living paycheck
Speaker 1: to paycheck, a lot of people living in that vicious cycle,
Speaker 1: they feel like when they do something positive, they owe
Speaker 1: themselves kind of like a little reward, and those rewards
Speaker 1: can be costly over time, whether it is a latte
Speaker 1: or eating out. We mentioned the word austerity earlier. I
Speaker 1: think it is important if you are living a life
Speaker 1: that is paycheck to paycheck, you have to forego some
Speaker 1: of those even sort of rewards for the time being
Speaker 1: because they can kind of mess you up on your
Speaker 1: way towards gaining that bit of margin in your life,
Speaker 1: which is so important. Yeah, sometimes it's key just to
Speaker 1: kind of go cold turkey, Like it requires you to
Speaker 1: completely jar yourself off the normal patterns and the habits
Speaker 1: that you have in order to completely reframe the way
Speaker 1: that you are thinking about your expenses. It's like a
Speaker 1: prize fighter doing some training, right. Oh, I know all
Speaker 1: about that, do you? Okay, Yeah, of course you do. No,
Speaker 1: don't really, but they're not eating donuts ever, Like one
Speaker 1: donut throws them off their game if they've got a
Speaker 1: fight coming up in two weeks. And so the same way,
Speaker 1: you need to kind of take on the focus of
Speaker 1: a prize fighter where those things are completely anathema to
Speaker 1: what you're trying to achieve. And Joel, like you mentioned,
Speaker 1: those small things do add up, and so now is
Speaker 1: the time to kind of feel like that last of
Speaker 1: your expenses. Uh, there are ways to just reduce those expenses,
Speaker 1: like with your insurance shop it around, if you're making
Speaker 1: purchases that are non necessity items. We've talked about this recently,
Speaker 1: but consider putting a period of time where you're gonna
Speaker 1: make yourself weight, Like consider waiting thirty days if you
Speaker 1: know that you are prone to making purchases on a
Speaker 1: whim and receiving it in two days or less. Cut
Speaker 1: that Amazon Prime membership if you know that that's causing
Speaker 1: you to stumble again. The whole idea is to kind
Speaker 1: of jar your habits and to kind of get you
Speaker 1: off that path that got you to where you didn't
Speaker 1: have any financial margin in your life to begin with.
Speaker 1: Another major step you need to take is to keep
Speaker 1: tracking those expenses. And it sounds weird, right We just
Speaker 1: talked about tracking expenses, but being able to note your
Speaker 1: progress is helpful, and the only way that you can
Speaker 1: do that is by continued tracking. And so even if
Speaker 1: you kind of came up with a list of what
Speaker 1: you've been spending in order to kind of get get
Speaker 1: a handle on your situation, continued tracking helps provide you
Speaker 1: the encouragement to see that changes are being made. It
Speaker 1: makes things tangible. And another way to kind of help
Speaker 1: make that tangible is by creating charts and graphs that
Speaker 1: helped track that progress. And so Katie and our Facebook
Speaker 1: group posted a picture of a bar graph that she'd
Speaker 1: kind of created to track her own progress on paying
Speaker 1: off debts and saving up an emergency fund and I thought, man,
Speaker 1: that is so helpful. It's his visual that she gets
Speaker 1: to look at every day and at the same time
Speaker 1: kind of physically color in those bars to track her progress.
Speaker 1: What a cool way to make your progress tangible. It's
Speaker 1: so much better than just looking at numbers on a screen. Yeah,
Speaker 1: like you said, she's doing it by hand. This isn't
Speaker 1: you know, some fancy graph or chart like that you're
Speaker 1: gonna do on your computer, but just written out on
Speaker 1: a piece of paper. Like it does not have to
Speaker 1: be complicated or fancy at all in order to feel
Speaker 1: the results of what you're accomplishing. And that's the reward, right.
Speaker 1: I feel like people are tempted to spend money in
Speaker 1: little ways here and there to reward themselves. The real
Speaker 1: reward is that tangible feeling that you get by tracking
Speaker 1: your progress. And another step in going down the path
Speaker 1: of cutting your expenses joal is to make sure you
Speaker 1: engage your support system, and by that I mean friends.
Speaker 1: You and I we love talking about money. We've done
Speaker 1: an episode on why you need to talk about money
Speaker 1: with your friends and family. But the fact is it
Speaker 1: is it's not easy. It can be really hard. To
Speaker 1: be vulnerable when it comes to your finances, when it
Speaker 1: comes to talking about scaling back your expenses, but it
Speaker 1: is so incredibly important to get your friends on board
Speaker 1: when you have that support system around you, and to
Speaker 1: know also that you have friends that are working towards
Speaker 1: similar goals that you are. You know, we've also mentioned
Speaker 1: this in that same episode where we talked about talking
Speaker 1: about money with your friends and family, but creating a
Speaker 1: friend group or a tribe who in essence are keeping
Speaker 1: you accountable and who also want to see you succeed. Yeah,
Speaker 1: and if you need online encouragement, join our how to
Speaker 1: Money Facebook group. Really, the idea of cutting back spending less,
Speaker 1: it's a it's a really simple idea, and so that's
Speaker 1: why we tried to kind of go through some of
Speaker 1: the nuances of it. So oftentimes, when people struggling who
Speaker 1: are living paycheck to paycheck are told just to spend less,
Speaker 1: it feels like a very simplistic solution, and so that's why,
Speaker 1: you know, Matt and I tried to go through kind
Speaker 1: of some of the specifics here. The idea of spending
Speaker 1: less is simple, but it's not always easy in reality,
Speaker 1: and so taking some of the steps that we mentioned
Speaker 1: can create some better habits in your life, leading to change,
Speaker 1: and it can also help take some of the emotion
Speaker 1: out of those decisions that cause you to spend money
Speaker 1: on a whim. Yeah, Joe, and I like that you
Speaker 1: mentioned emotions, you know, and habits, right, because when you're
Speaker 1: used to doing something, just being told the knowledge and
Speaker 1: how to do something doesn't make it easy. Even though
Speaker 1: the ideas are simple, it does not make it easy
Speaker 1: because you're used to doing something like emotionally, it's really
Speaker 1: hard to do and it's really difficult to break habits
Speaker 1: that are long standing. So now that we've talked about
Speaker 1: expenses that we can cut, let's talk now about different
Speaker 1: ways that you can earn more money. Yeah, Matt, So,
Speaker 1: if you are gainfully employed, earning more money where you
Speaker 1: already work is going to be the most effective way
Speaker 1: to increase your income. Sometimes it just means asking for
Speaker 1: a raise if you've been there for a while, if
Speaker 1: you've been a good employee. Other Times it means asking
Speaker 1: for and taking non more responsibility, maybe a managerial role,
Speaker 1: maybe working a different shift, but anything you can do
Speaker 1: to prove your worth to your current employer and to
Speaker 1: seek increased pay where you currently are, that's gonna be
Speaker 1: your quickest route to earning more. However, if you can't
Speaker 1: earn more money in your current job, look to side hustles.
Speaker 1: In episode thirt or four, we talked about just great
Speaker 1: side hustles that you can scale and turn into legit businesses.
Speaker 1: But right now, when you're in this position of living
Speaker 1: paycheck to paycheck, even a side gig can help you
Speaker 1: to overcome that cycle, and you want to take all
Speaker 1: that money and bank it. Yeah, man, I feel like
Speaker 1: a side gig, as opposed to a side hustle, can
Speaker 1: actually be more beneficial for someone living paycheck to paycheck,
Speaker 1: And we kind of clarified this in that episode, right,
Speaker 1: But sometimes you just need more income in your life
Speaker 1: right now, and that's the case if you're living paycheck
Speaker 1: to paycheck. But the key is if you do take
Speaker 1: on a side gig and make some more money to
Speaker 1: begin to fund your emergency fund, to begin to bank
Speaker 1: that money. The easier thing is to let that money
Speaker 1: come into your account and let it flow right back out,
Speaker 1: but that's not going to help you get out of
Speaker 1: the vicious cycle of living paycheck to paycheck. Yeah, Joel
Speaker 1: and some examples of this is you can take online
Speaker 1: surveys which are pretty quick and painless. Donating plasma a
Speaker 1: little less quick, a little less painless. We joked about
Speaker 1: doing this on a previous episode. You've done this before. Yeah,
Speaker 1: I donated plasma in college. Yeah, and it pays pretty well. Yeah.
Speaker 1: I think I made about seventy or eighty bucks a
Speaker 1: week when I would do it twice in a week.
Speaker 1: We had a listener reach out. I forget exactly how
Speaker 1: much they were making in a year, but somewhere near
Speaker 1: like thirty dollars a year to donate plasma. Basically it
Speaker 1: was covering their annual vacations that that he was taking
Speaker 1: with his family, which is totally admirable. But then other
Speaker 1: options you can lift. You can uber selling extra stuff
Speaker 1: on eBay. Again, these are things that you're doing right
Speaker 1: now just to stop the bleeding. You're trying to find
Speaker 1: ways to give yourself a little bit of margins so
Speaker 1: that you can essentially resume your normal life and find
Speaker 1: ways to maintain some financial standing that is more sustainable
Speaker 1: in something that you can do more on a regular basis, Like,
Speaker 1: these aren't things that most folks will be able to
Speaker 1: continue to do long term. But again that's okay. Just
Speaker 1: like with Joel mentioned as far as like having a roommate,
Speaker 1: you probably don't want to have a roommate for the
Speaker 1: rest of your life. It's not sustainable necessarily. Maybe it
Speaker 1: is for you, but for the time being having a roommate,
Speaker 1: you know what, that's a great way to reduce expenses.
Speaker 1: Having these side gigs that are bringing in extra money
Speaker 1: is an awesome way to get an income boost. So
Speaker 1: we've talked a bunch about practical stuff, Matt, but you
Speaker 1: know what, so much of money is psychological, and it's
Speaker 1: no different if you're living paycheck to paycheck. It's really
Speaker 1: helpful to find little tricks that can motivate you psychologically.
Speaker 1: And so some people have found that having two separate accounts.
Speaker 1: Let's say you have direct deposit through your employer, depositing
Speaker 1: most of it into one account that you spend money
Speaker 1: out of, and the other one into an account that
Speaker 1: is used just for savings. I know our friend Grant,
Speaker 1: when he was first starting to get his money act together,
Speaker 1: he took this route, and you know what he did.
Speaker 1: He actually asked a trusted friend to change the password
Speaker 1: of his savings account so that he couldn't get into
Speaker 1: it no matter what if you wanted to, he couldn't.
Speaker 1: And I thought that was kind of an interesting tactic. Obviously,
Speaker 1: make sure you give that to an incredibly trusted friend,
Speaker 1: exactly right. Yeah, but I love that idea of setting
Speaker 1: up kind of a separate account. It's like a forced
Speaker 1: method of savings where you don't even see it, you
Speaker 1: don't even think about it. If not even seeing a
Speaker 1: portion of your paycheck is what it takes to kind
Speaker 1: of get the ball rolling. Do that, and it all
Speaker 1: comes down to you as an individual, like and then
Speaker 1: there's acorns. A lot of people love that it automatically
Speaker 1: rounds up and pushes that portion towards a savings account.
Speaker 1: If you think that would work for you when it
Speaker 1: comes to saving, that that would resonate with you, Like
Speaker 1: give that a shot. And on the other end of
Speaker 1: the spectrum, when it comes to expenses, if you know
Speaker 1: that you're a spender, try switching over to cash, you know,
Speaker 1: like going from apps on one end to to cash
Speaker 1: on the other end. Like having something tangible, like we
Speaker 1: said earlier, when it comes to graphs, like you really
Speaker 1: feel it. And so when you're spending money and you're
Speaker 1: actually handing over those cash bills the green stuff. Yeah,
Speaker 1: like you can really feel that and you don't want
Speaker 1: to part with that. So if you're gonna go out
Speaker 1: for a beer with some friends, like paying in cash,
Speaker 1: that might very well be a way that can keep
Speaker 1: you at only having a beer versus buying several beers.
Speaker 1: So just know yourself, no, you're spending patterns in your habits,
Speaker 1: and try to use the different tactics and tools that
Speaker 1: would work for you. Good stuff, Matt, And it turns
Speaker 1: out there are a lot of free resources to help
Speaker 1: people that are in cashtrap situations. Let's talk about those
Speaker 1: right after the break alright, So we are talking about
Speaker 1: escaping living paycheck to paycheck. You know, the goal is
Speaker 1: to end that cycle, and even saving up one thousand
Speaker 1: dollars and paying off high interest debt will allow you
Speaker 1: to stop the paycheck to paycheck lifestyle. You want to
Speaker 1: have some financial margin in your life. Uh, you can
Speaker 1: even call it an emergency fund, it doesn't really matter.
Speaker 1: But again, like the goal is to just end that cycle.
Speaker 1: And we just covered some of those direct steps that
Speaker 1: you can take in order to cut your expenses. Or
Speaker 1: to find ways to earn some more money. But Matt,
Speaker 1: there are some massive pitfalls that people living paycheck to
Speaker 1: paycheck often stumble into. There are a lot of nefarious
Speaker 1: businesses that claim to offer help, but they're actually hurting.
Speaker 1: I'm specifically talking about companies that offer title loans and
Speaker 1: payday loans. And it sounds like a solution to someone
Speaker 1: who is living paycheck to paycheck, that getting that quick
Speaker 1: money is going to be the solution to their problems.
Speaker 1: But ultimately, the way that these predatory loans work they
Speaker 1: charge interest rates of often close to three repayment terms
Speaker 1: are often incredibly quick, and if you are unable to
Speaker 1: pay that money back in short order, you're rolled into
Speaker 1: another loan and you owe even more money. And so
Speaker 1: anyone that's living paycheck to paycheck out there listening to
Speaker 1: this episode, I just plead with you to completely avoid
Speaker 1: those guys. There are a lot of bad situations to
Speaker 1: be found in, but there's not much worse than being
Speaker 1: subject to the terms of a payday loan Eduel, And
Speaker 1: you know there's alternatives as well, earning like earning without
Speaker 1: the g just earning. They allow you to get your
Speaker 1: paycheck early without fees and without interests as well. And
Speaker 1: so you know, that's a decent stop gap, right, Like,
Speaker 1: if you're in a position where you need that cash,
Speaker 1: it's certainly better than the alternatives of going to a
Speaker 1: payday lender or getting a title loan. However, know that
Speaker 1: this isn't a long term solution, right, It's not sustainable. However,
Speaker 1: if you are in a situation like this, though, yeah,
Speaker 1: it can be a decent stop gap. Yeah, normally, Matt,
Speaker 1: I don't think you and I would say, access your
Speaker 1: paycheck early, take your funds now, and spend away. But
Speaker 1: if you are in a position where you're living paycheck
Speaker 1: to paycheck, so many people they take out a payday
Speaker 1: loan or a tidle loan, and they find their financial
Speaker 1: situation to be much much worse on the back end.
Speaker 1: And so a company like Earning providing free access to
Speaker 1: your pay today as opposed to going to a paida
Speaker 1: lender and getting charged in outrageous interest rate, Man, that's
Speaker 1: just so much better. And let's talk about, Matt, some
Speaker 1: of the other free resources that people have access to,
Speaker 1: and also once to kind of clear up some some
Speaker 1: of the stigmas that surround some of these, in particular
Speaker 1: government resources that people have. I think there can often
Speaker 1: be shame surrounding taking those, but the ones we're gonna
Speaker 1: cover here are completely open to you to use for
Speaker 1: your benefit and and don't feel any shame in that.
Speaker 1: The great thing is someday, once you have that margin
Speaker 1: in your life, once your finances are back on solid footing,
Speaker 1: you can pay it forward in other ways to other people.
Speaker 1: So if you're in a tough spot, consider some of
Speaker 1: these free resources you want to get started. Yeah, I mean,
Speaker 1: let's talk about student loans and so in particular, if
Speaker 1: you have a federal student loan, get into an income
Speaker 1: based repayment plan or apply for forbearance. So if you're
Speaker 1: living paycheck to paycheck, if you're underwater when it comes
Speaker 1: to your finances, these different plans and terms will allow
Speaker 1: you to get, you know, get a little more breathing
Speaker 1: room when it comes to your finances. So, if you're
Speaker 1: student loan payment is weighing you down and you feel
Speaker 1: like you're barely above water, looked to an income based
Speaker 1: for payment plan. And if it's other kinds of debt
Speaker 1: that make you feel like you can barely keep your
Speaker 1: head above water, you're just treading water right now. Well,
Speaker 1: another free resource that you should take advantage of is
Speaker 1: to visit a local chapter of the n f c C.
Speaker 1: The NFCC is the National Foundation for Credit Counseling. They
Speaker 1: have local chapters all over the country, and the great
Speaker 1: thing about the n f c C is that they
Speaker 1: are one of the few above board places that you
Speaker 1: can turn to get free debt counseling. Counselors of the
Speaker 1: NFCC can also help you create a debt management plan.
Speaker 1: There are a lot of people out there who will
Speaker 1: promise that they can work with the with your lenders,
Speaker 1: with the people that you owe money to in order
Speaker 1: to negotiate you lower interest rates or even partial forgiveness
Speaker 1: of your debt. Most of those people are lying. But
Speaker 1: the NFCC, well that's legit. They offer real help. And
Speaker 1: so if you suffer from overwhelming debt, visiting your local
Speaker 1: NFCC affiliate. That's one of the free resources that you
Speaker 1: need to hit up right away. Yeah, man, And you know,
Speaker 1: if you are just in a really tough position, look
Speaker 1: to your local community and just different nonprofits. There are
Speaker 1: temporary shelters and food banks for those who have immediate needs.
Speaker 1: Look to Salvation Army and check out United Ways two
Speaker 1: and one like that is just an incredible resource that's
Speaker 1: just set up across the country that can provide you
Speaker 1: with different resources, whether it be counseling or shelter or jobs.
Speaker 1: There are all sorts of programs that you can look
Speaker 1: into that might be provided in your local city. And
Speaker 1: you know what state and federal government resources are available
Speaker 1: for you in really difficult times as well. You can
Speaker 1: apply for SNAP benefits, which are also known as food stamps, Medicaid,
Speaker 1: subsidized housing, low income home energy assistance. If you're having
Speaker 1: trouble paying the heating and cooling bills for your home,
Speaker 1: there are lots of low income home energy assistance programs.
Speaker 1: There's also a welfare s s I you know, we
Speaker 1: have matt and Georgia. We have something called peach Care
Speaker 1: and I've heard of it. Yeah, yeah, we have a
Speaker 1: friend whose kids are on there. If you are under
Speaker 1: a certain income threshold, your state might offer free healthcare
Speaker 1: for your kids. So if you're worried about doctors bills
Speaker 1: piling up based on having to take your kids to
Speaker 1: the doctor, look into applying for state provided health benefits
Speaker 1: will put links to all of these resources in the
Speaker 1: show notes. Just remember, if you're living paycheck to paycheck, hopefully,
Speaker 1: hopping on one of these programs is just a temporary
Speaker 1: boon to your finances so that you can get things
Speaker 1: under control and eventually you're back on your own two
Speaker 1: feet financially speaking. All right, Joe, let's go ahead and
Speaker 1: take it back now to the beer. We want to
Speaker 1: thank Krista in Ohio for donating most Beast by Modern
Speaker 1: Methods to the show today. And this is an oatmeal stout,
Speaker 1: And because I know that, I feel like it does
Speaker 1: taste like Founders Breakfast stout. It's got that same sort
Speaker 1: of roasty ode flavors going on, maybe a little bit
Speaker 1: lighter in body. I feel like it switches around in
Speaker 1: my mouth a little bit, just a little bit lighter
Speaker 1: than a normal oatmeal stout. Yeah, I feel like this
Speaker 1: reminds me of a dry Irish stout, which is a
Speaker 1: specific style, but it's got oats in it, which totally
Speaker 1: kind of combines those flavors of an American stout and
Speaker 1: Irish sed out Guinness, isn't that technically a dry Irish doubt?
Speaker 1: It is? Yeah, Yeah, it's probably the most well known. Right,
Speaker 1: this was definitely on another playing field than Guinness. Though
Speaker 1: this was a really good beer. I felt like an
Speaker 1: interesting style. I love the name because who doesn't love
Speaker 1: the grinch Man? Right that Yeah, so carved that roast beast.
Speaker 1: We just had some roast beast tonight. Thank you to
Speaker 1: Christoph for sending this beer over. Yeah, as we finalize Winner,
Speaker 1: basically like we're kind of moving into spring, it's a
Speaker 1: nice beer to kind of be done with all that. Yeah,
Speaker 1: nail in the cough and take that Winner, all right, Matt,
Speaker 1: Let's get to our final thoughts on the topic of
Speaker 1: escaping living paycheck to paycheck. There are a lot of
Speaker 1: Americans living paycheck to paycheck. It's tough out there, but
Speaker 1: you know what, you can overcome that cycle of living
Speaker 1: paycheck to paycheck by making some of the changes that
Speaker 1: we talked about in this episode. I think tracking your
Speaker 1: expenses and then cutting unnecessary expenses is huge. It can't
Speaker 1: be overstated how effective that can be on the bigger
Speaker 1: level of housing in cars, and on that smaller level
Speaker 1: of eating out and buying those little rewards. Any expenditures
Speaker 1: that you can cut out of your life get you
Speaker 1: started on the right track and creating financial margin like
Speaker 1: that is the only way to get out of that
Speaker 1: cycle of living paycheck to paycheck. So you talked about
Speaker 1: expenses and now earning more money like that is the
Speaker 1: only other way to widen that gap. And so look
Speaker 1: for ways that you can increase your your regular income
Speaker 1: by taking on additional responsibilities and asking for a raise
Speaker 1: at work. But at the same time, don't be afraid
Speaker 1: to take on a side gig for the time being
Speaker 1: in order to earn some extra money that you can
Speaker 1: dedicate to these immediate financial goals. Yeah, and don't be
Speaker 1: ashamed or afraid to take advantage of the free resources
Speaker 1: at your disposal. Whether it's student loans or other kinds
Speaker 1: of debt that have you barely able to breathe financially,
Speaker 1: there are free resources at your disposal. Yeah, it certainly
Speaker 1: doesn't hurt to see if you qualify, So check those out, So, Joel,
Speaker 1: I think that's gonna be it. Man. Thanks everyone for
Speaker 1: listening to this episode. All those links that we just
Speaker 1: mentioned will have those up in our show notes at
Speaker 1: how some money dot com. Be sure to check those out. Yeah,
Speaker 1: and if you're digging this podcast, you found it helpful.
Speaker 1: We'd appreciate your five star review on Apple Podcasts, and
Speaker 1: don't forget to hit the subscribe button while you're there.
Speaker 1: And if you think we've got room for improvement, drop
Speaker 1: us a line at how to money dot com slash
Speaker 1: do better, all right, Joel, So, until next time, best
Speaker 1: friends Out, Best Friends Out,