Financial Advice by Carmen Rita Wong
Q: I am very eager to have all of my bills paid off, but no matter how I work the numbers, it seems like ALL of my money is going to my bills and I’m left just scraping by, especially on those last few days before my next paycheck. Is there a trick to paying down my debt and putting some money away in the bank, all while still being able to enjoy having a life?
You may remember in grade school that there were some ‘tricks’ to remember multiplication tables, etc., but, unfortunately, the answers to the problems don’t change: a number times zero is always zero. Our household budgets are very much plain old addition and subtraction. So, when your expenses and income are as tight as the lid on a pickle jar, it’s time to change one, the other, or both.
I don’t know exactly what your numbers are, but here are some universal tips to help loosen things up no matter how many zeros in your salary, or debt:
- Make more money. We women are a bunch of hard workers and jugglers. But is there room–even a couple of hours a week–to make some extra dollars doing things you enjoy? If you have a hobby, such as design, set up shop at Etsy. Can you be flexible on weekends and earn money running errands (see TaskRabbit) or dog walking (Care.com)? Think about what your skills are and availability is beyond your regular job. You may be able to make that paycheck breath a bit with extra income.
- Find more money. Consider this a bigger version of the change-under-the-cushions. As I’m a big fan of enjoying life so I don’t like the idea of cutting back so much that you jeopardize your sanity. But, you do have to consider where you can cut back. For example, with so much access to subscription services for television shows and movies (such as Netflix, Hulu, Amazon Fire, etc.) there is little need for cable. You can go from paying $100 a month for your favorite shows to around $20 a month depending on what package you go with. And what about your grocery bill, or going out, or clothes shopping? Pick your priorities when it comes to enjoying life and then focus on all the other stuff to find your savings. Write them down and create deadlines–two hours over a weekend doing research and making some calls can make a big difference.
- Make a big change. When you spend year after year stressing about your money and feeling too squeezed to breathe, it may be time to think about a big change. For the majority of Americans, our homes are our most expensive expense, taking up 30%-60% of our budgets. I’m not recommending moving tomorrow, but, think about your future–what do you see? Where would you like to be, mentally as well as financially? Is where you are worthwhile? For some folks, it takes a year or two to make a big change, but the extra 10 or 20% of income saved makes it all worthwhile. And if you have no dependents and work in a field with solid employment, it could be an even easier move. Should-you-move is a big question for you to answer, but, it’s always worth posing the question.
We may not be like Houdini and be able to slide out of our budget-shackles, but we have a lot more of an ability to make changes in our lives than we realize. Abracadabra!
Carmen Rita Wong is the President and Founder of Malecon Productions. She is the former co-creator and host of the only national, daily personal finance television show, On the Money, on CNBC. Carmen was also the co-founder and former President of an all-female financial planning firm, is currently Assistant Industry Professor of Finance and Risk Engineering at NYU Polytech, a former editor at ‘MONEY’ magazine as well as a previous national advice columnist at ‘Good Housekeeping’, ‘Glamour’, ‘Latina’, ‘Essence’, and ‘Men’s Health’. Carmen also writes for ‘The New York Times’ and is the author of two books, her most recent, The Real Cost of Living. She has also written a novel based on her life and the lives of her first- and second-generation Latina friends, famous and not, to be released in 2015.