5 Steps to Saving $1,000

By now, you have probably seen the survey results that recently came out–62% of Americans have less than $1,000 in savings. This is a scary statistic. What it means is that 62% of Americans are in a world of hurt whenever something, even something small, goes wrong. It also means that you don’t have the opportunity to get what you want when you want it without having to go into debt to get it.

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Why Should I Have Savings?

Savings are a crucial part of financial independence. You have to be ready for whatever life throws at you. An unexpected bill could throw your family into turmoil if you haven’t built up a savings cushion.

How many times have you gone to the mechanic for one thing, and when you return to pick up your car, the mechanic gives you a long list of other things that are wrong with your car, things that if you don’t fix right that second, your car will probably explode? If you’re like me, you usually don’t listen, but at some point, you’re going to have to fix something on your car. You’re probably not going to be planning on your car breaking down. It is much better to be able to pay for it from your savings than to have to get a loan, use a credit card, or otherwise borrow money for a car repair.

What happens if you have a couple of unexpected bills and now you’re not sure how you are going to buy groceries for the week? It’s much better to be able to meet life’s challenges as they come up without having to constantly worry about where the money to cover the challenges is going to come from.

On a more exciting note, what happens when the thing that you’ve been saving months for finally goes on sale and because you’ve been saving, you have enough money to buy it without going into debt or using a credit card? That’s what saving is all about. It’s being able to take care of yourself and your family.

Step 1: Know Your Income 

While it sounds simple, if you do not know how much you’re bringing in, you can never know your spending limit  or how to achieve your saving goals. It’s not enough to have a rough idea of how much you bring in. If you have a rough idea of how much you make, it will be easy to fudge your numbers and overspend. You should know exactly how much you are making each month.

This is easier if you are a salaried employee. Take a look at your last couple of paychecks. This should help you know exactly how much you make over the course of a month. Look at the amount that you are actually taking home each month, not the full amount you earn. At this point, you probably don’t have the ability to change how much you pay in taxes on a monthly basis. Keep that in mind, though. It may be something you can affect when tax season rolls around.

If you don’t have a consistent income, calculating, and planning for, how much you make each month can be difficult. The problem here is that you don’t know if you’re going to be making $1,500 or $4,500. If this is you, look back over the last year of income. Write down the total income. If you’ve been working for yourself or collecting an inconsistent income for several years, repeat this process for each previous year. See if there are any times that produce more income than at other times. See if you can come to some sort of average. If you’ve been making $24,000 a year for the past three years, you know that you’re going to average about $2,000 a month. In months when you make more than that, save everything  above the $2,000 for those months when you do not make that much money. This can give you some stability throughout the year. There’s more than one way to do this. Here’s another article for more ideas.

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Step 2: Know Your Expenses

Once you know how much you make, you need to know how much you’re spending. This one should be obvious. If you don’t know where your money is going, you can never make sure it’s getting saved. Just because it’s obvious, though, doesn’t mean it’s easy to determine how the money is leaving your bank account. what is a need and what is a nice to have. Making changes to how you’ve been living can be difficult. It can be hard to distinguish between what is a necessity and what really is a nice to have.

Now that you’ve identified your expenses, separate them into two categories. The first category is for expenses that do not vary from month to month, such as rent or mortgage. While not impossible, it’s not likely that you will be able to convince your landlord or the bank to change their monthly fees. The second category is for expenses that can change from month to month. The second category is where you can make your money. This category includes groceries, gas for your car, your daily coffee, and even your utilities.

Compare your expenses to your income. How are you doing? Do you have any money left over? If you do have some left over, how much is it? Where does that money go?

Step 3: Come up with a Plan

This step deals with two questions. 1) How much should I save? 2) How should I save? A budget is a plan on how you are going to spend and save your money. There’s nothing magical about a budget. You make a plan and stick to it, even when it’s hard. Budgeting is about more than deciding where your money is going to go. It’s also about making sure that you’re saving enough for your needs, wants, and goals. There are a lot of apps out there that do a great job of tracking income and expenses. My wife and I have decided that the way that works best for us is using a pen and paper.

How much you should save is an answer that you should arrive at after thinking about your financial goals and looking at your financial health. A lot of people say that you should have a cash reserve of 3-6 months worth of expenses. This is money in the bank waiting and ready for when you get hit with an emergency. Having this much in savings can provide a lot of peace of mind and decrease feelings of risk. But our goal right now is getting over the $1,000 threshold.

Look at your second expense category. Remember, this is the category that you can control. Divide everything in that category into needs and wants. For example, although there are ways that you can decrease your electric bill, having electricity in your home is something that you need, not just something that you want. On the other hand, while you have to eat every day, you probably do not have to eat at a restaurant every time you go to lunch.

Once you’ve distinguished between your needs and wants, start cutting the wants. You don’t have to cut everything, but you need to cut enough to meet your goal of saving $1,000 within the time period you have pre-determined for meeting this goal.

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Step 4: Be Accountable

Any time you set a goal, whether it is going to the gym or eating healthier, it is a lot easier to achieve that goal if you have someone that can keep tabs on you. Having someone you can be accountable to will help you save $1,000. Tell a friend, a roommate, or a family member what your plan is and then update them regularly on your progress. Talk to them about your successes and failures. Be honest.

If you don’t have someone to hold you accountable, that’s ok. You will need to find a way to hold yourself accountable. Write your goals down and put them where you will see them everyday, multiple times a day. Put a copy of your budget on the fridge, in the bathroom, and by your bed. Take one to work with you for when you are tempted by coworkers.

My wife and I have two whiteboards hanging in our bedroom with goals written on them. One of our goals is to save $1,000 each month. This is a constant reminder to each of us that we need to be careful about how we spend our money each day so that we can achieve our monthly goal.

Step 5: Evaluate and Modify

My wife is my teammate. We go over our budget and our financial health on a monthly basis. We review our increase in savings and identify problem areas. We also look at whether or not we need to increase one of our budgets. Going over our budget regularly lets us see how we’re doing in the short-term but also make sure that we’re doing ok on a long-term basis.

As you work towards your goal of saving $1,000, you might discover that some of things you initially cut from your budget you cannot actually live without. You may also discover there are some things that you thought you needed that you can live without. It’s ok to change your plan. It may take a couple of months for you to figure out what works best, but stick with it.

Good luck saving!

When life throws you a curveball, you’ll be ready. When problems come, it’s never fun, but if you have some money saved, it will probably be easier to deal with them. On a happier note, when something comes along that you really want, you’ll be able to cover it. Good luck saving!

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The Pros and Cons of Doing Online Surveys for Money

A common suggestion is getting paid to take online surveys. This was something I tried for a couple of years. I didn’t make a whole of money doing it. I made a little bit of money doing it. There were some things I liked and some things I didn’t. Over the course of about 3 years, I used 3 different online survey services and made about $200.

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Pinecone Research is an invite only service. I was lucky enough to get an invite, but once I started using it, I decided I didn’t like it. As you took surveys, you earned points. The site offered a lot of high-end products that could be purchased with  The problem was that everything on the site cost so many points that you would have to spend hours every day to get enough points to “buy” something worthwhile. At the end of the day, I did not see this as a great way to earn extra cash. If you have extra time and want to get some fancy things without spending money on them, this is not a bad way to go. If you’re looking to make some extra money, keep looking.

E-rewards was another service I used. I used it off and on over the course of a year and a half. This service did not allow you to get cash. It allowed you to get gift cards to places like restaurant.com, airlines, and for magazines. I stopped using this service because I felt like my return on time spent was not worth it. I didn’t think that the amount of points I was getting for each survey completed was worth the time I spent on each survey. On top of that, I was not really interested in the rewards they offered. The best reward I got was a one year subscription to the “Entrepreneur” magazine.

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Opinion Outpost was by far the best service I used. I was able to exchange my rewards for cash or on websites that I actually use, like amazon.com. In the end, though, I stopped using Opinion Outpost because I did not feel like the return I received on the amount of time I spent was worth it. I would get about 50 cents for every half hour I spent–not a very good wage.

My opinion is that if you’re looking for something to fill your time, you want to get something but you don’t want to spend money to get it, or you really only have a free half hour every day, online surveys are great. But, I decided it wasn’t worth my time. I decided that I could get a better return on my time, by spending my time with my family, developing new skills, learning new things, or working on other projects.

Have you used online surveys? What do you think about them? How have they worked for you?

One of the Most Important Elements to Being a Great Dad

This is my first blog post on the most important element of being a great dad. In my short time as a dad, I’ve discovered that this thing is more important than any other aspect of dad-hood–find and marry the right spouse. I am lucky enough to have been able to do that. Here is just one example.

My wife is amazing, and I am a nerd. That, I think, will be a common theme on this blog. Three years of studying in a law library is enough to suck the practical skills out of most normal people.  My wife, on the other hand, is incredibly handy. For example, she replaced the window switch in my ’99 Nissan Altima when the window stopped working so that I wouldn’t have to drive around in the middle of winter with my window stuck halfway up. My thought: Why don’t we just sue the manufacturer?

Well, she’s found herself a new project. She has decided that our bed is not fancy enough and that we need to update it. She managed to refurnish the sheets, pillows, and blankets, buying them at discounted prices. (She doesn’t pay full price for anything.) Next on the list, actually building a headboard. She is going to construct a piece of furniture out of wood and fabric and staples. She’s going to use a staple gun.

My wife is amazing, and that, my friends, is the most important element of being a great dad. Keep reading for a description of and some pictures of her headboard designing process.

She researched headboard designs online, pouring over pictures until she found the design that would be right for us. Then, she searched websites to find a design. Now, she’s working through the design process. Here are some pictures:

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