Building Wealth – Even If You Think You Can’t
by Donna Freedman, guest blogger
I’m always on the lookout for ways to cut corners, stretch available funds and bring in a few extra bucks. Every dollar I don’t have to spend, and every extra dollar I can find, is money I can put aside for the future – or, sometimes, to spend on something like a theater ticket or a visit to my daughter.
In a nutshell: I save where I can so I can spend where I want.
People write entire books on the subject of how to spend less or earn more. All I have is a single blog post, so I’m going to suggest eight specific techniques.
Note: The reason I put in links to my MSN Money “Living With Less” columns is not because I’m tooting my own horn. It’s because the articles contain a lot of practical info on making your money work for you. I’ve learned a lot by researching these pieces, and I’m glad that EARN has invited me to share some of it.
1. Get paid to save with an individual development account. Ask EARN about these! An IDA kicks in $2 or $3 for every $1 you save toward buying a home, starting a business or putting a child (or yourself) through school. Part of the deal is that you also take some personal finance classes, which can be tough if you’ve got a job and/or kids. But it can be done. I spoke with a single mom who was pretty skeptical about the IDA idea: “It just seemed far-fetched – free money?” But now she’s living in a home of her own along with her daughter and her mother. “Three years ago,” she told me, “I was a single mom in the projects.” Please let an IDA change your life, too.
2. Sign on with a free personal money coach. EARN offers this service, too. We’re not talking about someone teaching you how to balance a checkbook. No, this is a partnership between you and a financial expert who will help you with money management skills, tips on building credit, the basics of investing, and other ways to stretch available funds and eventually to build wealth. Note: You won’t be lectured to or judged. You will be empowered. Because after all, it is your money.
3. Get yourself banked. An estimated 9 million American households are "unbanked," with neither checking nor savings accounts. And they pay for it, both in the short term (check-cashing fees, money-order fees, the danger of loss or theft) and the long term (an inability to earn interest, establish credit or get loans). Even if you’ve bounced checks or overdrafted, you can probably find an institution willing to work with you, especially with help from programs such as Bank On (EARN was one of the founders) and Operation Hope. You’ll learn better ways to manage your money and you will be able to avoid the payday-loan trap; for example, Mission SF Credit Union offers a “payday alternative” loan for short-term emergencies, as well as services such as auto and small business loans and low fees for sending remittances. Note: Citizenship is not an issue if all you want is checking – you do not need to give a Social Security number for a non-interest-bearing account. Having your money in an FDIC-insured institution will protect you against fire or theft.
4. Find free stuff. Have you checked out Freecycle.org? You can get (or give) furniture, clothing, toys, books, appliances, even food. (Some people post pictures, so you can see whether that free couch is handsome or hideous.) I’ve gotten canning jars and free fruit through my local Freecycle chapter, and I’ve found new homes for things as varied as the complete music from “The Nutcracker” to five empty oatmeal boxes. You could also check out online swap sites such as SwapMama, Kashless and U-Exchange; follow the link to learn how to use these sites. You’d be amazed what people are giving away.
6. Find free services. In a column called “When you’re too broke for the basics,” I outlined a number of items that you can get for free: health care, medications, glasses, rent assistance, birth control, business attire, shoes, help with energy bills, even a free cell phone. Follow the link above for specific information. Every dollar you don’t have to spend on the light bill is a dollar you can use to put nutritious food in your kids’ mouths or to set up an emergency fund. I’d also suggest checking out the tips in “Free toothpaste for life!” (I don’t pay a dime for most of the toiletries I use, and I get extremely good deals on the rest) and “Free samples: How to get ’em.”
7. Develop a side hustle. I babysit and pet-sit. My cousin drives a school bus mornings and afternoons, and cleans houses in between. A young student I interviewed started her own part-time “concierge” business: She grocery-shops, does errands, house-sits and generally makes life easier for busy folks in Washington, D.C. Put the word out that you’re willing to do light cleaning, mail packages, walk kids to school if their parents have to go to work early. Listen to what people say they don’t have time to do, and offer to do it for them – for a fair price.
8. Earn money online. It really is possible to make a few extra dollars by taking online surveys or becoming a mystery shopper, and to get free gift cards through rewards programs. I do all three, so I can tell you that while you won’t get rich, you can bring in a little extra. Follow the links to learn more about these legitimate ways to earn money; the articles will explain how, and how not, to do these jobs. (There are a lot of scams out there.) In addition, you may be able to sell your skills through sites like Elance and Fiverr.com; see “Need cash? Make extra money online” for specific details. Note that you probably have skills you haven’t thought about, such as the ability to “jailbreak” an iPhone or to test video games. Heck, one woman I interviewed got paid to draw pictures in the sand.
No single technique will make your rich. But each one is a start. They say the longest journey begins with a single step. In this case, the journey to financial freedom takes place one frugal hack at a time.
(Donna Freedman writes for MSN Money and on her own site, Surviving and Thriving.)
Photo credit: r-z
