I got this idea from Hiro over at Twisted Paths. She is doing a 1 paycheck challenge which consists of her living on just one check the whole month. I’m taking this to the next level and living on $10 a day. I’m going to tell you each step to what I’m doing (like she did) so that you guys can try to reproduce this yourselves! If you want to follow this journey in real time (started August 7th until September 7th) check out my twitter: @DudeThatsErin.
I didn’t think I would be able to commit to a 1 paycheck challenge let alone $10/day for a month but I needed to save. Well, before I started this challenge (and why it is 7 days late for starting) I went through my bills and tried to save $5 a check or $10 a check or even a month. I get paid bi-weekly so that could be 3 checks in a month (depending how the months are laid out). So, I was going to try to do $10 a month this month and then go up to each check next month. This month I’m going out of town and my paychecks hit in weird places so that’s why I had less money.
Well, I figured out that I could afford to pay all of my Credit Card bills early with my last check from last month so I did. Now I am able to do this challenge and build up my savings to $1k by December. 😀
Step 1: What’s my take home pay?
Whatever you call it, you have to calculate what you get when you take home. I was talking to her on Twitter and she gave me some good advice. I work retail at Best Buy and my hours fluctuate so I don’t have a set amount that I make each month or even each check. It changes depending on my hours and I just got my annual raise so that also makes it more difficult to know how much I’m going to get paid. She told me to go off the lowest that I make each check. So, if you have the last 6-8 checks and they are between 600 and 800, set your savings at the lower end (600) and anything over that will just be additional savings you have.
Make sure to calculate how much is taken out for a 401k, Health Plan, and any benefits as well.
Step 2: Calculate your living expenses.
I calculate your living expenses as expenses you need in order to continue living. These are things like groceries, rent, gas for your car, electricity, water, gas for your house, car payment, etc. I look them up and list them out like this:
- Rent: $0 (I live at home)
- Electricity + Water: $XXX during the summer
- Gas for car: $XX for going out of town
- Gas for house: $XX during the summer
- Car Payment: $XX
- Groceries: $XX
- Cell Phone Payment: $XX
- Internet + TV Payment: $XXX
When you finish listing them out, add them up. Hopefully, you have at least a $10 difference that can go towards a savings account.
Step 3: Add in other bills/expenses.
Once you have the total from Step 2. You should list out any other expenses that you have for your living situation. This would include credit card bills, hosting for websites, snacks at work, going out to eat, etc.
- Credit Card Bill 1: $XX
- CC Bill 2: $XX
- CC Bill 3: $XX (and keep going)
- Website Hosting: $X
- Snacks @ Work: $XX
- Restaurants: $XX
See if you can eliminate the snacks at work and restaurants to keep your payments down. If need-be, also try to find a free host where you can get your website(s) online for free to eliminate that payment as well. As far as the credit card bills see if you can up those to the amount it states to pay off your cards in 3 years rather than the minimum payments. If not, that’s okay but if you can even for one card to get it paid down faster, that’s great. It is also best to pay more on the card with the highest interest monthly. For me I have 2 Chase cards, a Walmart card, and a Best Buy card. So, I’m trying to pay down both my Walmart and Best Buy cards as they have the highest interest payments but I have a greater focus on the Best Buy card as it has the highest amount on it out of the two.
Once you get this figured out, you can move to the next step.
Step 4: Budgeting
Make sure to give yourself a few dollars wiggle room in case a bill comes out unexpectedly or something is a little higher than it should have been. If you have to take out cash for snacks and such, do that. Just to make sure you don’t spend any more money than that particular amount that you have set.
I’m keeping track of this by hand. I have a handy planner that is really a sketchbook that I’m using to keep track of my challenge.
As for my budget, I’m putting the minimum payments towards my cards this month and I don’t have a hosting payment and I’m giving myself $10 a day for snacks and restaurants. If I decide to go out to eat, I have to save up my $10 a day payments to go towards that. For example, I went out to eat with my sister to Applebee’s on the 7th (first day) and spent $55 which I’m rounding up to be $60. Which means I can’t spend anything for 6 days. I am on day 3 (as of writing this) and so far so good. I was off the last 2 days though so we will see how this goes up until the 14th. 🙂
Step 5: Reflection at the End
I’m going to post a blog with my reflection but you can go back and look at your finances and rejoice about how much you saved this month. Try and challenge yourself to do it for good so that you have a nice savings being built up for those just in case moments where you need new tires (me ugh) or your car breaks down or you crack the screen of your phone. This makes sure that if you have to buy a phone outright (for example) you are not limited (as much) by your choices as you have the money for those just in case times.
If you decide to do this with me, let me know in the comments! What do you guys think of this challenge? Do you think it is feasible?