Are you living paycheck-to-paycheck? If so, you're probably not alone.
Based on the June Financial Security Index from Bankrate, more than a quarter of Americans didn't have a penny in emergency savings, and another 18% had only enough in an emergency fund to cover up to three months' worth of expenses should an emergency arise. On the flipside, just 28% surveyed had saved the recommended amount of money to cover six or more months of expenses should an emergency arise.
As a whole, the United States is a nation of poor savers that probably relies far too heavily on credit cards and debt to meet our needs. Our country's personal savings rate was just 5.3% of income as of May 2016 per the St. Louis Federal Reserve, and total outstanding credit card debt, per CardHub, as of Q1 2016 was $885.4 billion. That's the highest Q1 credit card debt total since the first quarter of 2009.
30 ways to give yourself a raise
Long story short, Americans need to find creative ways in the short- and long-term to give themselves a raise so they're not always strapped for cash. Thankfully, there are a lot of ways you can give yourself a raise. In no particular order, here are 30 things you can consider doing to keep more Benjamin's in your pocket.
1. Live life on a budget: According to Gallup in 2013, only a third of American households keep a detailed monthly budget. If you don't budget, then you probably don't understand your monthly cash flow, and if you don't understand your cash flow, you can't optimally save. Budgeting software can help get you on the right track.
2. Go to college: Sometimes spending money helps you save money. Pew Research in 2014 noted that millennials between ages 25 and 32 with at least a four-year bachelor's degree were earning a median of $17,500 more per year than their same-age counterparts with only a high school diploma. Having a college degree should give you more economic mobility, too.
3. Consider attending a workshop or seminar: Attending a workshop or seminar could improve your knowledge within your work field. The more specialized your job and/or knowledge, the more valuable you are to your company; and the more valuable you are, the better chance you have of seeing a raise in the future.
4. Open/contribute to a Roth IRA: A Roth IRA provides no upfront tax benefits, but the investment gains within a Roth are completely tax-free for life. Imagine not having to pay a cent in taxes on Roth IRA distributions during retirement!
5. Open/contribute to a 401(k) or Traditional IRA: An employer-sponsored 401(k) or Traditional IRA will require you to pay taxes when you begin making withdrawals during retirement, but the contributions you make to these retirement accounts are before-tax dollars. This means your current-year tax liability falls when adding money to a 401(k) or Traditional IRA.
6. Buy a dividend stock: Dividend stocks are the gifts that keep on giving. They can hedge your downside in a falling market, and reinvesting your payouts over time can allow you to accumulate more shares of stock, leading to bigger dividend payouts, and even more shares of stock. This repeating process is known as compounding, and it's what the pros use to get rich.
7. Hold your stocks for the very long term: When buying stocks, consider holding them for the long-term, which is at least a year and a day. Short-term capital gains are subject to ordinary tax rates that range between 10% and 39.6%, whereas long-term capital gains taxes are much lower: 0% (for the 10% and 15% ordinary income-tax brackets), 15% (for the 25%, 28%, 33%, and 35% income-tax brackets), or 20% (for the 39.6% income-tax bracket).
8. Refinance your mortgage: Lending rates remain near their historic lows thanks to economic uncertainty and Brexit, meaning if you're paying 4.5% or higher on your mortgage, it could be worthwhile to consider refinancing to a lower rate and saving money each month.
9. Consider banking with a credit union: With interest rates as low as they are, big banks are looking everywhere to boost profits. This includes charging checking account fees to consumers for not maintaining a minimum account balance. Credit unions are often smaller and more community-oriented. They also have less of a tendency to nickel-and-dime their customers or require a minimum account balance.
10. Pay down your debts: Once you have a stranglehold on your budget, you can consider paying down your debts. Remember, your best strategy is going to be to tackle your highest interest rate debt first. You may also consider consolidating debt on a low APR card to help reduce what you owe.
11. Set up automatic payments on basic expenses: Ever had a late payment? The fees associated with late payments, and potentially higher interest rates on credit cards, can be a killer. By setting up automatic payments for basic expenses you can avoid ever dealing with late payments and associated fees again.
12. Negotiate with creditors: It may be a little-known fact, but banks and creditors usually have room to negotiate a lending rate to earn your business. Feel free to pit banks against one another to see which one will give you the best deal on a mortgage or refi, and don't be afraid to ask your credit card company to consider lowering your variable interest rate if you've been a timely paying customer.
13. Adjust your tax withholding: Since Americans are so terrible at saving money, most relish Tax Day since it means a juicy refund. In fact, about 80% of American tax filers get a refund each year. But, you don't have to wait until tax time to get your money. Simply adjust your tax withholding on a W-4 and keep more of your money now as opposed to letting the government hang onto it as an interest-free loan until tax time.
14. Use cash for purchases: Buying goods and services with a credit card is simple and convenient. Almost too simple and convenient that we don't equate the value of what we've bought with our drop in monetary value. However, using cash allows us to witness the firsthand reduction in our wealth (i.e., our wallet now has less cash in it), and it'll make you think twice before making a discretionary purchase.
15. Have a yard sale: According to Signs.com, in 2013 there were about 690,000 people buying items at a yard sale each week, totaling about $4.2 million. Over the course of a year we're talking about $220 million in sales generated from things just sitting in garages and attics across the U.S.
16. Moderate your thermostat: According to Energy.gov, you can save an average of 10% annually on heating and cooling costs by moderating your thermostat usage. Turning your thermostat 8 F to 10 F above or below its normal setting while you're away or sleeping can substantially cut your energy bill.
17. Rent out your home: Another way to give yourself a raise is to consider renting out a room in your house via Airbnb. The rate you charge will often be dependent on your location, but with 60 million users as of February 2016, and around 500,000 Airbnb users staying in hosts' homes per night, there's huge income potential.
18. Eat at home: Based on data from the Bureau of Labor Statistics in 2014, the average consumer spent $2,787 on food away from home. Eating out from time to time is fine, but cooking even a little more often at home could result in substantial savings.
19. Cut the cable cord: Tired of your expensive cable or satellite bill and bundled packages that include hundreds of channels you don't watch? Consider unplugging and switching to a streaming service such as Hulu, or watching movies with a comparatively cheap monthly subscription via Netflix.
20. Use coupons: According to RetailMeNot, 96% of consumers use coupons, and Inmar notes 2.84 billion coupons were redeemed by consumers in 2014. With a little strategizing, coupons can dramatically reduce your grocery shopping bill.
21. Take online surveys for cash: It's no secret that businesses will pay you for your opinion if it'll help them reach a larger audience with their goods or services. Sites like MySurvey.com will pay you to take surveys and offer your opinion. You won't get rich doing surveys, but it's an easy way to give yourself a raise when you have down time.
22. Turn a hobby into a side job: Another way to give yourself a raise is to turn a hobby into a side job. Do you enjoy making handmade jewelry or painting? Consider turning these in-house or studio creations into saleable goods on a platform like Etsy or eBay.
23. Regularly maintain your car: Once again, spending money now could save you big money later. Doing the simple things like changing your oil, your transmission fluid, and keeping your tires properly inflated, can reduce your chances of a costly engine or transmission repair.
24. Consider public transportation: If you live in a relatively populous city, consider taking public transportation or even riding a bike. Public transportation is often better for the environment, and it'll take less of a bite out of your wallet than putting fuel in your car, truck, or SUV.
25. Retire in a tax-friendly state: When you do retire, consider putting your feet up in a tax-friendly state. There are 13 states that tax Social Security, and nearly every state has a different set of rules and exemptions when it comes to how retirement income is taxed. Do the math before you retire and pick a state that won't nickel-and-dime you with taxes on retirement income, property taxes, and sales taxes.
26. Prepare your own taxes: Consider using tax-preparation software and doing your own taxes in the coming year as opposed to paying a markedly higher fee for a tax professional. Tax-prep software has evolved immensely over the past decade, and in many instances it can walk you through the preparation process step-by-step.
27. Shop around for health insurance: Don't assume that your current health insurance plan will remain the best value moving forward. Insurers change premiums and coverage options on an annual basis, and it's in your best interests to shop around for the best value. Simply re-enrolling without exploring your options could be costing you money.
28. Go see your doctor: Spending money to see the doctor now could give you a big raise (in a roundabout way) later in life. The reason you should see your primary care physician often is so he or she can catch potentially chronic medical conditions early. The earlier these conditions are caught and treated, the less likely they are to become troublesome and costly later in life.
29. Ask for generic medications: Based on data from the IMS Institute for Healthcare Informatics, generic drugs already account for 88% of prescriptions written, and this figure could jump to 91% to 92% of all scripts by 2020. Generic medications are often 10% to 20% the cost of a branded drug, meaning big savings for medical patients.
30. Forgo your vices: Finally, consider giving up some, or all, of your vices. Stop buying lottery tickets, quit purchasing tobacco-based products, and cut the alcohol consumption. These vices, which feed off of consumers' addictions, can quickly drain your wallet.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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