It's an inevitable occurrence; at some point you will need money for bills: a new car, health insurance, or expenses for a new home. During these times, it often won't be enough to simply cut back and cross your fingers. This is where the art of “budget hacking” comes in handy.
I've successfully done budget hacking twice before. Once when I was twenty-seven and needed to find room in my budget for a car payment (my parental hand-me-down had died and I was in need of something reliable to get to and from work) and a second time over a year and a half later and wanted to become my own boss, but needed to shell out for health insurance.
I call it “budget hacking” because you're trying to find fresh and clever ways to reduce your monthly expenses to accommodate for something new. It's super unenjoyable to have to increase the amount you're paying each month for the “must haves” while cutting back on the fun stuff and maintaining your financial goals, which is why it is important to save on the mandatory things where we can.
There are two different ways to find room in your budget for new expenses: cutting back each month and hustling for extra cash.
How to Find Money for Bills in Your Existing Budget Every Month
Method #1 – Study Your Expenses and Reduce in the Biggest Areas
At the time (2014) I needed to purchase a new car I was stealthily plugging away 40% of my income. I was pretty proud of that number and didn't want to reduce my savings rate to accommodate something that didn't retain its value like a car.
- So I took a good, hard look at my budget and found the averages of what I spend each month in most categories.
- By looking at my expenses I realized I was investing a large portion of my monthly corporate paycheck into running and maintaining this blog. I considered that money an investment in myself and my future business, but I figured I needed a working vehicle more than I needed great Pinterest images for my website, so I cut this number way down to about $50 each month, and made the switch to saving for big business expenses instead of trying to cash flow every item in the month it occurred (for example, my Awkward Money Chat videos.) Total Monthly Savings: $250
- I also cut down my bi-weekly sessions with my therapist from twice a month to just once, which is something my therapist and I discussed doing anyway. Savings: $50
Adding the two together gave me a total savings of $300 each month, which was $25 over what I needed to afford the $275 car payment on a sweet 2013 Nissan Rogue. Success!
Related: 37 Ways to Save More Money
Method #2 – How to Find Money in Your Budget: Haggle Discounts on Fixed Expenses
I recommend doing a quarterly or bi-annual audit of your utility bills and other “fixed” expenses to identify areas of savings. I hadn't tried to lower my bills like this in over a year, so when I left my full-time job in April, I started taking every Tuesday morning for a month to call up these companies and talk to them about lowering my bills.
Here's where I was able to nab additional savings:
- Mortgage: From 904.00 each month to 853.00/ saving 51.00 per month. I had finally become 20% vested in the property and as such asked them to take the Private Mortgage Insurance premium off my monthly tab.
- Cable: I finally cut cable and my internet bill went from 117.00 to 84.00/ saving 33.00 per month
- Security System: I negotiated a “customer loyalty” discount – from 48.00 per month to 38.00/ saving 10.00 per month
- Car Insurance: I previously had both home and car insurance with one company, thinking they were giving me the best deal…and that it's, well, you know, easier. After lots of homework, I found out that I did have the best price homeowners insurance with the company, but could get a much better deal on car insurance going with another provider. The switch lowered my car insurance from 163.00 each month to 116.00/ saving 47.00 per month. Try using a car insurance comparison engine like TheZebra.com to quickly and easily compare rates across the various carriers in order to find the most competitive rate.
At the end of the day, budget hacking will only cost you a few hours of time and a little bit of your sanity. If you don't feel like doing the work yourself, services like BillCutterz offer a fantastic alternative and they'll negotiate your bills for you.
Need Money for Bills ASAP? Try These 7 Sources
There are many reasons you might need a biiiiit more money thatn what you make on a monthly basis. Paying down debt or saving up for a big purchase are some of the most common reasons for wanting to make extra money. But with rising healthcare payments and cost of living, sometimes just finding enough cash to pay a bill can be difficult. Instead of pulling out your hair, and frantically searching your couch for spare change, try your hand at a side hustle, which is important when it comes time to find money for that next bill payment.
Don't worry – there are plenty of ways you can hustle some quick money. The next time you find yourself in need of some extra cash, check out some of these options and see what works best for you.
My favorite side hustle is blogging and online writing. If you’re thinking about starting a blog of your own, you’ll need to get self-hosting in order to make money. Click here to get your own self-hosted blog with HostGator for just $2.75 per month using my special link, and then come back here for step-by-step tutorial on installation.
#1 – Writing Articles
Whether we like it or not, our world has gone online and shows no sign of going back. You can use this trend to your advantage and use your internet connection to make a little extra money this month.One of the most potentially lucrative ways to make money online is through freelance writing. There are thousands of companies out there who don't have the time or staff to fill their writing needs, and the online content beast needs to be fed.
If writing for someone else sounds like a drag, then start looking at what it would take to create your own blog. You'll want to pick a niche for your blog to focus on and then look into all of the ways you can start monetizing your spot on the internet. Writing and blogging are not for the faint of heart. It's hard, it takes time, and sometimes you can go a while without having any assignments. But it can also be one of the most lucrative ways of making money, and many bloggers make more from their blog than they could from a full-time job. Try Fiverr, Upwork, or online job boards for writing assignments with a quick turnaround time and fast payment.
#2 – Be a Virtual Assistant
With the rise in solopreneurs, there are many business professionals out there who can't handle all of the work necessary to keep their gig going. Sites like the aforementioned UpWork or Fiverr make it easy for you to connect with individuals who are looking for administrative services.
Or you could put together your own professional website and charge more than you'd get through these sites.
#3 – Put Your Graphic Design Skills to Work
There are dozens of ways you can make money off of your more artistic talents. From selling photo or art prints on sites like Redbubble or Society 6 to selling merch with some of your designs on them, this is a great way to make some passive income. Make sure you take some time to market your goods, so other people can discover your talents and pay you for them.
Related: 10 Best Side Hustles for Busy People
#4 – Online Surveys
Are you going to get rich taking online surveys? No way, but if you need between $50-$100 to pay a bill before it goes to collections (and shows up on your credit) online surveys can get the job done. Read our five favorite survey sites here to start with ones you know are legitimate and have a good payout.
Try Offline Hustles to Find Money for Your Next Bill Payment
Working online can be great, but sometimes you need a break from the screens. If you work at an office job where you're in front of the computer all day, maybe you want to look for something you can do offline.
#5 – Babysit or Nanny
No matter where you live, there's no shortage of busy moms who need someone to watch their kids. With some research and good references, you can find some people in need of kid watching services. Some of them are willing to pay you well for your time, too! If you're a mom yourself, you could offer to watch another child or two and set up some play dates for your kids.
# 6 – Give Tours of Your City
If you've lived in the same place for years, chances are you know your way around. The tourist business is a booming industry, filled with people who want to get an insiders view of what it's like to live in a certain place. You can start advertising your own tourism gig, or sign up with sites like Vayable, Shiroube, or ToursByLocals
#7 – List a Spare Room
Speaking of the tourism business, travelers are always looking for a place to stay. While many of them choose hotels, services like Airbnb are becoming more popular, as they give people the feeling of staying at home. You can sign up to be a host with Airbnb, or rely on more traditional advertising methods like the newspaper, signs, or word of mouth to spread awareness about your spare room for rent.
Even if you're not a fan of strangers coming and going through your home, if you have a spare room, consider a roommate in order to add more money to your monthly budget.
Chances are good that if you can think of an activity, there's a way to make it into a side hustle. Try out some of the methods listed above, or if you can think of other ways to hustle, you'll likely be able to make some extra cash doing it!
Editor's Note: This post originally appeared on Financial Best Life on February 24th, 2016. It was updated in July 2018.