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At Adding Pennies, we show you how to put money back in your pocket.
We do this in two ways:
- Showing you how to save money
- Showing you how to make extra money
For example, if you usually spent $300 per month on dining out (the average) and were able to reduce it to $100 per month, you would have an extra $200 a month in the save money area.
Let’s say you also made an extra $100 from receipt scanning apps.
Now, you have an extra $300 per month.
That is a lot of pocket change.
Although Adding Pennies is not about replacing your income, that is money that could go toward small bills like car insurance and cell phone.
Many people frivolously spend this money without noticing.
That is really all your hard work down the drain.
You need to not only be aware of the amount of extra money you made or saved, you also need to put it aside.
Then, you can put it toward your bigger financial goals.
Money that has no destination, even if just to pad your savings account or buy that Apple Watch you have been eyeing, is money that is wasted.
Here is how not only to be aware of your extra money so you can add it to your net worth, but how to put it toward your bigger financial goals.
Then, you can make progress.
How This Blog Helps You Make Extra Money
Adding Pennies helps you put money in your pocket in two ways again:
- Saving Money
- Making Extra Money
Here is an explanation of both.
1. Saving Money
There are many ways to save money.
Some of the most common areas to save in are:
- dining out
- groceries
- clothing
- electronics
- car insurance
- gas
- car payment (have no payment)
- lodging
- entertainment
- cell phone
- cable
Saving money can not be underestimated.
In one of my favorite finance books, “Your Money Or Your Life,”‘ the author shows how people were able to leave their full time job and work part time by reducing their expenses.
As Americans, we love to spend money.
Often, you find things are not even missed.
Sometimes, people spend money because of stress or time management problems.
Like I mentioned earlier, a area to cut is dining out.
The statistics say people spend at least $300 per month on eating out.
That is a car payment.
I am a Foodie.
I love food, but this is one of the first areas that most people can cut again.
I mean you can have your restaurant and enjoy it too.
I will do a post on how I eat at restaurants for as little as $50/month later.
If you cut that in half, you would have an extra $150.
2. Make extra money
The blog also shows you how to make extra money.
Some of the things that make you extra money include:
- receipt scanning apps
- credit card referrals
- other referrals
- bank bonuses
- online shopping sites
- surveys
- Swagbuck’s Discover
Again, if you use our receipt scanning apps page, you can usually make an easy $100 just for taking a picture of your receipts.
This is the first place I suggest most people start.
It is the easiest thing to do.
How long does it take to snap a picture a receipt?
Seconds, right?
What do you do with this extra money?
As I said earlier, it may be tempting to frivolously spend your extra money.
After all, for a second you are talking about $5 from Fetch, $10 from Shopkick each week, or $20 a month from Ibotta.
To some people, this would just look like “beer money” or pocket change.
If you read my receipt scanning page, this is an extra $100/month again.
That was just receipt scanning apps too.
In the earlier example with dining out, that would be an extra $250 a month ($100 from receipt apps and $150 for cutting dining out in half).
Although Adding Pennies is not about replacing income, an extra $250 per month can even pay some small bills paid again like car insurance or even gas money.
If you had just thought this was “beer money” or pocket change, you would have missed an extra $250.
.
So, the first step is to be aware of how much extra money you are making or saving.
The best time to track this is over a month period.
You will start to get a consistent figure.
After awareness, next you need to separate this money from your earning and other money.
You can put all your money aside in a separate account.
In the past, I even used an envelope in my drawer.
Since most of the activities I do use PayPal, I have a bank account I transfer this money to from PayPal.
It is separate from my main bank account.
I like having several bank accounts that cost me nothing like the online Aspiration bank account.
I think if you are going to let your money build up over months, a high interest saving account may be a good idea.
How To Put This Money Toward Your Bigger Financial Goals
You could just pad your savings, but you can accomplish bigger financials goals.
Some sample financials goals include:
- Emergency Fund
- Electronics purchase
- Other things in your budget
- Down payment on a car or cash payment
- Paying off credit card debt
- Kid’s college
- Retirement
These goals range from short-term to long-term goals.
I strongly suggest debt repayment and an emergency fund if you have high interest debt or have no emergency fund.
You can even set a part of it aside for fun money
One Word About An Emergency Fund
Most people live paycheck to paycheck.
Many people cannot cover a $500 emergency according to a recent report..
So, it is important to have an emergencu fund.
The recommendations is 3-6 months.
If you don’t have that yet, it is ok.
A lot of people don’t.
You have to start somewhere though, and it is easier than you think.
If you cannot reach three to six months, you should try to aim for at least $1000.
If you cannot reach $1000, start with $500.
If you cannot reach $500, (and when I first started, I did not even have that) start with $100.
Any cushion is better than nothing at all.
Even if just a $100, you have something and because any emergency can happen, you want to get it up to $1000 as quickly as possible.
Then, go for 3-6 months as fast as you can.
So, if you have no money put aside, a good goal might be to put some of your extra money toward an emergency fund.
It is like wearing a life jacket when you go swimming.
It will start to put you in control of your money.
Make sure to pay off high interest debt or have a plan to
The second tip is to pay off any high interest debt.
If you owe $20,000 in credit card debt, maybe you just want to work to pay off a $500 credit card.
You can work your way up to paying more over time.
After you pay off debt, if you were using credit cards and carrying a balance before, start using your credit cards for normal expenses and paying your balance in full and getting money from credit card rewards.
You should never carry a credit card balance.
If you currently carry a balance, work to pay it off.
If you are someone who cannot handle credit cards, then by all means you can just pay them off and not care about reward credit cards.
You should work to pay off all your credit card balances and never pay interest again though.
Read how to use reward credit cards here.
Steps To Put Money Toward Financial Goal Recapped
- Put your money away each month and let it build up at the end of month
- See how much you have at the end of the month and be aware
- Put money in separate accounts or away
- Look at list of short-term and long-term goals
- Develop a plan
- Make sure to have some kind of emergency fund
- Pay some debt off if possible
Summary
I see a lot of people refer to the extra money from the activities on this and other blogs as “beer money” or spare change.
While Adding Pennies is not about replacing your income, $5 from Fetch, $10 here and there from Shopkick, and saving money techniques usually yields a couple extra hundred a month.
A couple hundred a month is big amount of chunk change.
Most people frivolously spend this money again.
Without awareness, you might not even know you had a couple extra hundred a month.
Maybe you are one of the few after saving money on something like dining out, automatically put it toward another financial goal.
Even if you put the money to a personal goal like shopping or traveling, you know where the money is going.
Without doing this, all your hard work was for nothing.
So, make sure you don’t leave out this important step.