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What is your financial situation right now? Are you making ends meet or are you struggling? Maybe you are somewhere in between. The choices we make every day with our money seem insignificant at the time.

What’s $5 for some snacks at the convenience store? What’s $20 for that cool new case for our phone?

In the long run, these small everyday purchases have a big impact on our bottom line. They determine how comfortable we are at the end of the month when all our bills are due.

For me, I’m lucky in that I don’t have to struggle to make ends meet at the end of the month. I have a buffer. I’ve taken the time to budget my money and built up an emergency fund.

But it wasn’t always this way.

Back in 2007 at the height of the housing bubble I bought my first home. It was one I couldn’t afford but I was approved for the mortgage anyway. Luckily as I was looking for a house, a good friend of mine was looking for a place to rent. He ended up becoming my roommate in my new house.

If it wasn’t for him paying me rent every month, I would have been bleeding money. Just my mortgage, HOA fee, and utilities were more than I was making in a month.

I was surviving on peanut butter and jelly sandwiches and putting just enough gas in my car to get me to where I was going.

The problem was other expenses. I didn’t think these things through too much. I just bought things on credit, assuming my finances will change for the better.

That led to me getting myself into debt. And this led to a lot of stress by adding another monthly bill to my plate.

Trying To Live On $1,000 A Month

Recently I found the online game Spent and must say it was a blast from the past. It took me back to the days of thinking through all my purchases, trying to survive on my income.

The premise of the game is that you’ve lost your job and house and are down to your last $1,000. Can you to survive on $1,000 for a month?

As you play the game, you need to find a job, a place to live, buy food, and deal with everything else life throws at you. The game only takes 10 minutes to play, so I suggest you try it out. You can play a few different times as each time the scenarios are different.

Click on the image below to play the game. When you are finished, you can read my experience below.

How To Live On $1,000 A Month: Lessons Learned

How did I do trying to live on $1,000 a month? I failed to survive on $1,000. I ended up running out of money after 12 days. I thought I was smart about my spending decisions, but life kept throwing me curve balls.

I could have run away from the accident or not answered that collection call. But I just couldn’t do it. I’m too honest!

The most striking thing that I learned from playing the game is how expensive it is for health insurance.

Many low income earners forgo health insurance because of the cost. But if any issues come up, they will cost you much more money than if you were paying for health insurance each month.

It sounds simple to buy coverage, and from a strictly personal finance point of view, this is the right thing to do. But many cannot afford it without forgoing something else. There are so many tough choices that you need to make.

For anyone reading this post that is living close to the edge, realize you aren’t alone. It can feel like this when you see others with the latest gadgets and vacation posts on Facebook. But the truth is, over 60% of Americans cannot come up with $1,000 in the event of an emergency.

If this describes you, here is my advice for helping you to break from the cycle and start growing your wealth. I realize it isn’t easy to change your financial situation.

But if you have a plan and stick with it, in time you will begin to see some changes for the positive.

9 Steps To Change Your Financial Situation

#1. See Where Your Money Is Going

You really need to set up a budget so you know where your money is going. I remember the first time I sat down and made a budget. My eyes were as big as saucers when I saw just how much money I was spending eating out.

As I spent my money, I didn’t think $10 here and there really added up. But it did. By knowing just how much I spent eating out, I made some small changes and freed up a little bit of money. Then I tackled the next area.

To get started with a budget, you have a few options. The one that works for many is a basic spreadsheet budget. Of course, if you want to use an app, my favorite is GoodBudget.

It doesn’t matter which one you choose, just the one that works for you. Record your spending for a month so you can see exactly where your money is going. As with my eating out, those little purchases can make a big difference.

You can also use the calculator below to compare your spending to others in your area.

I know even though a budget is important, some of you still aren’t interested in taking this first step. The problem with this is that you will never really change you situation if you don’t understnad where you money is going.

You will wake up 5, 10, 20 years from now in the same or worse financial shape.

You don’t want that and I don’t want that for you.

So here is my compromise. If you really aren’t interested in following a budget, try this out.

Practice patience. When there is something you want to buy, don’t buy it unless you need it to survive. Otherwise put it back and wait a few days.

Chances are you will have forgotten about it or have realized you don’t want it any more. Congratulations, you just saved yourself from wasted spending!

Related: See the many dumb ways you are wasting your money

If you want to take this idea one step further, take some time to figure out what you value and what makes you happy, then spend your money on these things.

When I did this, it was revolutionary. I was buying new cars and other stuff. I thought these things were making me happy, but they weren’t. They were my way of trying to show off or fit in with others.

Once I figured out what I valued, I stopped buying stuff and found I had a lot more money left over at the end of the month. And I didn’t miss these things. In fact, I was happier because I was spending my money on the things that I really did enjoy.

#2. Find Areas Where You Can Cut Back On Expenses

Once you see where your money is going, it is time to try to find ways to cut back. Some options include buying alternatives, like store brands over name brands.

You can also limit your spending. You can live off of Ramen noodles for awhile. Buy non-perishables like canned vegetables that will last. Take advantage of food stamps. It may not be glamorous, but don’t worry what others think and be proud of who you are and where you are going.

As I mentioned earlier, when I was struggling to get by, I was eating peanut butter and jelly sandwiches for lunch every day for months and even for dinner too.

#3. Cancel Unused Expenses

Do you still have a gym membership that you never use? Maybe get magazines in the mail you never read? You can save money by ending these subscriptions. And thanks to Trim, it gets done for you! When you open a free account, they will scour your expenses and find bills that you can cancel.

They will also scan your bills, including your cable and internet bills and work with you to get a better price than what you are paying. It’s a great way to get a quick review of your expenses. You can learn more here.

#4. Take A Look At Your Big Expenses

This includes your mortgage and student loans. Can you refinance your student loans to save money? Maybe refinance your mortgage as well? What about lowering your insurance premium?

Lowering these large expenses can have a dramatic impact on your monthly cash flow and allow you to have some breathing room because you will free up a few hundred dollars each month right away.

Another possible option is to challenge your property tax assessment. If you are paying a lot more in property tax on a similar size house compared to your neighbors, you can save a good chunk of money.

And don’t forget about health insurance. This is a big expense as well. If you aren’t covered by health insurance at work, be sure to shop around for coverage to try to save the most money.

Even then, because of the high cost of health insurance, you might be tempted to pass on coverage. This isn’t ideal as you never know when you may need it.

#5. Make Saving A Priority

In other words, make sure you save first. Too many times people spend first and save what is left over.

It doesn’t take a genius to see that if you are spending all the money you earn you won’t be able to save what is left.

Read now: Click here to learn the easiest way to pay yourself first

Instead, make it a point to save when you get paid. You don’t have to save a lot of money, just save something to start building a buffer and improve your finances. How can you save money when money is tight? Here are a few options.

Inquire at work. Many times your employer will let you split your direct deposit between banks. If your employer allows this, have the majority of your paycheck deposited into your checking account and have a smaller amount transferred into your savings account.

Many times your employer will let you split your direct deposit between banks. If your employer allows this, have the majority of your paycheck deposited into your checking account and have a smaller amount transferred into your savings account. Set up automatic transfers. Log on to your bank account and create an ongoing transfer. Make it occur once a month for $10. Then the money will be saved without you doing anything.

Where should you save your money? My favorite is CIT Bank. They offer an online savings account that usually has one of the highest yields in the country. By having a high interest rate, your savings will grow faster.

To open your free savings account, click here.

By making saving money a habit, it will be easier to increase the amount you save down the road as your income increases.

#6. Find Other Income Sources

You don’t need to work a low paying job here. With the internet, you can turn just about any skill, hobby or talent into an income.

You can easily earn anywhere from an extra $100 to $1,000 or more per month. It is up to you how much effort you want to put into it. Just remember, the more effort you do put into it, the more money you can potentially make.

For example, you can start taking surveys with Survey Junkie. Take 30 minutes first thing when you wake up or right before bed and complete 2 surveys. If you can do this a few times a week, you can easily make $100 a month. Click here to get started!

Like the idea of making money from surveys? Joins Springboard America as well. By joining multiple survey companies, you gain access to additional surveys and can make even more money on the side. Click here to start with Springboard America.

Read now: Click here to learn how to make the most money with online surveys

You could also try out Swagbucks. This is a site that let’s you earn points you can turn into cash. You earn points by taking surveys, playing games, surfing the internet, watching videos and more.

Read now: Click here to learn how to get started with Swagbucks

Of all the ideas listed here, Swagbucks is the easiest to get started with.

You can click here to sign up for free. New users get $5 when you sign up!

Another option is Shopkick. This is an phone app that gives you points for walking into stores, scanning barcodes and buying things. It simple and works. I’ve earned a $25 Walmart gift card just by scanning barcodes and walking in stores. I haven’t spent a penny.

Read now: Click here to learn how to earn gift cards and cash fast using Shopkick

You can get started with Shopkick by clicking here.

For more ideas, here are over 51 money making ideas to consider trying.

#7. Be Smart When Spending Money

Advertisers trick us into spending money. They get us emotionally connected to a product so we think we need it. Then a few days later, we realize we didn’t need it and suffer from buyer’s remorse.

Luckily to beat advertisers at their game, we have a trick we can use. I call it the pause test. All you have to do is wait before you buy something. For example, when you see something you want, wait a few days before you buy it.

In many cases, you will forget about the item or realize you don’t really want it. When this happens, congratulate yourself as you just saved yourself some money.

While this works for things you don’t need, what about things you do need? Here are a couple tips to help you save money.

Ask for a discount. You’ll be amazed at how many times this works.

You’ll be amazed at how many times this works. Find coupon codes online. Before you buy, look for a discount online by searching for the company and the word ‘coupon’.

Before you buy, look for a discount online by searching for the company and the word ‘coupon’. Use cash back websites. You can get up to 25% cash back on your purchases when you shop through Ebates. As a bonus, new members get a free $10 gift card just for joining.

By taking 5 minutes to be a smarter shopper, you can easily save yourself a lot money.

#8. Start Investing

Putting money into a savings account is great and is critical for covering you in case of an emergency. But eventually you are going to have to start investing money into the stock market.

I know some of you might be scared to invest, but investing isn’t complicated. The hardest part of it is keeping your emotions out of your investment decisions.

To be successful as an investor, you buy low cost investments and add money on a regular basis. The only catch is you don’t sell, even if the market is tanking. The reason is emotional. You sell when you get worried.

Look back to the last crash in 2008. Most investors fled after losing a lot of money and stayed out of the market for years. But if you stayed invested through the end of 2017, you would have made all your losses back and then more than doubled your money.

For example, let’s say you invested $5,000 in the stock market at the start of 2008. That year the market was down 37% and you would have been left with just $3,150. But if you stayed invested, you would have made your money back by 2012. And by the end of 2017, you would have over $11,000. The key is to stay invested!

Here are a couple brokers I recommend you look into to get started with investing:

Wealthsimple : they are a robo-advisor, which means you open your free account, answer some questions about your goals, and set up a monthly transfer to invest. They take care of everything else. The best part is they will round up your purchases and invest your spare change! Click here to learn more.

they are a robo-advisor, which means you open your free account, answer some questions about your goals, and set up a monthly transfer to invest. They take care of everything else. The best part is they will round up your purchases and invest your spare change! Click here to learn more. Acorns: they take care of everything for you as well, and Acorns will round up your purchases and invest that money for you as well. What is cool about them is you can get free money in your account by shopping with their partner retailers. They are perfect for people living on a tight budget to get started investing. Click here to learn more.

I love both of these because they meet my points above about low cost investments and adding money on a regular basis. All you have to do is not sell if the market drops.

#9.Stay Positive

Everyone experiences setbacks in life. Learn to not get down when a setback happens and instead grow and become a better person from it.

Check out the video below for some perspective and realize that no matter what setback you might be experiencing you still have it better than most.

Final Thoughts

Living on $1,000 a month is not easy. But if you are in this situation, you don’t have to settle and accept it. There are things you can do to change your circumstances, you just have to be willing to put in the effort.

If you can take steps to better your situation, you will begin to see changes. Use those achievements as motivation to keep pushing through and reaching your goals.

If you make no changes, your current life with the stress and unhappiness will be your life forever. And without making a change, the stress and unhappiness will grow along with your debt. Make the sacrifice and better your life.

For me, I made the sacrifices. I made it a point to put $10 away each month in a savings account with CIT Bank. I shopped for store brand groceries. I found the grocery store that offered the lowest prices in my area. I didn’t buy new clothes for a few years and went without the latest smartphone.

Other things I did included:

I stopped using my dryer and put my washed clothes on a drying rack.

I plugged all my electronics into a power strip and when I left for work, I would unplug that to save electricity.

I replaced my light bulbs with higher efficiency LED bulbs to use less energy.

I took money I received from tax returns, my birthday and Christmas and used that to pay down my credit cards. Once the debt was gone, used that money to build up my emergency fund.

I found things around the house of value that I didn’t use and sold them on eBay and Craigslist.

I also worked hard at my job and earned a few raises as the economy turned around a few years later.

It all paid off. Shortly after getting my second raise, my friend moved out to live with his girlfriend. I was now on the hook for everything. Luckily, I was able to afford to live on my own through all the sacrifices I made.

Money was still tight, but I was saving money each month and paid off my debt. This allowed me to keep improving my financial situation and get to a point where money was no longer a stress in my life.

Those lessons I learned during that difficult time served me well. I became a smarter consumer and a great saver. It allowed me to leave my employer in 2013 to work for myself.

You can overcome this. It will be hard and it will take time. But you will come out the other side stronger and more confident. This will pay off in more ways than just financially in the future.

And remember, the sacrifices you make today are not permanent. Sacrifice a little now and be better off for many years to come.