Zero in Savings? A New Year Means New Opportunities to Increase Your Savings - The 52 Week Money Challenge

Written by Lyn Brooks, Staff Writer

Zero in savings? We started 2016 with $0 in savings. Sadly, my family and I are not alone. According to a late 2015 survey by GoBankingRates, 28% of Americans have zero in savings, and 62% have less than $1,000 saved. What are any of us thinking? Who do we expect to help save us should a financial emergency occur? Santa Claus?

Whenever I think about the current state of my family's finances and our lack of savings, which is almost constantly, I start to feel a bit down, but then I remind myself that a new year means new opportunities!

How We Ended Up with Zero in Savings

The last few years have been extremely difficult, financially. I've survived several critical, and expensive to treat, illnesses. I then lost my job in the Great Recession.

When I couldn't find a new job in my area, I turned to freelance writing to try to make ends meet. For those of you that aren't freelancers, writing is truly a feast to famine proposition, but in my area there really isn't any other opportunities to increase my income.

My local economy is still depressed, with new layoffs being announced each week, so it continues to look unlikely that I will find a new job any time soon that will bring in more than what I manage to rake and scrape together freelancing.

In addition to my unstable income issues, last year my husband needed to resign his position of nine years and was then unemployed for another six months.

During this time, our home and garage suffered extensive damage during a winter storm that saw over three feet of snow fall in our area in less than 24 hours. Then the temperatures slipped to 24 degrees below zero Fahrenheit, taking out all of our plumbing. We lost a good portion of our personal belongings. We are still having issues getting the insurance settlement released so that we can finish repairing and rebuilding everything that we lost.

A few months later, my mother, who has been staying with us after surviving a stroke, accidentally caught a pan on my stove on fire. It took out the stove, the two walls around the stove and the exhaust and two cabinets above, as well as smokey soot on the ceilings and surfaces throughout my home. So, now we are without a stove to cook on, in addition to the other issues.

We've  ended up spending our entire life's savings in order to survive through all of these trials. It was the only way to avoid filing bankruptcy. It's still difficult to make ends meet, but slowly we are clawing our way back.

I am 47, my husband is 54, and, we have no savings!

Steps We Are Taking to Begin Rebuilding Savings

This is a new year, hopefully it will be a better one for us, and millions of others, financially. As this new year is starting, I know this is the year that we must at least begin to think about rebuilding our savings. We are both getting older, and not in the best of health, so, realistically, there really isn't a lot of time left to rebuild our retirement nest egg.

401(k) Savings

Our main issue at the moment is that we realistically don't have a lot of expendable income to divert to savings. My husband just became eligible to contribute to his new employer's 401(k) and so he is contributing 10% at the moment.

It's the start of the new year, and my income from writing really doesn't start picking up until later in the spring. I suppose I could wait to being saving, but I really feel that it's important to start now, while I have this "new year, new opportunity" mindset and momentum  going for me.

Saving Tax Refund

Of course, we already plan to save the bulk of our tax refund that we will receive later in the spring, and that should be a little over a thousand dollars. I really want to do something in addition to this and my husband's 401(k) contribution though, something that will get us back in the habit of setting aside money for our savings on a regular basis.

Start Small and Build - The 52 Week Money Saving Challenge

That's why we've decided to do the 52 Week Money Saving Challenge. It's a really simple strategy to help folks get back in the weekly habit of saving money. I like it because it starts with a small amount, just $1 the first week, and lets you slowly increase the amount you are saving each week, so that it feels less painful to your budget. It also works out well with the cash flow cycle that is generated by my freelance writing income.

Getting started is really simple. Set aside $1 at the end of the first week, $2 for the second week of the year, $3 for the third, and then continuing on and adding just one additional dollar that you set aside for each week of the year. At the end, you should have $1,378 saved.

I know that in the grand scheme of things, $1,378 is not really a lot of money. Certainly not enough to retire on in a few years. But, it does help us to begin rebuilding our savings.

As the year continues, I plan on looking for more ways for us to increase our savings. To reach our goals, we will need to cut back on spending, as well as looking for ways to grow our income. I plan on sharing my journey with you. I hope that sharing my successes and failures, will help others, and, I hope that you, dear reader, will help me by sharing your tips and words of encouragement in the comments section!

Getting Started Saving Money

2016 began on a Friday, and so, I began my week 1 on the first day of the year. This year will also end on a Saturday, so my week 52 will end on Friday, December 30th, instead of the 31st. Week 5 just recently passed, and so, I have $15 in my savings at this point. ($1+$2+$3+$4+$5) This coming Friday, February 5th, will be the start of Week 6 and so I will deposit $6 to our savings account on this date.

Again, I know this isn't a lot, but it's a start! It's also still not too late to join me! Just deposit/transfer $15 into your savings account, or, if you don't have a savings account yet, put it in a jar or other container to save up and deposit later. Then, as each week passes, increase the amount that you add to your savings by just one dollar more. At the end of the year you will be $1,378 closer to reaching your grand savings goal.

We are saving to build an emergency fund, and then, add to our retirement savings. How do you plan to use your savings?

Photo Credit: Flickr, Images_of_Money

How We Are Breaking the Cycle of Living Paycheck to Paycheck

Written by Lyn Brooks, Staff Writer

Editor's Note: This article, How We are Breaking the Cycle of Living Paycheck to Paycheck, originally appeared on Yahoo! Finance in 2014, where it was a featured article. 

According to the Bureau of Labor Statistics, overall unemployment in America was down to 6.6% as of January, 2014. While this is certainly good news, significant challenges to long term economic growth remain, so, it's wise for households to prepare for another economic downturn. That's difficult to do if you are living paycheck to paycheck.

According to a recent article in Time magazine, over half of all Americans are still living paycheck to paycheck, 44% of American families have less than $5,887 in savings, and 56% have sub-prime credit. Sadly, after losing my job in the Great Recession, and facing unprecedented, catastrophic medical bills, my own household is part of that statistic.

At one point, after we had exhausted our savings and 401(k) plans, maxed out our credit cards, and ran out of unemployment benefits, our financial situation was so desperate that we almost lost our home to foreclosure. Slowly, we've managed to claw our way back from the brink of total financial ruin, but, we are still living paycheck to paycheck. I know that even though our finances have started to improve along with the nation's economy, we have to take action now to break the cycle of living paycheck to paycheck.

We've taken the following steps to break this cycle and regain control of our finances.

Take Stock of the Situation

The first step that we took to gain control of our finances was to take an honest and complete inventory of what we were spending our money on. We used a spreadsheet but you can take the old school route and write it down a piece of paper. Regardless of what method you use, make a list of where each penny goes for the next 30 days.

Create a Realistic Budget and Get Everyone on Board

Next, sit down with your spouse, or significant other, and talk about where the money is going, and where you can cut expenses. This is harder than it sounds. My husband and I had several painful conversations when we started this process, and to be successful, everyone has to give up their "sacred cows." It's very important that every member of the family gets on board and contributes to making the new household budget and commits to sticking to it. Otherwise, you will just sabotage one another's efforts and you will fail before you even start.

Negotiate with Service Providers

As part of the budgeting process, contact every provider and attempt to negotiate reduced rates for all of the services that you pay for. Many providers offer discounts based on bundling services, or if you belong to certain groups, organizations or even where you bank. By contacting our car insurance carrier, we were able to get our bill cut by 20% and save $600 year just because of whom we bank with. We were able to slash our telephone bill in half by eliminating certain features that we hardly used, and bundling our phone service with our internet service. This saves us $360 a year. We got rid of our triple digit cable bill, saving us over $70 a month and now use a popular streaming service that also allows us to choose unlimited DVDs each month for less than $30 a month. By talking to these three providers, we save over $1,800 a year.

Slash the Grocery Bill and Costs for Eating Out

Look at how much your family spends on eating out, as well as on the grocery bill, and learn how to drastically cut costs by learning how to cook at home. Even if you have a busy lifestyle, you can make delicious, filling, and cheap soups and casseroles in a slow cooker by tossing in fresh produce that is in season, bulk dry goods such as dried peas and lentils, cuts of meat that are on sale and marked down. 

If you have the space and the know-how, try planting a small garden and growing some of your own produce and herbs to save even more. 

Sometimes, for a treat, we do eat out, but we usually go during lunch hours instead of dinner. Many sit down restaurants offer lunch specials and other discounts during this time, and you will save money if you get water with lemon rather than paying for coffee, tea, soda or other beverages. Using this strategy saved us over $5,000 on our annual grocery bill when we first adopted it.

Set Savings Goals and Pay Down Debt

Once you have slashed your expenses, start savings goals and stick to them. Start by saving $100 in a rainy day fund. Then, move on to bigger goals, such as $1,000 in an emergency fund, and then saving at least three months of living expenses. 

Start or rebuild your retirement fund at the same time. In addition to establishing savings funds, use part of the savings from your budget to pay down your credit card and other debt and make a resolution to not incur new debt.

Enjoy Less Stress as You Get Your Finances Back on Track

My husband and I earn a modest salary, together, we earn less than $50,000 a year. Using these strategies, we've managed to save $100 for a rainy day and $1,000 in an emergency fund this past year. Now, we are working on saving three months worth of living expenses. 

We've also managed to rebuild our retirement fund to over $10,000, pay off $14,789 in credit card debt, and over $10,000 in medical debt and not incur any new debt in the last two years. It is a relief to no longer worry about how we will pay our bills.

We still have a long way to go to get back to where we were before The Great Recession, but we are slowly breaking the cycle of living paycheck to paycheck. Anyone can if they take the time to create a realistic budget and savings plan and be determined to stick to it.

What It's like when You Can't Afford Christmas Gifts for Your Family

In 2013, I wrote an article for Yahoo! about what it's like when you can't afford to buy Christmas gifts for your family. While the economy is improving, I know that many families are still hurting, so in honor of them, and the journey that I have been on these past few years, I am republishing my original post, here, on my own blog. I hope that it helps others that are struggling to know that they are not alone, and that like the old proverb says, "tough times don't last, but tough people do."

As Americans, each of us has a story of obstacles that we have overcome, it is part of our national identity I believe, and part of being human. If you have a story of a difficult Christmas that you have experienced in the past, or are experiencing now, why not share it with our readers in the comments section below?

Originally published on Yahoo, for Christmas 2012:

I lost my job of seven years a little over 20 months ago during the "Great Recession." I exhausted all of my unemployment benefits this past spring, and while I've been able to pick up some extra cash doing some freelance writing and my husband is still employed, it has been a very tough year financially. We've been struggling just to keep the lights on and keep from losing our home. Struggling to pay our bills makes it even more difficult to cope with unemployment and underemployment. There simply is not any money for Christmas gifts this year.

I know the true spirit of Christmas is not about how many gifts are under the tree, and even though my children are older and can understand, it still hurts to not be able to give them even a moderately priced gift. This year, I scoured some local used book sales and an area Goodwill to buy a few books by their favorite authors at $1 to $2 a piece to have at least something to wrap up for them, and I can't help but feel ashamed that I can't do more.

I have two beloved young nieces that I don't get see very often that I normally splurge on at Christmas, as I love to see how excited they are to unwrap their gifts from us. This year, not only will there not be gifts, we don't even have the gas money to go see them.

We've only had one other difficult Christmas that we couldn't afford gifts, back when I had cancer and my children were very young -- and a co-worker's family and friends surprised us all by adopting my children for Christmas that year. I am still grateful for their generosity, but it still hurts to be in that situation.

I know many other families are going through this same situation. I know I should be thankful my children are older and understand. I know I should be more thankful for what I do have -- but knowing this doesn't take away the pain, and the shame, that I feel at not being able to afford to do more for my family this year.

Still, despite these difficult financial circumstances, I find that I am grateful this Christmas. While there will not be any presents under our tree this year, or likely a tree at all, I am thankful for my friends and family, and the love and wisdom that they share, that makes it possible to weather this season with joy and peace in my heart. Sometimes, the best gift that you can give yourself during the holidays is simple gratitude.

Photo Credit: jpoirrier

How I Learned to Cope with Unemployment

Bread Line During the Great Depression 

While the economy has improved since the "Great Recession" began in 2008, millions of Americans are still unemployed or underemployed. Continue reading to learn more about how one contributor learned to cope with unemployment.

By Lyn Brooks, Contributor

In July of this year, the official unemployment rate hovered around 6.2%, but a new study conducted at Princeton University and released this August indicates that the true unemployment rate has been vastly understated by at least 1 1/2 to 2 full percentage points. Regardless of the actual unemployment rate, millions of Americans want to work but still can't find a job. Millions more are only working part time, or at a reduced rate of pay, so most folks are still facing challenging financial circumstances and learning how to cope with unemployment.

On "April Fool's Day" of 2011, I joined the millions of Americans who were fired in "The Great Recession." For the next two years, I submitted resumes, posted on job search sites, and notified every friend, acquaintance and family member that I was searching for a job, and received no job offers. It was hard to not become discouraged with results like that.

To me, the biggest challenge that I faced during that time was how to cope with unemployment. Suddenly, I had all of this unstructured time on my hands. It was so easy to fall into the trap of obsessing about being unemployed and turning to self-destructive behaviors such as over-eating and social withdrawal. The following are some activities that helped me to cope while I was unemployed, and I continue many of these practices today whenever I feel a bit stressed or pressured as a small business owner.

Walking

When I started to feel stressed out, I went for long walks. It's an activity that is free, burns calories, and can be done virtually anywhere. I live in a scenic town with walking trails; there are many parks and shopping malls nearby. When I can, I invite a friend to go with me, so I can combine socializing and walking. This is my number one activity to cope with the stress and anxiety that I felt about being unemployed.

Complete the "Honey-Do" List

Remember all of those household tasks that we all put off when employed because we don't feel we have "time" to do them? When I started to stress I looked around the house and completed one of those tasks. After becoming unemployed I now had time to clean out the garage and attic, and repaint the windows. Completing these long neglected tasks helped renew my sense of self-worth. I also earned some much needed cash and reclaimed space from selling the unused items that I "found" when I cleaned.

Volunteer

Soon after becoming unemployed, I began volunteering at my local nursing home. I helped the staff with sorting items that are used as prizes for Bingo night, and I spent time sitting with various residents and listening to them. There are so many people in assisted living that are cheered up by having the presence of someone that listens. This activity didn't cost me anything and I learned so much from listening to them.

Whenever I feel depressed about my circumstances, I just think about some of the stories I have heard from people who have actually lived through the Great Depression and World War II, and I feel both encouraged and thankful. Working with the elderly is not for everyone, but there are food banks, homeless shelters, local schools, libraries and many other organizations that need volunteers. If you find that you have too much time on your hands, consider volunteering for a local organization. You will diversify your resume, gain valuable insight, and enjoy yourself in the process.

Hobbies

Have a secret passion or talent that you've never had time to fully express when you were employed? Why not spend your time doing something you enjoy? Brush up on your artistic endeavors, complete some craft projects, and finish that novel you always wanted to write. You will not only get a sense of accomplishment and joy; you may find a way to turn a profit by turning your hobby into self-employment.

I have always enjoyed writing, so when I couldn't find a new employer, I began earning money on the side as a part-time Internet blogger. Over time, I was able to grow this hobby into a successful small business providing editing and copywriting services to B2B clients.

Some friends of mine pick up cash by selling hand-made jewelry and giving music lessons. One friend of mine has turned his passion for fitness into a business. For two hours each night he hosts a "Body Boot Camp" in our local park. People actually pay him to show them how to exercise. He now earns more money each month as a personal trainer than he did as a business executive.

The important thing to remember is that the ending of your job is not the end of your life. As the old saying goes, there is "opportunity in crisis" and we can all get through difficult times when we find positive ways to cope with the stress and anxiety in our lives. 

By finding ways to cope with stress and keep a positive attitude, losing my job ended up being one of the best experiences of my life, because it forced me to take a chance on my talents and work for myself by starting my own small business. Now, I actually make more money than I ever did working for someone else, and I am doing work that I am passionate about and that is meaningful to me. 

Photo Credit: buckle1535