{"id":3465,"date":"2013-02-22T02:49:44","date_gmt":"2013-02-22T10:49:44","guid":{"rendered":"http:\/\/add-vodka.com\/?p=3465"},"modified":"2015-07-09T11:16:55","modified_gmt":"2015-07-09T18:16:55","slug":"how-to-prosper-on-a-small-salary","status":"publish","type":"post","link":"https:\/\/add-vodka.com\/how-to-prosper-on-a-small-salary\/","title":{"rendered":"How to Prosper on a Small Salary"},"content":{"rendered":"

My wife and I don’t make a lot of money. We both have liberal arts degrees and work for non-profit organizations. While we may enjoy what we do during the day, we have come to understand that neither one of us will likely make a 6-figure salary. That’s okay \u00a0by us because we are still able to save money each year. In the past year, we were able to grow net worth\u00a0<\/a>and save nearly 40% of our income.<\/p>\n

\"small<\/a><\/p>\n

Too often I hear my friends and colleagues complain about how they don’t make enough money. While this may be true, the secret to financial success is not to earn more money each year, but to learn to thrive on a small salary. Despite not even making close to $100,000 combined last year, we were able to significantly improve our financial situation while paying for graduate school AND living in one of the most expensive regions in the country. While I don’t have a magical formula, I have learned several things that have allowed us to prosper on a\u00a0small salary.<\/p>\n

Step 1 – Control Your Spending<\/strong><\/h2>\n

This may sound simple, but it’s far from it. When my wife and I were just married (and making even less money), we were barely making ends meet. Without exaggeration, we earned an average of $200 above and beyond our normal mandatory expenses (with budgeting $300 for groceries). This meant that if we went out to eat and spent $40 in one night, we had $160 left for our discretionary fund. While I don’t miss these days, I am glad that we went through this because it taught us an invaluable lesson of how to control our spending. If you realize that a high salary is not in your immediate future, one of the few options that you have for financial success is lowering your expenses. It really is that simple.<\/p>\n

Step 2 – Use Credit Cards for Most Purchases<\/strong><\/h2>\n

While not the typical advice for low-income earners, my next basic advice is to use credit cards for most, if not all of your purchases. My wife and I started using credit cards during college and we couldn’t have imagined the huge benefits of doing so. Not only do we earn about $500 each year by buying things that we would normally buy anyways, but we also are building up our credit score. Our credit score will be helpful in a couple years to get a lower interest rate on our mortgage (saving us even more money). Last but not least, it also provides us protection if anyone were to get our information. Any unauthorized charge would be inspected by a fraud team at the credit card companies. This doesn’t mean that I don’t keep a close eye on all charges, but it does provide me a little more reassurance than if I were using a debit card (which doesn’t offer the same protection).<\/p>\n

Step 3 – Start Investing (even if it’s only a little)<\/strong><\/h2>\n

The next thing you have to realize is that the only way that you will be able to retire is if you start investing now. Without a lot of money to invest, the only other thing that you have to your advantage is time. The younger that you are, the more time you have for compound interest to do it’s thing. The best thing that you can do is to use a tax-advantaged account like a 401(k) or Roth IRA. Even if you don’t know which individual stocks to buy, you can always start with target date retirement funds<\/a> that will reallocate your portfolio as the years go by. All you need to do is to invest the money regularly.<\/p>\n

Step 4 – Earn a Little Extra\u00a0<\/strong><\/h2>\n

Last, and only last, should you focus on increasing your income. Last year, my wife and I focused on earning a little extra and it helped out a lot. Since we had already been spending less than we were earning, we were able to invest every extra dollar that we made. Instead of making money first and blowing it on a quick thrill, we already had our financial priorities established. I’m convinced that this is better than a high income immediately after graduating from college.<\/p>\n

Achieving financial success is not as simple as earning a lot of money. It’s all about surviving with what you do have. My wife and I learned this over the past years and I couldn’t be happier. By making these small sacrifices, we can continue to work jobs that are meaningful to us and avoid selling out to the highest bidder (aka employer).<\/p>\n

This post was written by Corey from 20’s Finances<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

My wife and I don’t make a lot of money. We both have liberal arts degrees and work for non-profit organizations. While we may enjoy what we do during the day, we have come to understand that neither one of us will likely make a 6-figure salary. That’s okay \u00a0by us because we are still …<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[231],"tags":[],"class_list":["post-3465","post","type-post","status-publish","format-standard","hentry","category-money-2"],"yoast_head":"\nHow to Prosper on a Small Salary<\/title>\n<meta name=\"description\" content=\"It's not impossible to live on a small salary. 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