Who doesn’t want to make a little extra cash these days? The price of digital cameras is dropping on what seems to be a daily basis. Why not put yours to some use? For the past five years I have been selling royalty-free stock photographs and will share my thoughts, ideas and concepts with you, along with some suggestions for getting started.
What is stock photography? The Wikipedia entry for stock photography states:
Stock photography consists of existing photographs that can be licensed for specific uses. Book publishers, specialty publishers, magazines, advertising agencies, filmmakers, web designers, graphic artists, interior decor firms, corporate creative groups, and other entities utilize stock photography to fulfill the needs of their creative assignments. By using stock photography instead of hiring a photographer to perform on location shooting, customers can save valuable time and stay on budget.
Everything for commercial use these days has some sort of marketing on it; often this marketing takes the form of a photograph. Take a look at your cereal box — there’s a photo on it. Flip through any magazine — someone took the photographs in all those ads. This website often uses images to help describe a story better — someone had to take those. You cannot legally just right-click and save an image from the Internet and use it on a website, print article or magazine. A marketing firm based in Florida may need a photograph of snow-capped mountains. They obviously don’t have mountains in Florida, so they turn to stock photos, which they can purchase at a reasonable rate. The photographer makes a percentage of that image sale.
How can you start making money? This is the first question everyone asks, but there are some precursor questions that should be answered first:
Do you have the time to invest (perhaps as much as four hours per week)?
Can you capture images other then your immediate surroundings?
Will friends and family be willing to sign model release forms?
Is your camera of high enough quality?
Do you know how to properly edit a photograph?
Will you be able to associate keywords to go along with your photo?
Will you be willing to invest more into gear and cameras?
Can you be objective with yourself?
How well do you handle rejection?
Are you willing to invest time to learn continually?
Do you have the time to invest? Editing photos takes time. So does giving them full descriptions and uploading full-sized images. This is aside from actually taking photographs. When I was doing this on a regular basis, I would often spend an hour or more a day just editing photographs, another two hours to upload and catalog them.
Can you capture images other then your immediate surroundings? In order to sell a photograph, you need to give the buyer something they can’t grab themselves. This rules out most of your everyday surroundings, including everything at your desk, kitchen, living room, even your sock drawer. Thousands of these images exist in stock catalogs already.
Will friends and family be willing to sign model release forms? One of the best ways to sell a photograph is to have somebody in it. In order to do this, the models in the images need to sign off their rights to collect any money for them. Often times, I will do a trade with friends and family. I’ll agree to bring my camera to so-and-so’s birthday party and photograph the event for them if one or three agree to give me an hour or two time around the house, at the park or wherever to pose and let me photograph them, and sign the release. This works out well for both parties.
Is your camera of high enough quality? Many online stock sites now have minimum requirements for files they will accept. Generally speaking, the baseline where you want to start is a 5mp camera. A digital SLR camera, one that you can change lenses on, is much more desirable as they produce better quality images. More megapixels doesn’t always mean better images; the quality of the sensor has a lot to do with it.
Do you know how to properly edit a photograph? Photographs can often be improved by making adjustments to them, such as:
Cropping
Color
Density
Shadow detail
Sharpening
A basic photo-editing program will be needed, as every image that comes out of your camera can always be tweaked a bit for better quality. I’ve been using Photoshop for years now, current version is CS2, but Photoshop Elements is acceptable. You might also like the GIMP, which is free for both Windows and Mac users. Any corporate name will also need to be edited out of an image. Logos, text or other copyrighted material cannot appear in a photograph that will be sold as stock.
Will you be able to associate keywords to go along with your photo? Stock photography sites use their own internal search engines; you find an image you’re looking for by putting in descriptive words. Nothing magical about that. It is when you need to convey more then what is physically in an image. You could associate 50 or more keywords with an image. This light bulb is an example of a stock photograph. If this were my photo for sale, some of the keywords I would associate with it are:
Light bulb
Glass
Red
Clear
Transparent
Illuminate
Idea
Copy space
As you can see, some are descriptive of the actual item, others are there as adjectives. The key wording “game” is directly related to how well people will be able to find your images. This will be covered in greater detail later on.
Will you be willing to invest more into gear and cameras? As you progress, you will find yourself needing better cameras and lenses, more gear such as studio lights, tripods and just spending more money. You may not make the money back for several months, maybe not at all, but would you be willing to make a small investment? I found myself shooting three cameras and in a studio paying rent for it at one point. It was very much worth it.
Can you be objective with yourself? Self-editing can be a photographer’s biggest downfall. I don’t mean editing the photographs in an image editor like Photoshop — I’m referring to selecting the best possible image from a group. The photographer who took the above light bulb photo more then likely has a dozen of them at slightly different angles; however, she chose what she thought would be the best example of that group. Uploading 15 photos of essentially the same photo all at slightly different angles doesn’t give buyers more choices, it confuses them and often leaves them second-guessing. Only show and sell your very best of the best images. I’ve found myself doing shoots with models with 400 or more shots from a two-hour session. When it was all said and done, I had about twenty I was really happy with and that’s all anyone ever saw.
How well do you handle rejection? More then likely you are going to get images rejected. How often? Don’t be surprised if 50% or more of what you submit gets rejected. Don’t let this get you down, use it as a tool to help build upon your growing portfolio.
Are you willing to invest time to learn continually? Whether you are new to photography or have been shooting for years, learning is part of the game. I’m on several different forums on a regular basis chatting with other photographers about how to shoot, tips, techniques and most importantly, critiques. Books and now DVDs are becoming increasingly more important tools to mastering different techniques as well and I often reference them prior to doing a shoot.
Conclusion As this series continues at my own site, I will be writing articles on specific topics, giving examples and suggesting ideas to really maximize a hobby into a source of income. Your comments and suggestions are welcome.
Much of this information is applicable to making money from any hobby. This article originally appeared at Randomn3ss in a slightly different format. The second part of this series gives a brief overview of a photographer’s workflow. The third part discusses types of images that sell well.
I had dinner with two friends from high school last night. We shared good wine, good food, and, especially, good conversation. Much of our discussion focused on our shared history: the things we did twenty years ago (or 25!) that now seem as if they might have been done by a stranger. (Yet those strangers were us.) We talked about how we perceived money when we were younger.
Sparky and Stew grew up down the road from each other. I didn’t meet either of them until junior high school. Stew’s family was poor. They lived in a single-wide mobile home. His father built bar stools in the garage; his mother waited tables. “I remember your dad as an entrepreneur,” Sparky said last night. “I remember him building those stools. I admired that.”
“Yeah, he was a sort of entrepreneur,” Stew said. “He tried, but he could never really make a go of it. We couldn’t survive on the money he brought in making bar stools. In fact, he financed that operation on credit cards. We lived on the tips my mom brought home from waiting tables. It seemed like she was always working to get us money. She hoarded her money. She watched it. She had to make it last.”
“Huh,” said Sparky. “I never realized that. I mean, I knew you were poor, but I always thought of your family as wealthy. You lived in a trailer house, and you didn’t have much, but when I visited your house, it was an adventure. I remember sleeping outside in the tent —”
“That’s because we didn’t have room inside,” Stew said.
“I remember sleeping outside in the tent,” said Sparky. “I remember you seemed to live in a fantasy land. It was like your dad had a dream job. You had a basketball court in the woods. And a wiffle ball stadium. Plus you and your brother always did this wild, imaginative play. It was awesome.”
“But I didn’t learn much about money from my parents,” Stew said. “I learned more from yours. I remember going over to your house and marveling that you had opened a savings account. I remember that passbook you had, and how your parents would drive you into town to make deposits. I went home and told my mom that I wanted a savings account, but it never amounted to much.”
“I still have that savings account,” said Sparky. “The same account my parents opened for me when I was a kid is my savings account today. So, yeah, I guess my dad wasn’t an entrepreneur, but he did teach me a lot about money. He did some business on the side — raising produce, growing Christmas trees — but mostly what I learned from him was how to save. And how to invest. I watched how he invested his money and let it grow. He’s played a very active role in his investments, so in a way I think of him as an entrepreneur of the stock market.”
“I wish my parents had taught me some of that,” I said. “Whenever my dad had money, which wasn’t often, he spent it on toys. He didn’t save. He didn’t invest. I can’t remember that he ever invested a dime in anything. He bought computers and airplanes and sailboats. But then when he was broke, he turned around and sold them again. We were always poor because he couldn’t save his money.”
Sparky laughed. “I remember going over to your single-wide mobile home and being scared that I was going to fall through the floor!”
We all laughed. I said, “It’s still that way, you know. The box factory’s offices are in that old trailer house, and it hasn’t improved with age. We’re just too damn cheap to replace it. Our wives hate the place, and I can’t blame them. But it costs nothing for us to keep.”
Sparky nodded. “You know,” he said, “even though you were poor, and even though I was afraid of falling through that floor, I looked around at all the gadgets you had and thought of you as rich, too. Your family had a fancy stereo system. Your dad let you drive that Datsun around when nobody else in school had a car.”
We paused to order dessert, and Sparky continued. “It’s as if although your families were poor, you created a world of wealth out of nothing. Stew had this fantasy wonderland of imagination. J.D.’s family had gadgets that I envied.”
“And I envied you,” I said. “I remember going over to your house and thinking how amazing it was to have a nice normal home on a lot of property. I wanted that. I liked having gadgets, but I would have rather not lived in the trailer house.”
Our chocolate torts came. We began to pick at them. “One thing I’m glad of,” I said, “is that my father taught me about the entrepreneurial spirit. I’m glad to have had a chance to learn from him. I used to hate working at the box factory, but now I recognize that I would not be the person I am today without that experience.”
“Yeah,” said Sparky. “We look at ourselves now and wonder how did we get here? But it’s all a result of everything that we’ve seen and done. The girls I dated in high school. The decade I took off after college to travel around the U.S. and the world. Sometimes it’s frustrating that I’m 38 and only make $30,000 a year, but I look at the experiences I’ve had, and I look at who I am today, and I know that I would not be this person without everything that had come before.“
I smiled. “I just wrote about this subject today,” I said. “I’ll post it on Sunday.”
In Secrets of the Millionaire Mind (my review), T. Harv Eker writes that each person possesses a “money blueprint”, an internal script for dealing with money that comprises the lessons we learned in childhood, especially from our parents. This conversation with my friends illustrates this concept. My problems with money as a young adult were a product of the blueprint I inherited from my parents. They were modeling a relationship to money — they never realized what sort of effect it would have on me and my brothers.
Yet this blog is a direct result of that modeling, too.
This is a guest post from the Millionaire Mommy Next Door. At her blog, MMND shares her recipe for success, happiness, and financial freedom. This piece originally appeared on her site in a slightly different format.
When my husband and I married (at age 23), I was working as an office assistant at a veterinary hospital earning $7.50 per hour. Unsatisfied with my low wages, I brainstormed ways to generate extra income.
Going to the Dogs
I had worked as a volunteer dog-trainer for the Humane Society since age 14, so I combined my experience and youthful exuberance into a part-time side business. I offered dog-training classes and taught them in the veterinary hospital’s backyard. It was a win-win situation: my employers had a new service to offer their clients, and I was self-employed, with very low operating expenses.
I soon added home- and pet-sitting to the services I provided. Within about a year, my part-time business was earning more than my full-time wages at the veterinary hospital, so I quit my job. Over the next few years, I expanded my business and hired a few part-time employees. It was at that point that I discovered the joys of working from home in my pajamas.
In the Pipes
Meanwhile, my husband served as a company-employed plumber working for hourly wages, earning $30,000 to $35,000 a year.
At age 30, I sold my dog-training and pet-care business (for about $75,000) and we launched a plumbing and heating business of our own. My husband served as the project estimator and plumber; I was the business manager and bookkeeper.
Our customers quickly spread the word about our new plumbing company. Within our first year, we had generated enough business (via personal referrals) to keep us busy and profitable. Building a business based on personal referrals completely eliminated the need for us to spend a dime on advertising.
Doing the Math
We soon faced an important decision. Should we expand our services by hiring other plumbers? Here are the two options we considered:
Option A: Continue to manage a small in-home business operated by:
1 full-time plumber (my husband; 40 hrs/wk)
1 part-time apprentice (20 hrs/wk)
1 part-time bookkeeper (me; 5-10 hrs/wk)
With this model, we could earn $250,000 annual gross revenue with 50% net profit (low overhead expenses means a higher percentage of revenue remains as profit).
~or~
Option B: Manage a storefront business operated by:
5 full-time plumbers (200 hrs/wk)
2.5 full-time apprentices (100 hrs/wk)
1 full-time bookkeeper (40 hrs/wk)
1 full-time manager (40 hrs/wk)
Under this scenario, we would earn $1,250,000 annual gross revenue (5 times more revenue, with 5 plumbers, than Option A above) with 10% net profit (higher overhead expenses means a lower percentage of revenue remains as profit).
Which business would you rather own? At first glance, most would likely say, “I’ll take the business that makes one-and-a-quarter million dollars each year!”
Whoa now, let’s slow down and do the math:
Option A: Small in-home business brings in $250,000 gross revenue and nets 50% profit = $125,000 annual net profit.
Option B: Larger storefront business brings in $1,250,000 gross revenue and nets 10% profit = $125,000 annual net profit.
Now that you’ve checked the math, which would you choose?
My husband and I chose Option A. Option A comes with fewer expenditures of time, energy and capital, as well as reduced risk. Option A nets the same profit as option B. As a bonus, option A allowed me to continue working at home in my pajamas.
Of course, if we hired 10 plumbers, we might make significantly more income. However, upon evaluating our priorities and values, my husband and I decided that we already made enough. We made the choice to work less rather than grow our business. In other words, a balanced lifestyle was, and still is, more important to us than money.
Learning to Invest
Since our plumbing business required only 5-10 hours/week of my time for bookkeeping tasks, I decided to learn how to invest on my own (without assistance from our broker). I dedicated almost two years to the study of equity investing via books, web sites, and conversations with investors. Once I had acquired the knowledge, confidence and skills necessary to invest successfully on my own, I fired our broker, saving us thousands of dollars in commissions and fees.
Once we reached our crossover point (the average annual return from our investment portfolio exceeded our annual expenses, plus inflation), we scaled back on our business. My husband currently works only two or three days a week. Now, he can be selective in the projects he accepts. For instance, he no longer unplugs toilets, but he still enjoys creative remodeling projects. If he chooses to retire or to do something completely different, we’ll sell our plumbing business.
Achieving Financial Freedom
Before traveling to China to bring our new daughter home, I hired a bookkeeper to replace me so that I could focus my time, energy and attention on parenting and pursuing my hobbies. Additionally, I’ve learned how to effectively manage our investment portfolio in such a way that this task requires just one or two hours per month of my time.
We have truly attained freedom, financial and otherwise. Whether it be work, parenting, or play, we wake eager to spend each new day doing whatever we choose. What a gift!
Recommended reading:
Want to learn my recipe for success, happiness, and a million dollars? Start here: Baby Steps to Financial Freedom.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
52k salary is a solid hourly wage when you think about it.
When you get your first job and you are making just above minimum wage making over $52,000 a year seems like it would provide amazing opportunities for you. Right?
The median household income is $68,703 in 2019 and increased by 6.8% from the previous year (source). Think of it as a bell curve with $68K at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $48,672 for a 40-hour workweek; that is an increase of 4% from the previous year (source). That means if you take everyone’s income and divided the money out evenly between all of the people.
But, the question remains can you truly live off 52,000 per year in today’s society since it is barely above the average income and yet still below household incomes. The question you want to ask all of your friends is $52000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $52000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $52k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$52000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 52k a year hourly. That way you can decide whether or not the job is worthwhile for you.
For our calculations to figure out how much is 52K salary hourly, we used the average five working days of 40 hours a week.
52000 salary / 2080 hours = $25.00 per hour
$52000 a year is $25.00 per hour
Let’s breakdown how that 52000 salary to hourly number is calculated.
Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $52000 by 2,080 working hours and the result is $25.00 per hour.
Exactly $25 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $3K, it would increase your hourly wage to over $26 an hour – a difference of $1.44 per hour.
To break it down – 55k a year is how much an hour = $26.44
That difference will help you fund your savings account; just remember every dollar adds up.
How Much is $52K salary Per Month?
On average, the monthly amount would be $4,333.
Annual Salary of $52,000 ÷ 12 months = $4333.33 per month
This is how much you make a month if you get paid 52000 a year.
$52k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $52k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$52000/52 weeks = $1000 per week.
$52000 a year is how much biweekly?
For this calculation, take the average weekly pay of $1000 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.
8 hours x 52 weeks = 260 working days
Annual Salary of$52000 / 260 working days = $200 per day
If you work a 10 hour day on 208 days throughout the year, you make $250 per day.
$52000 Salary is…
$52000 – Full Time
Total Income
Yearly Salary (52 weeks)
$52,000
Monthly Wage
$4333
Weekly Salary(40 Hours)
$1000
Bi-Weekly Wage (80 Hours)
$2000
Daily Wage (8 Hours)
$200
Daily Wage (10 Hours)
$250
Hourly Wage
$25.00
Net Estimated Monthly Income
$3308.50
Net Estimated Hourly Income
$19.09
**These are assumptions based on simple scenarios.
52k a year is how much an hour after taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.
When you make below the average household income, the amount of taxes taken out hurts your hourly wage.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 52000 a year after taxes?
Gross Annual Salary: $52,000
Federal Taxes of 12%: $6,240
State Taxes of 4%: $2,080
Social Security and Medicare of 7.65%: $3,978
$52k Per Year After Taxes is $39702
This would be your net annual salary after taxes.
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$39702 ÷ 2,080 hours = $19.09 per hour
After estimated taxes and FICA, you are netting $39,702 per year, which is $12,298 per year less than what you expect.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based on Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody that lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $52000 income can range from $35,542 to $41,782 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $52,000 income.
My 52k Salary Hourly Calculator
More than likely, your salary is not a flat 52k, here is a tool to convert salary to hourly calculator.
Many of the starting freight broker salaries are in this range (and before commission)!
Many teachers are hovering in this range, which may make you wonder do teachers get paid in the summer?
52k salary lifestyle
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person. And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $52000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.
For many, this is when they are looking at upgrading their car to something nicer, but you must be aware of is a car an asset or liability.
As we noted earlier in the post, $52,000 a year is slightly below the average income that you would find in the United States. Thus, you still have to be wise with how you spend your money.
What a $52000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to rent in a decent neighborhood in LCOL and even MCOL city.
You should be able to meet your expenses each and every month.
Ability to make sure that saving money is a priority, and very possibly save $5000 in 52 weeks.
When A $52000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 52k a year will be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending and extra expenses.
Break the paycheck to paycheck cycle.
Not using one of the millionaire quotes for motivation.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
Find low-stress jobs that pay well without a degree now.
$52K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money leftover is left for fun spending.
This is how zero based budgeting works.
If you want to know how to manage 52k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $52000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$202
Savings
15-25%
$780
Housing
20-30%
$1190
Utilities
4-7%
$152
Groceries
5-12%
$325
Clothing
1-4%
$26
Transportation
4-10%
$173
Medical
5-12%
$217
Life Insurance
1%
$11
Education
1-4%
$11
Personal
2-7%
$35
Recreation / Entertainment
3-8%
$87
Debts
0% – Goal
$0
Government Tax (including Income Tatumx, Social Security & Medicare)
15-25%
$1025
Total Gross Monthly Income
$4333
**In this budget, prioritization was given to basic expenses and no debt.
Is $52k a year a Good Salary?
As we stated earlier if you are able to make $52000 a year, that is a decent salary. You are making more money than the minimum wage and almost double in many cities.
While 52000 is a good salary starting out in your working years. It is a salary that you want to increase before your expenses go up or the people you provide for increase.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $52k salary would be considered a lower middle class salary. This salary is something that you can live on if you are wise with money.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).
The question you need to ask yourself with your 52k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in many modest cities 52,000 a year will not be a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 52,000 per year.
If you are looking for a career change, you want to find jobs paying at least $60000 a year.
Is 52k a good salary for a Single Person?
Simply put, yes.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $52000 per year.
And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.
Deep Dive: What Is A Good Salary For A Single Person in Today’s Society?
Is 52k a good salary for a family?
Many of the same principles apply above on whether $52000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child.
That means that amount of money is coming out of the income that you earned.
So, the question really remains can you provide a good life for your family making $52,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Your lifestyle choices.
You can live comfortably as a family on this salary, but you will not be able to afford everything.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 52,000 per year, then the combined income for the household would be $104,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on $52000 Per Year?
As we outlined earlier in the post, $52,000 a year:
$25.00 Per Hour
$200-250 Per Day (depending on length of day worked)
$1000 Per Week
$1000 Per Biweekly
$4333 Per Month
Next up is making $55000 a year.
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than in Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 43,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and still making under $45K, then you probably need to look at asking for pay increases, pick up a second job, or find a different career path.
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Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
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Something amazing has happened in the past eighteen months. While I’ve been learning about personal finance — and sharing my knowledge with you — Get Rich Slowly has grown from a small site with a couple hundred readers into a real-life business. GRS currently has 35,000 subscribers and generates $5,000 in monthly revenue. It also takes most of my time. This is a blessing and a curse.
The Blessing
As my income from this site has grown, I’ve been able to achieve my financial goals more quickly. In two weeks, I’ll be debt-free except for the mortgage. I have an emergency fund. I’m maxing out my Roth IRA every year. Get Rich Slowly has also put me in touch with a lot of great people: readers, colleagues, and media contacts. Most of all, I’ve learned tons about personal finance. I’m still a novice when it comes to investing and retirement planning, but I’m a novice who knows how to find the information he needs, and who is willing to share it with others.
The Curse
As wonderful as this site has been to me, it’s not without its drawbacks. Chief among these is that it takes time. Kris and I used to do more things together. I used to have spare time to read books and to play games and to hang out with my friends. Though I still do these things whenever possible, more of my time is devoted to providing quality content. Writing Get Rich Slowly is literally like having a second full-time job.
The Decision
After months of deliberation, I’ve decided to quit my job at the family business.
Yes, having two sources of income provides a tremendous sense of security, but I cannot continue at this pace. Lately I’ve struggled to squeeze Get Rich Slowly into the cracks of life: evenings, weekends, down-time at the box factory. As the site has grown, so has the workload. In order to make Get Rich Slowly everything I want it to be, in order to provide the best personal finance information, this site must be my top priority.
Quitting the day job scares me. My web income can support my lifestyle, especially if I’m frugal. But I had developed grand plans of accelerated savings, of paying off my mortgage in just a few years, of traveling around the world. When I quit the day job, I’ll be sacrificing:
The second income.
An additional retirement plan (about $5,000/year).
Daily contact with co-workers and colleagues.
I’ll be trading these sure things for an uncertain future. What guarantee do I have that Get Rich Slowly can continue to produce enough income to support me? What guarantee do I have that I’ll still want to do this three years from now? There are no guarantees.
The Plan
And so I am making a leap of faith. Or, more precisely, several “hops of faith”. In order to provide myself and the business a smooth transition, I’m going to reduce my hours gradually over the coming year.
Beginning 01 January 2008, my Tuesdays will be spent working on Get Rich Slowly.
Beginning April 1st, I’ll drop Thursdays at the box factory.
On July 1st, Mondays will be spent writing.
Next October, I’ll be down to only Wednesdays at the day job.
Finally, on 01 January 2009, I will be an official real-life full-time blogger.
I’ve always wanted to be a professional writer. I just thought I’d write science fiction novels. Or the sorts of short stories you find in Harper’s and The New Yorker. I never imagined I would one day make my living by writing about personal finance.
The Preparation
Now that I’ve committed to taking this leap, I’m scared. I’ve become a master of the worst-case scenario. Yes, Get Rich Slowly has generated enough revenue to support me during the past few months, but what if something goes wrong? What if I run out of things to write? What if Google or FeedBurner cancel their ad programs? What if I lose my thumbs in a blogging accident? What if all these things happen at once?
I’ve had people ask me how to prepare for a potential job loss, or how to make the transition to self-employment. My answers have always been theoretical. Now that I’m facing this situation myself, however, I can tell you the sorts of preparations I made. I think all of these are important:
Crunch the numbers. There are many good reasons to track every penny you spend — potential job loss is one of them. Sit down and go over your records. How much do you spend on food every month? What do you spend on utilities? What could you sacrifice if needed? Run the numbers for a variety of “what if?” scenarios. I’m fortunate to have health insurance through Kris’ job — if I didn’t, the numbers tell me I couldn’t make this leap yet.
Manage your money. You should always be smart with your finances. But when you’ve lost your job, or are about to make a career change, this becomes even more important. I can’t imagine making the move to full-time writer if I wasn’t debt-free (except for the mortgage). If I still had spending problems, this transition would be even more frightening.
Embrace frugality. I’ve done a great job of developing frugal habits over the past two years. I need to maintain these. I need to make use of the library. I need to walk and bike on my errands instead of driving. I need to follow the tips I share with you.
Kill the lifestyle inflation. As my debt-free date approaches, I’ve begun to loosen the grip I’ve had on my spending. We’ve been dining out more often. I’ve been buying toys and gadgets. I had even begun planning to purchase expensive furniture for the living room. All of this needs to stop now.
Bolster the emergency fund. I’m generally an advocate of smaller emergency funds — $500, $1000, $5000. But as I consider my upcoming transition to full-time blogging, I’ve realized I want to have more in savings. Much more. Though it seems like an impossible goal, I’m going to strive to save $20,000 by the end of 2008. (My mind boggles just to type that number.)
Seek professional advice. Consult with an accountant, and maybe even an attorney. There are tax and legal implications that come with starting your own business. Take the time to speak with somebody who knows the rules. Get things right from the start.
Pursue multiple streams of income. Most people have a single stream of income — their job. The more income streams you have, though, the more secure you are. My current situation is a perfect example. When I leave my job at the box factory, I need to pursue other income sources as well. I might consider a part-time job. I might pursue computer consulting work. More likely, however, I’ll start additional web sites (such as Get Fit Slowly, which I hope to have ready for launch by the first of the year). The more sources of income I have, the safer I’ll feel.
Define goals. It’s always good to know which direction you’re headed. In the face of an uncertain future, this becomes even more important. I’ve thought a lot about this lately. Where will I be in five years? In ten? In twenty? I need to decide what my objectives are, and be sure that my other choices align with these.
Focus on what’s important. Because I’m placing all of my faith behind this web site, I need to work to make it the best it can be. I need to provide more useful information, offer more tips, help readers find more answers.
The moment I decided to quit my day job, my entire mindset about money changed. It was as if somebody had thrown a switch in my brain. It’s more important than ever to practice what I preach. I’ve entered Ultra-Frugality Mode. I sat down the other day and crafted a new spending plan. I listed exactly what my monthly obligations are, and what my expected income is. The surplus is earmarked to boost my emergency fund as high as it can go.
It feels good to know that I’ve made some smart money decisions over the past eighteen months. These now serve as a sort of safety net. I don’t have a lot of fixed monthly expenses. I’ve eliminated my debt. I’ve developed the saving habit. These things will help me as I make the transition to working on my own.
The Dream
This decision has been difficult. The box factory is a safe, comfortable environment. It’s a sure thing. By leaving the business, I’m sacrificing stability.
On the other hand, I have to consider what I’m gaining: time. I’m going to gain time to exercise, time to actually respond to e-mail, time to research more extensive articles, time to begin writing the book I’ve had in mind for the past year. I’m going to have a chance to live the pastoral lifestyle I’ve always dreamed of.
I’m finally following some of my own advice: I’ve gathered the guts to pursue my dream. I’m glad to have you along for the ride.
Edit: In the comments, I answer the question, “How much time does running this blog really take?“
On April 1st, I got an unpleasant surprise, and it wasn’t an April Fools joke or gag. I found out that one of our renters didn’t have enough money to pay all of his rent.
Since nothing like this has ever happened before, I was definitely caught off guard. Still, it wasn’t the end of the world. Since I pay all of our mortgages ahead of schedule, waiting a few weeks for payment wasn’t going to affect my bottom line. And after talking with my tenant, I agreed to accept partial rent on the 1st and the rest of the money on the 17th of April.
I usually wouldn’t make such a big exception. However, this particular tenant is a responsible man who treats our property with incredible respect and care, even going as far as fertilizing and edging the lawn. Since he and his wife have lived in my property for four years and never paid late, I was more than willing to break the rules just this once without giving them any grief. No big deal.
But once our tenant left, my usually frugal husband, Greg, had an idea that shocked me. “We should just let him mow our grass this summer and forget about the $400 he owes.” Our renter did work in landscaping, after all, and he had expressed interest in mowing our yard in the past. However, I wasn’t fully sold on the idea.
We aren’t saving extremists by any means, but we’ve always been the kind of people who do everything ourselves. We clean our own house, do our own yard work, and manage our own rental properties. Greg does our taxes and accounting and I even color my own hair. We rarely farm out any of our responsibilities, and we have saved a lot of money by choosing to be self-sufficient. In fact, that is basically how we dug ourselves out of debt. Some of our first steps toward a healthier financial situation included cutting out unnecessary services and becoming more self-reliant. Since adopting a frugal lifestyle is what got us where we are today, I was extremely hesitant to hire out any of our responsibilities. It seemed like a giant failure on our part and I felt like we were taking a step in the wrong direction.
An unsustainable future
Still, trying to do everything ourselves can sometimes take its toll. A few weeks ago, Kristin Wong wrote a post about being a workaholic, and I could definitely relate. Greg and I both work full-time and have various side hustles and freelance writing gigs. We also have two small children that require a lot of energy and care. For the past year, we have easily worked 55-65 hours or more per week, in addition to doing all of our household chores and being parents. It’s been great for our pocketbook, but it has been extremely hard to maintain a high level of productivity at work and keep everything else running smoothly.
Occasionally, something has had to give. And to the likely disdain of our neighbors, that something has usually been our yard. Last year, we were unable to find time to mow on several occasions, and the result was that our home stuck out terribly on our quiet street of beautifully manicured lawns. Whenever that happened, we were stressed out and overwhelmed until we finally found time to get the job done.
Is a reasonable amount of lifestyle inflation okay?
Considering the circumstances, paying someone to mow our grass started to sound amazing. But, would that really be a responsible decision? Or would we just be giving in to the chief sin of frugality: lifestyle inflation? My husband assured me that this arrangement would work out great for everyone involved. Our tenant wouldn’t owe us the rest of his rent for the month, and in turn, we would have an entire warm season free from yard work. He reasoned that we just cannot keep working so hard without burning out. And, as usual, he had a point.
“It’s time to stop trying to do everything ourselves. We need to find a way to have more free time or we will eventually go crazy.”
He spoke the truth. Aside from vacation, we haven’t had much free time in the past few years. We had been working so hard, had paid off all of our debts, and were able to secure various streams of income. However, we were running short on time to get anything else done. And while working hard wasn’t a problem in itself, the hours we were putting in meant that our other responsibilities were often neglected. Nevertheless, I didn’t want to get carried away by our new penchant for lifestyle inflation. It was important to determine what we really wanted to hire someone to do, and what we would continue to do ourselves.
My husband made another thoughtful suggestion, “let’s just do the math and see if it really makes sense.” So we did. Our tenant currently owed us $400, and we figured that we probably mowed our grass fifteen times last year. That works out to about $25 per mow. And since it typically takes either of us about two hours to get our yard mowed, we would only be paying $12.50 per hour to buy our time back. Looking at the numbers from that perspective made me feel completely different. Was it worth it to pay someone $12.50 an hour to complete a task that we could rarely find time to do? Without a doubt.
We decided to call our tenant and see if he would agree to our suggested arrangement. He was thrilled to have the opportunity, and I was relieved that we would have summer free of yard work after all. And even though my husband suggested that we also hire someone to clean our house, I’m still mulling that suggestion over. I’m just not willing to make several changes at once, and I don’t want to end up paying someone to do everything.
A healthy dose of lifestyle inflation
Even though I was feeling like a failure for not being able to do everything, I am learning to accept that fact that it may make sense to occasionally hire help. And the truth is, I used to clean houses in my early twenties, and the people I cleaned for weren’t lazy at all. They were busy. They knew that their time had become worth more than what they were paying me to clean their home, and I now realize that they were wise to delegate those responsibilities.
In the end, we decided to do what felt right. And since we are finally debt free and starting to earn more, it was time to start reevaluating the way we have been living. Time is our most precious asset, and we needed to spend more time living instead of always cramming in as much productivity as possible. It’s become against my nature to pay for services, but I’m coming around, slowly but surely. And this summer, when my kids are playing in the dirt and I’m enjoying the last hours of the evening, I’ll probably wonder if the money was worth it. I can only hope that the answer is yes.
Do you do everything yourself? Or do you hire out certain responsibilities? What factors do you take into consideration when making those decisions?
In 1978, Don Lancaster — a computer and electronics geek — published a book called The Incredible Secret Money Machine. Though the title smacks of get-rich-quick schemes, The Incredible Secret Money Machine is really about starting and running a small business.
To Lancaster, a “money machine” is any venture that generates “nickels”. Nickels are small streams of revenue from individual customers. If your goal is simply to earn a comfortable income for yourself by doing something you love, then this book can help you explore the idea of business ownership. It’s not going to help you launch the next Google or Microsoft, though. Lancaster is all about nickels, not about dollars.
Getting Started
Lancaster says that in order to build a money machine, you must adhere to four basic beliefs. (Note that I’ve left his very-1970s language as-is.)
You have to be heavily into a technical or craft trip on a total lifestyle basis. “Your own trip has to be the absolute center of everything you do, everything you work with, and everything you believe in. Doing it has to be much more important to you than making money, more important than worrying about what people think, and more important than behaving, competing, or complying the way that other people think you should.”
You must want to stay in control. “For your money machine to work, you have to want to spend much of your time, energy, and effort improving both yourself and the general goodness of the technical or craft trip you are into.”
Your income goals should be just enough to keep going. “Getting filthy rich should be nowhere in your plans. So long as you can continue doing what you like in the direction you want to go, that’s all that should matter. The great irony of your incredible secret money machine is that the less you strive for income, the more of it will come your way, and, more importantly, the more you will be able to do with what you already have.”
Be gentle. “Your money machine should be forever small and decentralized. It should never compete head-on with others. It should complement and advance what others are doing. Your money machine’s products should genuinely help people at a fair or more-than-fair price, never being a rip-off either to suppliers or to customers.”
This isn’t the sort of advice I expect to get from a book about entrepreneurship. I expect to read grand promises, and glowing talk of profits to come. I expect money to be the object. Money isn’t the object with Lancaster. It’s one of the goals, to be sure, but it’s more important to create a “lifestyle business”, one that you enjoy and want to pursue.
Tips for Building a Money Machine
But how do you do build your own money machine? What’s the best way to start the stream of nickels? And how do you keep them coming? Though The Incredible Secret Money Machine is only 160 pages long, it’s packed with strategies and tactics for building a successful business, including:
Have as many different sources of income as possible. By this Lancaster doesn’t mean you should work multiple jobs — he means that you should have as many customers as possible. It’s better to have 1,000 people each giving you a nickel a month than it is to have one person giving you $50 a month. If that one person decides to spend $50/month elsewhere, you’re in trouble. But if even 100 people stop paying their nickel, you’ll still earn $45/month.
Have complementary sources of income. Another way to keep your cash flow strong is to operate two money machines. Many entrepreneurs I’ve known have done this. I have a friend who is a published novelist; in his spare time, he also takes on free-lance writing projects. My aunt baked wedding cakes, did catering, and was a professional photographer. My wellness coach doesn’t just counsel clients about physical fitness, but she also does stage entertainment.
Deal directly with the customer. If you write a book and publish it traditionally, for example, there’s an entire industry designed to suck the profit out of the process before you get your nickels. Instead, content yourself with fewer sales at a higher margin by dealing directly with the customer.
Work toward deferred income. “What you do for your money machine should generate nickels both today and tomorrow,” Lancaster writes.
You should work toward automatically generating yourself a long stream of future nickels that needs little or no more attention from you. This is admittedly very tricky to do, but if you can pull this off, your money machine will fly by itself, freeing you in the future to do bigger and better things.
An obvious way to generate residual income is to assure you have satisfied customers. Satisfied customers come back for more, and they tell their friends about your services.
Know the difference between cold cash, imaginary money, and megabucks. Megabucks are the big jackpots you get from writing a bestseller, from winning the lottery, from inventing the next Rubik’s Cube. Megabucks can make your rich, but the odds are basically zilch that you’ll ever find them. Imaginary money is the kind you dream about: “If I’m able to sell my Thneed to Wal-Mart, I’ll be set!” Imaginary money doesn’t exist. It’s potential money contingent on a lot of things. Lancaster encourages readers to focus on cash: “Cold cash is what you get when you supply a quality product to a known bunch of customers at a bargain price. It is the only type of income your money machine should seek.”
Separate frugality from stupidity. Know when you can cut corners to reduce costs, and know when it’s important to pay for quality. (And always be sure that you deliver quality to your customers.)
Avoid psychic energy sinks. Anything that distracts you from your purpose is a psychic energy sink. Lancaster decries television as a prominent energy sink. But he warns that debt, divorce, and anything else that produces “bad vibes” should be avoided. Stay positive. Stay focused.
These are just a few of the strategies and tactics Lancaster shares in The Incredible Secret Money Machine. You won’t find the specific details necessary to start a business here. The book doesn’t give step-by-step instructions for how to form a partnership, or how to publicize your product, etc. Instead, it’s filled with broad ideas and suggestions. Some of them are out-dated. All of them are enhanced by (or suffer from) Lancaster’s brash style.
A Real-Life Money Machine
As I was reading The Incredible Secret Money Machine, it reminded me of another book I’d read recently. In John T. Reed’s How to Write, Publish, and Sell Your Own How-To Book, the author describes his “money machine” at length (though he never calls it that).
Reed has self-published over 70 how-to books. He actively sells more than 30 of them from his web site. This gives him 30+ different sources of income.
He writes about four different subjects — real-estate investing, coaching youth sports, success, and self-publishing. This gives him four complementary audiences.
Reed deals directly with customers instead of with book distributors. This gives him many sources of nickels instead of just one or two sources of dollars.
His books give him deferred income. They keep producing income year after year.
Reed’s book business seems to embody the “money machine” philosophy. I’m glad to have read his Self-Publishing book at roughly the same time that I read Lancaster’s Money Machine — the latter provides the Big Picture, while the former looks at nuts and bolts.
Conclusion
Some of the advice in The Incredible Secret Money Machine (believe in biorhythms!) now seems quaint, 30 years after the book was published. (Lancaster produced a revision in 1991, but I haven’t read it.) The author’s “hip” language and many of his examples are outdated. But smart readers can extrapolate, and still learn a lot. You have to be able to read Lancaster’s advice on letterhead, for example, and think of it as advice for web sites.
Although Lancaster believes that you must be into your money machine on a total lifestyle basis, I’m not sure that’s true. I think you can have a part-time money machine. A full-time money machine will be more profitable, of course, but a part-time money machine is a great way to start. (Get Rich Slowly has been a part-time money machine for me, for example.)
Finding the Book
This book can be expensive and hard to find — it’s an underground classic. My county library system doesn’t have it. I bought my copy for $15 from Powell’s. Amazon currently has seven copies under $10. In theory, you can order the revised edition from the author’s web site. I’m going to give it a shot, but I’m wary — the site looks as if it hasn’t been updated in ten years. (You can take a sneak peek at the second edition in this PDF from Lancaster’s site.)
Over the past eight years I have been buying and selling items on Irfanview (Windows only, Mac users can use iPhoto). Once open, go to Image > Resize / Resample and click the 800×600 option, then OK. Save these to a new location. Since eBay only gives you one photo for free, use a free web photo hosting solution for the other images to be listed in your auction. Some of these sites are:
They all provide code to place them into eBay auctions and are free to use. I’ve been using xs.to for sometime and never had a problem. Simple and straight forward.
Spell Check
Take two minutes and reread what you wrote, make sure it makes sense and there are no spelling errors. Not only will this make the auction more valid for your potential buyer, it is the right thing to do.
Explain Shipping & Handling Fees Up Front
When listing your auction, eBay has the boxes you can use for shipping, flat rate, by weight, etc. I think it is also worth listing in the auction itself what the shipping & handling fees are, where you will and won’t ship to, what the insurance options are, etc.
My experience is that buyers prefer flat rate shipping, so you will need to determine what your item weighs packed up and what the rate is from who you will use as a shipper (UPS, USPS, FedEx, etc.). I usually add $1-4 to that to cover my costs of the box, packing material and gas to drive to where I’m mailing it from. Insurance is an option in the listing process, you the seller decide if you want to make it required, optional or not available. I usually use the optional portion, 50% of the time the buyer will want it, and the other half they won’t.
Create a Disclaimer
At the bottom of all my auctions I use something similar to the following:
I have listed this item to the best of my ability. If you have any questions, please contact me with at least 24 hours prior to the auction ending so I may reply to them. Payment is expected within three days of the auction ending, PayPal is the preferred method. The item will be shipped within one business day after payment has been received. Insurance is optional, however it is recommended. Please leave positive feedback for me when the item arrives, I will do the same for after you have left feedback for me. If for some reason there is an issue with the item when it arrives, please contact me ASAP to address it.
Reply to All Questions in a Timely Manner
Common sense here folks. Don’t list an item and go on vacation. Do check your email and eBay account at least twice a day to look for questions. Reply to them in a timely manner and address each question to the best of your ability.
Ship Fast
If you can, ship an item the day of payment or the following day. This will help build a positive feedback rating for you as a fast shipper, something a lot of buyers look for. No one wants to pay for something on Monday to find out it hasn’t shipped out till Friday. Take this into consideration when listing your item.
Use PayPal
PayPal allows instant payment and the ability for you the seller to receive credit card payments. By doing so, you have now enabled someone who may not have the cash to purchase your item to do so by putting it on their credit card. Additionally, it allows you to track payments and create shipping labels for both USPS and UPS. Using the built-in option for shipping labels will also send notification to the buyer that the item has shipped and what the tracking number is, one less thing you need to do. There are too many instances where checks and money orders bounce, get lost in the mail, etc. to make them worth while. Additionally, it adds time until the buyer receives their item.
Promote Your Auction
On any given day there are millions of items listed. Just having a clever title isn’t good enough anymore. You need to tell people you have an auction. Get on the social network of your choice and make a blog or bulletin post announcing your auctions. Don’t go around spamming people, but once when you list the auction and another the day before the auction ends can help drive extra traffic to your auctions.
Lastly, build relationships. Use the feedback options on all auctions, making sure to emphasize what the buyer has done right, using terms like fast payment or painless transaction. This will make you seem much more human and more buyers will want to deal with you. Should an issue arise, do everything in your power to resolve it as fast as possible.
Because of economic uncertainty, some companies have resorted to pay cuts to help cut costs. For the workers affected, it likely means scouring their budgets to trim some of their expenses. Taking a pay cut means facing the reality of no longer living the same financial life.
If you’ve just taken a pay cut — or you’re worried that you might soon be facing one — here are four strategies to handle your finances after your salary is reduced.
1. Update Your Budget
First and foremost, create a budget if you don’t already have one. List all your expenses for weekly purchases, from groceries to gasoline and parking fees. Add monthly bills, including rent or mortgage, car loan, streaming services or cable, cellphone, utility bills, credit cards, student loans, and any other debt such as personal loans.
Next, examine all your expenses to see which ones you can lower or eliminate for the next six months. Add your income and include part-time jobs or side hustles, tax refunds, bonuses, and any child support or alimony. This will help you determine how much money you can spend for necessities, expenses, entertainment, and other things such as doctor visits.
In addition to a budget, create a plan for both short-term financial goals and long-term goals. A plan will help you determine when you can pay off any loans and how much you want to save for something like a down payment on a house.
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2. Track Your Spending
You could use a free money tracking app that can help you keep tabs on your spending and help manage your debt. To track your spending, decide if you want to track it daily, weekly, or biweekly. You might try different time periods before you decide on one.
After you track your spending for two or three months, you’ll see a pattern emerge that indicates where most of your money goes.
3. Cut Expenses
One place many consumers can cut costs is from entertainment, such as their streaming services. These can really add up. Canceling all or some of these services can improve your cash flow, which is how much money you have left over at the end of the month.
Another place where you can slash expenses is from your food budget. Consider using digital coupons, shopping at warehouse clubs, or going out to eat for lunch instead of dinner to save money on food.
Your expenses include debt such as credit cards, student loans, and personal loans. Paying more than the minimum balance, refinancing to a lower interest rate. and making extra payments can help you pay down the loan sooner.
Consider refinancing your student loans by checking out both fixed and variable rates. Interest rates are at historic lows. You might be able to pay down your credit card bills faster by taking out a personal loan; those interest rates are often lower. And if that’s the case, the debt could be paid sooner.
Automating your finances can make your life easier. This will also help you avoid paying late fees. You can either have your bills paid automatically through your checking account or set yourself a reminder on your calendar if you have some bills such as utilities that are a different amount each month.
You can also automate your savings. You can have money taken out of your checking or savings account each month and have it automatically invested into your workplace 401(k) plan or an individual retirement account (IRA).
In addition, you could consider opening an online bank account with a high-yield APY. That way, your savings could earn money for you as it’s sitting in your account.
Ways to Save
When your salary has been slashed, there are several ways you can save money immediately and long term.
Call your mortgage, auto loan, utilities, credit card, and student loan companies to see if you can defer loan payments for several months. Skipping a few payments can help you get back on your feet sooner. If the company cannot provide this option, see if the interest rate can be lowered on, say, credit cards.
Check with your local nonprofit organizations. Many provide food or partial payments for utility bills. Look online to see if stores are offering deals. Stock up on staples such as beans, rice, and pasta if they are on sale.
If you are still short of money, you might consider talking to family members and friends about obtaining a short-term loan.
Now might be the time to use credit card rewards for cash, food, or gift cards.
People who have been saving credit card rewards for a vacation might want to go ahead and use them now. Some credit card companies will let you transfer the rewards for cash to your statement or use them for food delivery.
Other companies let you use your rewards to receive gift cards. Using these gift cards at retailers that sell staples and necessities such as food, detergent, and other personal items can help you spend less money.
Many credit cards will give cash back on purchases such as food and gasoline. See which credit cards are the most beneficial for your financial needs before signing up for a brand-new credit card.
Another way to save money is to use cash for gasoline. Some gas stations offer a cheaper price for consumers who use cash. The savings can add up quickly, especially if you have a longer commute.
Finally, each month, look for other ways you can save money. If your credit card company denied your request last month to lower your interest rate, try calling again. Rules can change often.
4. Save for Retirement
While you could skip saving for retirement, it’s ideal to continue socking away some money each month from your paycheck into a 401(k) plan or IRA. The money you stash away for retirement can lower your taxable income, meaning you’ll owe the IRS less.
Continuing to save money for retirement is a good habit, especially if your salary reduction is temporary. Once you stop contributing to a retirement account, it can be difficult to catch up on your retirement savings. If you have your retirement contribution automatically deducted from your checking or savings account, saving for your future is easier.
The Takeaway
While it can be difficult to navigate a pay cut, creating a budget, tracking your spending, shopping for deals, and cutting expenses can help you save and get through a tough time.
In addition, opening a new savings account could help you maximize your money. With SoFi Checking and Savings you’ll earn a competitive APY and pay no account fees.
See how SoFi Checking and Savings can help your money do more.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. SOBK0523015U
Are you looking for a way to earn some extra money? Did you do well in school, or on standardized tests? Offering tutoring services may be a good bet for you.
I’ve been a private tutor for the better part of seven years now. It kept me in spending money as a part-time job in college, and it has turned into a full-time gig for me over the last few years. The best part about it, though, is that it’s an easy concern to keep going whether you have three or thirty hours a week to devote to it.
What to Tutor
I’ve taught everything from high school writing to college calculus to professional certification exams for public school teachers. That’s just the tip of the iceberg: there’s a market for tutors for every standardized test in existence, and probably every academic subject at every level, too. Heck, much of this article probably applies to things like music lessons, as well.
If you have a strong academic background, but aren’t comfortable opening for business without some kind of certification, it might be worth taking a job with a tutoring service, particularly one of the big-name test prep companies such as Kaplan or The Princeton Review. They’ll train you, you’ll get valuable in-class experience, and after a few months you may feel better about setting off on your own.
Finding Students
The standard advice for would-be tutors is to post flyers at strategic locations such as universities. In my experience, though, that doesn’t work.
Ideally, your business would come via word of mouth. Every time you work with a student, make sure they have your contact information, and encourage them to tell their friends about you. The less effort it takes to get business, the better!
Starting out, though, referrals will be hard to come by. (That doesn’t mean you shouldn’t try: family and friends may be able to help out early on by spreading the word.) The easiest way to reach prospective students is through Craigslist. Better yet, set up a simple website in addition to your Craiglist ads so that you appear to be more than some guy or gal with an e-mail address.
Ultimately, though, Craigslist is just the 21st-century version of flyering the local university. The best way to find students is to go to the source. If you’d like to help elementary school children with reading, introduce yourself at the local elementary school. Teachers and counselors are the absolute best source of referrals for K-12 students.
Nuts and Bolts
The most important operational question you’ll face is how to set your rates. At the high end, you’ll find SAT, LSAT, and GMAT tutors in New York City charging several hundred dollars per hour. The range is huge: Even in New York, for the same services, you’ll find other tutors for as little as $20 or $25 per hour.
As with most services, acceptable rates are tied to the level to expertise you bring to the table.If you’re offering math tutoring for junior high students, don’t expect to command $50 per hour: High school students can do the same thing, and they’d probably do it for a whole lot less. This is one reason to consider becoming a test-prep tutor through a major company: As soon as you finish training, you’ll have skills that set you apart from the vast majority of would-be instructors.
While it’s important to consider what the market will bear, it’s also crucial that you consider your time investment. One of the drawbacks of tutoring, compared to other part-time jobs, is that it can be difficult to string together more than an hour or two at a time. If you’re charging $20 per hour and driving across town to meet with a student for one hour, is it worth it?
One partial solution to that problem, at least once you’re working with multiple students, is to have people come to you. (Perhaps even for a discounted rate.) Before I found a shared office solution, I would set up shop at a Starbucks in Midtown Manhattan. It was convenient for my students, and on some weekends, I would tutor four students for two hours each, straight through from 9-5. One commute is much better than four!
Final Words
As I mentioned in the beginning, one of the benefits of tutoring as a side job is that there are no real minimum time requirements. It can turn into a full-time job, as well, but don’t count on that happening in short order. Be especially careful about the actual number of hours you’re spending: if you have a dozen students and you’re traveling to them, an 8-10 hour per week job can suck up quite a bit of time and expenses.
Warnings aside, there are plenty of benefits I haven’t mentioned. You’ll meet all sorts of people you never would otherwise, and you’ll help students meet goals they may not have reached without you. You’ll be your own boss, and hey — you might even have some fun!