14 Tips for Gaining Financial Security and Independence

I recently read that more than 64% of people in the United States alone are living paycheck-to-paycheck. That means that 64% of Americans are literally one flat tire away from being unable to pay their rent or their mortgage, and a layoff away from financial ruin. I’m fortunate to have developed financial savvy during my life, and while this is a bit of a departure for 3Sixty Insights, I wanted to share some advice to help others gain a level of security. Learning these fundamentals has given me the financial freedom to do things that those 64% of people couldn’t even fathom, like quit a job without a replacement lined up, or start a business. My hope is that by sharing what I have learned over time, I might be able to give some who are living paycheck-to-paycheck a little breathing room!

• Don’t spend beyond your means: This may sound like common sense, but it’s probably the mistake that gets people in the most trouble. Any purchases—whether clothing, cars, homes, or something else—that stretch a person to live paycheck-to-paycheck are a recipe for disaster. Review your spending habits and forego the “nice-to-have” items that might stretch you a little too far! Before making your next purchase, ask yourself, “do I really need this?” Or simply do the math to understand the impact of that expense on your ability to comfortably afford essentials.
• Have enough savings to last through hard times: So if you’re not spending every dollar you make, what are you doing with them? Make it a point to put something aside from every paycheck if possible. Even a seemingly insignificant amount like $10 from each check will add up over time. Create a goal to have enough in savings to cover unforeseen financial demands such as car or home troubles, or a potential loss of income. A good rule of thumb is to build up three to six months of take-home pay in an emergency fund.
• Maximize your cash on hand: Making your money work for you doesn’t have to be as complicated—or as risky—as day trading on the stock market. Something as simple as setting up a high-yield savings account can really make a difference. Traditional savings accounts through banks such as Bank of America or Citizens have interest rates so low that even placing $100,000 with them will bring in less than $1 in interest per month. Compare that with a high-interest account through an organization such as Synchrony, and with the same balance, you’d be looking at more like $225+ per month coming in. Which would you prefer?
• Reap credit card rewards: Who wouldn’t want free money? Well, credit card companies are so eager to compete with one another that they will literally offer you free money to spend with them. I myself use an Amazon Prime card for almost all of my family’s purchases (we use it like a debit card). The card currently offers 5% cash back on Amazon purchases, 2% on gas & food, and 1% on everything else. This is real money that can be used on Amazon or redeemed as cash back to purchase anything from groceries to home essentials to discretionary items. The key here is to be absolutely certain you are able to pay off your balance monthly. The interest rates are so high that the minute you begin to carry a balance, you can forget about that free money!
• Avoid credit card balances: Avoid keeping a credit card balance at all costs. In short, if you can cover a payment for something with the cash you have on hand, don’t let it sit as an owed amount on credit. Interest rates are ridiculously high for most credit cards, and those fees are just not worth it. Yes, I recommend above that you use your card as often as you can, but again, it’s critical that you pay it off in full each and every month. The only time you should ever carry a balance is if you absolutely must—and it’s precisely to avoid this that you want to build up an emergency fund.
• Take advantage of 0% financing: Have a big expense coming up? Check to see if the provider offers 0% financing. Many businesses do these days, and it represents a great opportunity to keep your money earning interest in that high-yield savings account a little longer while the vendor or lender shoulders the burden. The trick with these offers is to ensure you understand and meet any payment deadlines that are part of the terms. In a typical agreement, if you miss just one deadline, the company can hit you with all the interest you would have had to pay from the beginning, as if the 0% financing option had never existed. And, let me tell you, those interest rates can be astronomical!
• Leverage 0% balance transfers: If you do find yourself carrying a credit card balance month after month, you can get in over your head very quickly. Interest rates are high on their own; compounding that with late fees and over-limit fees can cause a lot of trouble. Back in my early 20’s, I found myself in a position where I was paying $75 or more a month toward my credit card fees, and yet I never really seemed to make a dent in the actual amount I owed. A handy trick to break this vicious cycle is to find a credit card that offers 0% interest on balance transfers and load your bad debt onto that card. Again, the caveat is that you must ensure you comply with the specific payment terms. As long as you can do that, this is an easy way to ensure your money is going towards paying off your debt rather than right into the hands of the banks and credit card companies.
• Honey: Speaking of free money, Honey is an internet browser add-on that has saved me a ridiculous amount of money over the years. Below are just a few of the things it can do for you.
  • Amazon – When you shop on Amazon, Honey will show you if you are looking at the option with the best price. If you’re not, it will automatically swap your items for a better price with one click of a button. Honey shows pricing history up to 120 days out, so you can see if there was a recent price spike or dip and understand if you are paying the absolute best rate available. You can set up alerts so that you get an email if a certain item has dopped below a specific amount. Usage on Amazon alone makes this free plug-in extremely valuable.
  • Coupon Codes – Honey doesn’t just work with Amazon; it works with hundreds of sites, and upon checkout, it will automatically search all available discount codes to get you the best price available. Of course, if Honey doesn’t have a code to offer, you can always take a second to search Google for one. You never know what you might find.
  • Honey rewards – Honey has a good rewards program that will provide you with points for shopping at certain stores, and in some cases, they have negotiated specific cash-back rewards for purchases. It may not add up to a huge amount of money, but $50 in rewards that can be cashed out for a gift card here and there is certainly better than nothing.
• Rewards programs: Almost every business offers some type of rewards program in exchange for your loyalty these days, and to the savvy shopper, this is another opportunity for free money. McDonalds offer free items and 20% off coupons monthly, Cumberland Farms offers $.10 off every gallon of gas and two to three free drinks a month, our local Budget offers $10 in rewards for every $100 spent… over time, these rewards begin to add up, and they save you money as well!
• Renegotiate: Comcast, Verizon, SiriusXM Radio and others change their rates all the time, and as result, you may be eligible for a better rate. When I was with Comcast, they used to constantly change my rates, but I’d renegotiate every two years. That renegotiation of my contract typically saved me an average of $80 a month. And because I’m willing to make a phone call when necessary, I haven’t paid more than $10 a month for XM Radio in 10 years (and I average closer to $6 or $7 a month).
• Weatherproof and seal your home: Let’s face it, utility costs are at an all-time high, with no real relief in sight. A quick way to save some money is to weatherproof and seal your home. In some cases, old windows or doors could be so bad that you might as well have a baseball-sized hole in your home’s exterior walls. Spend some time on Google to find ways to weatherproof your home and you’ll be amazed at how much you could save. As an added bonus, look into solar and hot water on demand—there are some great incentives and cost savings associated with these providers. Sure, there is an upfront cost, but the long-term savings make it worthwhile. Again, where would you rather see that money: in your pocket, or in the utility company’s pocket?
• Look into K&N car air filters: Yes, K&N air filters are typically associated with “increased car performance,” but the reality is that they are actually a simple item that can help you save on gas milage. They are literally a drop-in item to your car that is guaranteed pretty much for life, saving you money both on filling up your tank and on replacing air filters. Every little bit helps, and since gas has been so expensive lately, you could call it more than a little bit these days!
• Avoid DoorDash, UberEats, and others: Yes, they may be convenient, but the fees these services charge are frankly ridiculous. In most cases, you are looking at anywhere from $10 to $15 per order in fees before you even account for the cost of the food and the tip. Dominos, for example, also stuffs in a $5 delivery fee. These costs add up quickly: Order just a few times a month and you are looking at close to $100 in avoidable spending.
• Avoid takeout for lunch and breakfast: Picking up a pre-made meal in the morning or midday may be super convenient, but it adds up, especially if you live in the city. When I was working in Boston, a simple breakfast sandwich and drink could cost up to $10, and lunch ran closer to $18… Avoiding these expenses by packing a meal can add up quickly in savings.

At the end of the day, it does take time, effort, and discipline to be financially savvy. But the reality is that if you are living paycheck-to-paycheck, the ramifications of not investing that time, effort, and discipline are worse. I personally follow the advice above, and doing so has truly allowed me to enjoy financial flexibility in my life.

Have any other great financial tips? We would love to hear them in the comments below.