A few years ago, I was asked to talk about “bad” income. Surprised at first, I looked at the center manager and politely asked, “you want me to talk about bad income? are you sure?” She nodded and handed me a PowerPoint presentation. I didn’t know how to address the topic at first because my target audience was non-English speakers and mostly SAHM, but I took the papers and drove home.
I decided to make it as simple as I could to at least convince them that success is real, savings are possible -even without a job- and to watch out for the bad income.
“Look,” I told them, “I know you are here to know how to make the most out of your paycheck -when you get one- the savings accounts, how to handle credit, and how to take care of your credit score, but guess what? My volunteer coordinator wants me to tell you all about bad income.”
They all laughed, and openly told me that money is money.
“Yes, and no. Because selling your old purse or your shoes on Craiglist gets you money but is not an income. But selling your crafts at the farmer’s market is”
Income is what you earn on your paycheck, assistance programs, or when you sell your crafts on a regular basis. A good income is when it has no strings attached and is something you can count on to pay the bills, any income that you can rely on is a good income.
But what happens when the money comes from credit cards, title loans, layaway, surveys for income? That is Bad Income!
Bad Income is the money you spent, and you didn’t earn, and now you have to pay back with interests. That is definitely a bad income.
Needless to say, the look in their faces was a mix of curiosity, disbelief, anger? Half of the attendees left, the other half looked at me trying to figure out what was I going to say next.
“Look, don’t kill the messenger,” I told them.
I get it, I’m a SAHM too, I don’t earn a penny, and yes, I’m always looking how to stretch the paycheck, but guess what? It is hard; it is challenging to stick to a budget when you have emergencies or the kids get sick, right? You need to go and use your credit cards a little bit more than usual.
Still, the problem is that these emergencies never go away when you have kids. There will always be the other project, a child sick at school that gets everyone sick, that birthday party that was a bit too much, the extra cupcakes, the new wine… I get it! (Especially the wine.)
And of course, there is the Black Friday, the BOGO, the coupon too good to pass, and we pay it with the credit card, we layaway the gifts, and we finance our new living room for the next 48 months… Been there, done that!
Permission to speak freely? We SAHM use bad income regularly and don’t even know it, at least I didn’t.
Truth is, Bad Income limits your possibilities to succeed, it ties you to interest rates and endless monthly fees, you get used to them, and guess what? Too much credit takes away the possibility for savings because it shrinks your real income, your good income.
The question is: If I don’t have a job, how can you cover such emergencies? How can you have an income?
I took a glance at my small audience, turned off the PowerPoint, grabbed my coffee, and calmly pulled a chair to the front of the room.
“Look, I know it can be done. It is hard at the beginning. Still, once you make a habit out of it, you have enough savings to stop worrying about emergencies. Here are my two cents.”
Before I came to the United States, I was a working mom. Because of the immigration process, I couldn’t work until my green card was approved and then my citizenship. Thus I’m a SAHM, unemployed, and on a single income.
I have a way to stretch my budget, and I know coupons are not considered income but bear with me for a second or two.
How I keep my weekly budget on track.
- I brew my own coffee, I don’t drink Starbucks.
- I do my meal planning with my supermarket app (HEB and Kroger’s)
- I buy bulk on non-perishables only when they are on discount.
- I Skip the BOGO and the B2G1 free, If I only need one, why do I have to pay for an extra to get an offer? It doesn’t make sense to me.
- School lunches are tricky, I ask the kids what they want to eat or buy, I hate wasting food.
How I start making savings
- I make a weekly budget, and I stick to it!
- At the end of the week, I check how much I saved (budget v expenses), and I transfer the difference to my savings account.
How I Get the Good Stuff for Free
- I only use credit cards that give cashback and/or rewards
- Use Credit Cards by the calendar: Amazon Credit Card from January to May, and I save all the points to pay for all the back to school supplies, American Express from June to December. I get all the rewards for Summer vacations.
- United Airlines Credit Card, my husband, uses it all year long, and we save all the rewards for Winter (Hello Disneyworld!).
How I make extra cash
- I have made crafts and sold them at the farmer’s market or directly to my friends.
- Listed old purses, toys and shoes on Craiglist, or Facebook groups.
- Got a work-at-home job making transcriptions and translations.
Surprisingly enough, my small audience got a bit bigger at the end of my coffee talk, I guess when you talk with your heart, it always ends up better than expected.
Still, the questions remain: How do you make extra money? What else can be done to have a good income?