The two broad category ways of reaching FI for any income is cutting expenses and increasing incoming while investing the difference. There are arguments for both, but again on any income, to optimize doing both of these things will help anyone reach FI sooner.
Cutting Expenses
Get Out of the Red – To get started you have to track your expenses and make sure you can pay your monthly bills. Your first absolute goal is to cut anything not essential or make drastic changes to be able to pay your bills. This may include moving, getting a roommate, lifestyle changes etc. ]
Keep track of your expenses for about 2-3 months before hitting the budget hard. Get an idea of where your money goes before you tell it where to go. To help budgeting there are many free tools. Use whichever you prefer, and if you don’t like one, try another after a month or two. Pen and paper, Excel spreadsheets, or digital apps are available depending on your preference.
Get Rid of Luxuries – This part kind of sucks but you need to scrutinize your spending. Get on a budget that works for you and see where you cut out expenses from the “four biggies” Transportation, Debt, Housing, Food.
Cut the Cord – Cancel cable subscriptions, streaming subscriptions, anything with a monthly payment that you are willing to find a cheaper alternative for or do without. Also look for a cheaper cell phone plan better suited to meet your needs. Check out articles for Google Fi, Republic Wireless, Ting, and other less expensive providers.
Negotiate interest rates and premiums. Look for better deals on insurance (auto, home, life, umbrella, all of your insurances), look into refinancing your housing, negotiate your cable bill if cutting the cord won’t work, and monthly premium costs like subscription boxes/packages.
If you’re eligible look into government assistance for grocery assistance, medical, transportation, and other high-end costs that you might be eligible. Every little bit helps.
Buy used – Check Goodwill and other thrift stores for clothing and home goods (and anything else). Find freebies, used buy and sell groups like Facebook and Craigslist and other sites.
Ask questions and talk to people. Meet our FI local group, listen to podcasts, and read books or listen to audiobooks. Many personal finance community members recommend a mentor. I second this. Mentoring is how many wealthy people continue to be wealthy. (Add link to resources page, mention services we offer/etc.)
Exchange services for services. Find apps that offer your skills in exchange for services you need. Try sites like Upwork and Fiverr for some freelance work as well.
Break bad habits – Practice handling your money better and stretching every dollar. Consider giving up your vices that eat away your money like lotto, smoking, the latte or other guilty pleasures. Find cheaper or free alternatives to reward yourself.
Increase Income
Get an emergency fund – the amount is arguable. Some say 3-6 months before debt and some say after. Save as much as you are comfortable with and can replace when things go awry. I personally use Dave Ramsey’s $1000 emergency fund and find it comfortable for my situation. Other’s recommended the cost of your largest deductible at a minimum.
Find cash alternatives – optimize your dollars using things like gift cards, rewards points, or Swagbucks. Answer online surveys and watch videos to earn gift cards that can replace cash expenses with.
Fund retirement accounts with a cashback rewards credit card or use rewards for cash or travel rewards.
Retirement Money as fun(d) money – Use “fun money” to invest in retirement goals.
Sell, Sell, Sell! Selling stuff around the house helps with the de-cluttering and promotes a minimalist lifestyle that works with your goals towards FI. Try “flipping ” things by selling them at higher prices such as things for Ebay or Amazon or even houses.
Catch side hustle syndrome – work a part-time job or use your skills to earn that extra income. Common side hustles are delivering pizza, babysitting, and dog walking. Google side hustles and get millions of results. There are so many bloggers with great side hustles. Try searching your favorite bloggers website to see what they suggest.
Get that OT baby! Build the emergency fund, pay down debt, and get that retirement fun(d) money. Take overtime as your health/time allows.
Job/Career change – Get scared, get mad and take the plunge. If you hate your job and don’t make enough money, be bold and research. Look at the next step toward the career change.
Investing/Real Estate/House hacking – investing will increase your income over the long haul. That compound really works when get in to the “grit years of FI.” Start early even with a little, but pay that debt so you can invest more earlier. Many in the FI community pay mortgages or make extra money renting out rooms or buying a house and renting half, using the cash flow to pay for the property. Also, some even “flip houses.”
Put your tax refund to use – it only comes once a year, but if your income is low and your credits come in, use that for your emergency fund, debt repayment, or invest it. Don’t spend it on things you don’t need!
Pay Yourself First – Set up automatic payments and pay tax to your future self. Automating savings and living on the rest will help set up your FI future.