This is how Melissa is breaking the paycheck to paycheck cycle

This past Saturday morning I was moved by an incredible and inspiring story from Melissa.

I met Melissa in a personal finance community I’m a part of and I reached out to her to learn more about her financial journey and how she has been able to change the course of her personal finances. What she shared with me is truly amazing and it proves to me that ANYBODY can come out winning the way she is now; it all comes down to having the right mindset, the desire to improve your life and getting creative with savings strategies.

Here’s a little bit about Melissa. She’s 39 years old, has an 11 year old daughter and her husband unfortunately has health problems and is unable to work. She’s been living paycheck to paycheck, had no savings or emergency fund and is the sole bread winner of the family. On top of that, she had a 363 credit score which crippled her from being able to make any financial purchases like replacing her 21 year old car! Everyday she must have felt like she was living on edge hoping that no monkey wrench would be thrown into her life. Think about it, one unfortunate circumstance could be financially devastating.

So I asked Melissa, what made her realize that she needed to shift her financial mindset and what steps did she take to begin saving and investing? What you’ll read next are her own words.

Melissa’s Story

“I’ve been wanting to stop the paycheck to paycheck lifestyle for years. My daughter is 11, my husband is having health problems and my car is 21 years old. I knew I had to do something when I realized I had spent $1000 on the car by August of last year. So I started researching how to get out of the cycle.

Everyone suggested Dave Ramsey, but honestly, I just don’t like the guy. So I read everything I could about saving, investing etc. I got a new phone (I went from Windows to Android) which allowed me to download the Stash app that I had been eyeing for a few months. I actually got $10 to start with because I got the $5 from Stash and $5 from Mint, the financial app I started using in September.

I invested the $10 and I started to see a small return and it became addicting. So instead of spending money on whatever, I’d use that money to invest. It became like a game. Then my car broke down yet again, and my mechanic said “you know eventually you’ll have to get a new one” and I cried (I love my car) but I knew he was right. But my Credit score was like 363. I had old debts on my credit, and one credit card still open but 5 months behind.

If I wanted to buy a car, I had to get my score up. So I did some research on the best way to raise my score quickly. My credit card was through Capital One, and they sent me a letter in October (right after I started Stashing) saying that if I paid $47 by my next due date, it would prevent further collection activity. So I did. I got another letter the next month saying the same thing, but they had increased the amount by $10. So I paid the $57. I figured I could keep paying $57 comfortably, so I paid it by the due date every month. In three months my score rose 60 points. I just got a letter saying next month I’ll have my charging privileges back because I just got the balance under my credit limit.

I checked my score yesterday and it had gone up another 80 points because my card showed as active and my utilization rate was no longer 100% of the balance, and a few hard inquiries had fallen off the report.

As for beginning to save money, the steps I took to start saving were using the money I would have spent on stuff like makeup or eBooks, stuff I didn’t need, and invested it instead. I realized how easy it was to do that, and I thought well why not start a fund for a new engine in my car which will hold me until I get my credit score where I want it.

Prior to all of this I was always over drafting my checking account and paying a lot of fees. Since I started saving and using Stash, I have not over drafted since! I turned off the overdraft protection with my bank and turning that off saved me quite a bit of money! I’ve also opened a Roth IRA account with Stash and next year I’m going to open a 401K through my job because I know I’m missing out on a lot of money!

Since doing all of this, I have over $400 in savings, my credit score is up 140 points, I got rid of overdraft protection, forcing me to be much more careful of my spending, and all on my own single income while supporting a family of 3 and all since October 2017. I honestly never thought it could be done, but Stash literally changed my thinking. If I can invest with just $5, I can save with just $5. That mind shift was literally life-changing.

So for everyone that is just starting out or you feel like that $10 isn’t enough to make a difference, it totally is!! Just be patient and diligent!!”

Wow…what more can I add???

What I admire about Melissa is that she is an incredible woman who is doing everything possible to support her family. She is the rock of that family and even through the circumstances they are in she still finds more energy and the desire to improve their finances for the sake of her daughter and to set up a retirement for her and her husband. As you have read, for many years she wanted to break the paycheck to paycheck cycle but didn’t know how and the fire finally ignited in her to do something about it!

motivation, confidence concept

No matter what your circumstances are, find the will and the desire to break the status quo and use financial apps to help you. Make this year the year of financial change!

Note: In case you were wondering, I received permission from Melissa to share her story with the community and the mentions of the financial apps, products, and services are not endorsements nor am I compensated for mentioning them. 
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4 thoughts on “This is how Melissa is breaking the paycheck to paycheck cycle

    1. Hey there! Yea, Dave Ramsey is not my cup of tea lol but he has tremendous following, so good for him. I met Melissa on a Facebook group for Stash users. We both use Stash for our ETF investments. There’s a great community of people who are in all stages of their financial journey. Great way to connect and to learn from others and their stories. Melissa is one of those great examples 😊

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      1. I wrote a post about Stash. Take a 👀 maybe it’ll create more interest for you! I’ve looked into Robinhood but ETFs are more of interest for me and the Stash app is great

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