Most working adults live paycheck to paycheck. That is approximately 76% middle class Americans. Why is that? Some say it is due to the struggling economy for one. The cost of basic necessities are not as affordable as it use to be and household incomes are not able to sustain the cost of living. Others say that the reason is that people cannot manage their money because of materialistic wants. Is it true that folks are still trying to keep up with the Joneses? Learn how to stop living paycheck to paycheck.
To stop living paycheck to paycheck is to track your spending and know exactly where your money is going. There should be a purpose for every dollar spent. Understand to overcome being “broke” a lifestyle change has to be made. It is essential to track your spending, so that current spending habits can be analyzed and a budget plan is created. Check out Mint or You Need a Budget (YNAB) for budgeting assistance.
Think of things that can assist you in reducing your spending; for example packing lunches throughout the work week, negotiate lowering the cost of bills (such as cable or insurance), cutting gym memberships, or stopping regular coffee stops. A cup of coffee from Starbucks can cost around $4 and change. If you are a coffee or latte drinker daily, it can add up quick weekly and in the end costing you over $1000 a year. Imagine using that money to pay off a bill or add it to your savings.
Another good idea to improve current financial situations is to boost your income. That means creating a second or third stream of income. The more the merrier…or rather the more is helpful. Do odd jobs that will bring in more money to help you reduce debt and increase savings. Establish a side hustle, get a part time job(s), sell items on eBay, or form a business. There is literally so much to choose from. Your options are unlimited. Just have a hard work ethic and strong will to make it happen.
Last, pay yourself first to break free of the shackles of living paycheck to paycheck. Set up a savings account, preferably an online savings account so that the money is not so readily available. Digit and Qapital are good choices for saving. Digit checks your spending patterns and moves a few dollars from your checking account at a time to your Digit account (based on if your spending patterns). Qaptial allows savers to choose goals, setup rules, and then triggers automatic transfers in your savings account. Saving help with unexpected situations and for an retiree’s future.
Make smarter choices with your money and stop living paycheck to paycheck together!