Ways to Avoid Living Paycheck to Paycheck
Living paycheck to paycheck can be extremely stressful. You are constantly walking a financial tightrope, waiting to get paid to be able to pay bills and buy groceries, and worried that one unexpected emergency will send everything crashing down. If you want to break free of the paycheck to paycheck cycle, it’s very important to do these three things:
Find Ways to Boost Your Income
It goes without saying that the more money you earn, the easier it will be to save, pay down debt, and escape the cycle of living paycheck to paycheck. Sit down with a notebook and pen and brainstorm some ways you can increase your income over the next six months. Are you overdo for a raise at work? Come up with a plan for approaching your boss. Other ideas include getting more training in order to nab a higher paying job in your field and starting a side hustle or freelancing on nights and weekends.
Once your income goes up, be shrewd about how you handle the increase. Avoid spending sprees, instead using the extra money to create a more secure financial situation for you and your family.
Create a Monthly Budget . . . and Stick to It
It’s hard to know where the problems in your expenses lie until you take a clear look at your finances and create a written budget. Your budget should include categories for routine expenses like rent, car payment, and groceries, as well as some wiggle room for emergencies. You can create a simple budget each month in an Excel sheet or even on a piece of paper, or go more high-tech with an app like Mint.
Once your budget is set up, it’s crucial to check in on it every few days and deduct every dollar you spend from the correct category. Just the simple act of budgeting can reduce your spending and help minimize that stressful paycheck to paycheck feeling.
Get Your Debt Under Control
High interest debt, especially credit cards, can make getting out from under your financial problems seem impossible. If you have more debt than you can manage, it’s time to sit down with a debt counselor and go over your options. Once your debt is under control, it will be so much easier to set aside money for emergency savings.
You don’t have to continue living paycheck to paycheck. Contact us today to have one of our coaches go over your situation and find practical ways to minimize your debt and improve your cash flow.