Get this: 76% of Americans are living paycheck to paycheck. That means that less than one-fourth of Americans have enough money saved up to cover their expenses should things go wrong. And let’s face it, things do go wrong. Maybe an unexpected medical emergency arises or your car breaks down…the point is that things happen. If you’re unprepared financially for an emergency, you could find yourself in a world of trouble.
Of course, these are trying times. The economy is still in recovery, but there are a lot of people struggling to get ahead financially. The good news is that living from paycheck to paycheck is avoidable in most situations. You just need to have a good plan in place to help build up your coffers.
Here are some powerful tips to help you stop living paycheck to paycheck.
Start saving right now—75% of Americans don’t have enough savings to cover their bills for six months. Look, saving money is hard when you have bills and you’re barely making enough money to cover them. But you have to start saving something. Save whatever you can, whenever you can. If it’s only a few dollars here and there, so be it. Just save something. One of the easiest ways to save is to set up automatic savings in your checking and saving account. You choose the amount you want pulled out of your checking and put into your savings every week, two weeks, or month, and your bank takes care of it automatically. You’ll be saving money without even thinking about it.
Analyze your spending closely—You might be saying, “I don’t waste any money. Everything I spend money on is absolutely necessary.” But is that really true? Almost everyone spends at least a little money unnecessarily. Maybe it’s on an occasional cup of coffee. Or maybe you’re spending money on groceries that end up getting wasted. Try tracking every penny you spend for a couple of weeks, and see where it’s all going. You will probably find some expenses that were unnecessary. This can help you adjust your spending habits so you can save more money moving forward.
Cut the luxuries—If you don’t have enough money for emergencies, you don’t have enough money for luxuries. That means you shouldn’t be spending money on things like cable TV, gym memberships, spa memberships, magazine subscriptions, etc. These aren’t necessities, and there are alternatives to each. You could subscribe to Netflix for a fraction of the cost of cable TV. You could work out from home (there are plenty of great videos online to guide you) instead of paying for a gym membership. Make smart trade-offs and little sacrifices, and it will make a big difference.
Create a budget—After you’ve scrutinized your spending carefully, you need to create a budget to guide your spending from here on out. Make a budget and stick to it. With a sound plan in place, you’ll start working your way out of the paycheck to paycheck cycle. It’s all about creating a smart plan and sticking with it. It’s going to take commitment, and it will take sacrifice. However, if you stick with it, you’ll see the improvements in your finances.
Work a little more—If you want financial freedom, you’re going to have to work for it. That’s not to say that you’re not working hard now, but climbing out of the financial pit might require you to work just a little bit harder. Maybe you take on more hours at your current job. Or maybe you pick up a part-time job on the side. Whatever you decide to do, the point is that you need to bring in more earnings.
But what if an emergency pops up now?
Haven’t had a chance to build up your savings and get on your feet financially yet? If an emergency expense arises, you do have options. You could:
Take out a loan from the bank
Take out a car title loan from a trusted provider like TitleMax
Borrow money from friends or family members
Sell unused items for extra cash
Do odd jobs that pay cash on the spot
Financial stability is something we all strive to achieve. Hopefully, the tips in this article will help you get closer to achieving your goals.
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