I can’t wait for payday! Does that sound familiar? Statistically, over 70% of Americans struggle financially, living paycheck to paycheck, and that’s a startling number. Nobody wants to live paycheck to paycheck, and if you’re struggling, you’ve come to the right place.
Living paycheck to paycheck isn’t necessarily a bad thing if you have a paid-off home and a healthy emergency savings. But statistically, a quarter of Americans also don’t have any money saved for emergencies, so it even makes living paycheck to paycheck even more dangerous.
Let’s talk about ways you can stop living paycheck to paycheck and actually become the minority that prioritizes financial freedom!
1. Track your spending
The very first step you should take is to track your spending and see where all your money is going. This is called Setting up a budget! Have you ever gone through a month and thought to yourself “where did all my money go?” If you don’t track and pay attention to your spending, your money will seemingly disappear!
The process of tracking all your spending and documenting all of it will probably take a few months, but this is very critical that you do. It’s proven that once finances are documented, your paycheck will go further.
Check out the best personal finances apps that will help track your spending and finances.
2. Eliminate debt
Yes, this part is easier said than done, but this is one of if not the biggest reason people are drowning in bills and monthly expenses. Did you know Americans have $8,000 in debt and the total U.S consumer debt is hovering at $13.86 trillion? Trillion! With a T! That’s absolutely insane!
Getting credit cards and getting into debt is so incredibly simple that it should be a crime! Do yourself a favor and opt-out of all the pre-approval credit card mail, delete any credit card emails, and if you really want to escape this rat race, cut up your cards too!
If you are completely drowning in your credit cards then a good move would be to consolidate your cards into one manageable payment. Doing this isn’t a free pass to rack up more debt! So if you consolidate your cards, then you cut them up and never open another one.
3. Pay yourself first
First things first, paying yourself doesn’t mean spending money on yourself! It simply means that before you pay your expenses and go shopping, you set aside a certain amount into your savings or retirement first. To do this, you must have a budget in place first, then determine how much you can set aside every paycheck.
By paying yourself first, it makes sure that you’re prioritizing saving and forces you to spend less on unnecessary things. This will also help in building an emergency fund that’s absolutely critical to have. Life happens, and you don’t want it to happen when you have $0 in the bank. Guess what, you’ll have to get into debt to fix that car problem, or replace that broken sink.
4. Automate your expenses
Did you know that 25% of adults in the U.S don’t pay their bills on time? That’s 1 in 4. Paying your bills on time is more important than you think, and the consequences are bigger than people realize.
The average credit card bill is $35. And if you think about it, almost every, if not all bills, have a late bill associated with it. If you’re juggling multiple credit cards or accounts, it’s easy to forget one and as such get hit with late fees.
So consider using apps that track and remind you of upcoming bills, and you can even lower your bills by using apps that negotiate lower bills for you like Truebill.
5. Sell things you don’t need
Not only do things accumulate, but clutter clutters the mind. And it’s money just sitting on the table! Take a look at things you don’t use and don’t need, then consider getting rid of them by selling them! You get to make some extra cash doing it. Consider things like your clothes, jewelry, baby items that you don’t use anymore, and things like that! If you don’t need it or don’t use it, get rid of it!
6. Start a side hustle
If you’re living paycheck to paycheck, chances are you either trim your lifestyle or increase your income. Asking for a raise at your job will likely make a marginal difference, but if you start a second job or a side hustle, you can increase your monthly income substantially.
Some great ideas are things like driving for Lyft, driving for Uber, waiting tables, call center jobs, or any side job you can get yourself into. It might not be the most glamorous thing you can do, but it definitely helps with not living paycheck to paycheck anymore!
7. Live within your means
Nobody wants to lower their standards of living, but do you realize that you are the one that sets your own standards? It might be a house that’s too big, or clothes that are too expensive or even a car payment you can’t afford. All those things are living standards that can be cut down to be able to live within your means.
Lifestyle creep happens when you get a new job with higher pay, or you get raises over time. People are tempted to just spend more as they earn more, but instead make it a conscious effort not to do that! That way, you can save more, and get to save and invest for your future.
8. Learn to save up big purchases
Delayed gratification! Say it with me, delayed gratification!
That will change your life! Instead of walking into a store, seeing a cool new laptop and just impulse buying it with a credit card, go home and start saving for it. A $400 laptop can be bought after 4 months, saving $100 a month. That’s it!
9. Find someone to hold you accountable
This simple thing can really help you prioritize getting out of living paycheck to paycheck. I would recommend either working with an advisor, relative, spouse, or a close friend. Doing this will increase your chances of budgeting and controlling your spending, and in turn, help you save more each month.
This is why professionals like personal trainers and health nutrition specialists are very successful. The conscious reality of having someone you’re accountable to really helps.
10. Change your mindset
Last but not least, your mindset has a HUGE effect on how you perceive your situation and how you react to it. Changing to a saving mindset is going to take effort, and most importantly, it’s going to take time.
You get what you focus on in life, and if you focus on positivity and getting out of debt and in charge of your finances, you can achieve it. By deciding that you want financial freedom, all that’s left is taking it into action!
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