Whether you’re a self-confessed big spender or money just has a habit of filtering out of your bank account on a day-by-day basis, you’re probably all too familiar with how it feels to live paycheck-to-paycheck.
You might have tried on several occasions to get your finances in order – after all, we all reach a certain age where borrowing money off mom to tie us over until the next payday is unacceptable.
But it’s harder than it seems to break our age-old spending habits or find ways to cut back on our current expenses.
Saving money, like anything worth doing in life, takes some serious discipline.
Just like your kids need to try the latest flavor Oreo they spotted in Walmart, you need those genuinely essential groceries, plus the new herbal supplements that Gwyneth Paltrow’s been raving about, and that glass of wine at your local bar after an exhausting working week…
It’s easy to see how things add up, and how, by the end of the month, you’re left penniless once more.
Luckily, it’s easier than you think to prevent your expenses from outweighing your income.
Here are a few simple tips to break your paycheck-to-paycheck cycle once and for all.
1. Make sticking to a budget simple
Ah, budgeting. It seems so unappealingly adult-like, despite the fact that you’ve technically been an adult for too many decades to admit to now.
But there’s a reason why budgets are so commonly discussed amongst those who we would consider financially sensible: they actually work.
The easiest-to-follow budgeting method is the 50/30/20 method. While 50% of your income goes on the absolutely essential stuff, like bills and the weekly grocery shop, 30% goes on your “wants”, like dinners out and travel costs, while 20% should be saved without touching.
Stick to this budgeting method and you’ll find that you’re always covered, even when something unexpected puts a financial strain on your wallet.
2. Look at where you can cut costs
Here’s a question you might find tough to answer: how long have you used the same car insurance company? How about your phone bill – when’s the last time you changed your contract? Chances are, if you’ve been with the same company for several years, you’re missing out on today’s best deals.
Switching to more affordable “subscription” deals can help you to save up to a couple hundred dollars each month – and it all adds up. Check your car insurance, homeowner’s insurance, and TV bill and see if there are any better options available.
3. Pay off your credit bills
If you’re paying the minimum amount on your credit card debt, you’re probably dealing with the highest interest rates. The solution? Find a way to pay off that debt as quickly as possible.
There are plenty of companies out there that will offer a full low-interest loan that covers all of your credit card bills, giving you the freedom to pay off your credit debt and focus solely on repaying your loan with much fairer interest rates.
4. Save, save, save
If you don’t already have a separate savings account for emergency funds, it’s well worth setting one up. You simply never know when you may need to pay an unexpected medical bill or bail a family member out of jail (joking – but don’t rule it out as a possibility all the same!).
Even if you’re lucky enough to never need to splash the cash on a medical emergency, why not use some of your savings to treat yourself to a vacation or a family day out? It’ll feel like a present from you, to you – especially as you’ll soon get so used to saving that you won’t even notice the money leaving your account every month.
Breaking the paycheck-to-paycheck cycle isn’t as difficult as it seems – and that’s a promise. Follow these steps and you’ll be well on your way to financial stability.
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