Living paycheck to paycheck is a reality for most, but you can change that by making a few changes to your spending and saving behaviors. After your paycheck is deposited and you pay bills, not to mention having a little left for spending, there is not much left to go around, so it’s what you do with the money going out that is important as the money coming in. Once you start to get ahead there will be no looking back to the days when you were living paycheck to paycheck, never getting ahead.
Build Up an Emergency Fund
Ever wonder, or maybe you have gone through this, where you have an unexpected charge come in, how do you pay for it? Probably put on a credit card and then struggle to pay back the balance, adding to the ever-soaring credit card debt. If you are able to put a few months’ worth of expenses into an account, you can give yourself at least a little cushion so that if anything does come up, you can pay for it instead of putting it on a card and wonder how you will ever pay it back.
Reduce and Track Spending
First off, if you don’t know where your money is going, then starting with taking a look at last month’s debit or credit card statement would be a great start to see every purchase that was made. From there you can separate between necessary expenses and what probably could have been avoided. Charges such as going out to eat can add up to hundreds of dollars a month that could be reduced just by going grocery shopping and preparing your meals and snacks at home for a fraction of the cost each and every month.
As you now have a cushion for yourself and are starting to reduce expenses, that should free up a little extra money to where you can really start to put a large chunk into first your credit card debt. If you are carrying over a balance each month that could be potentially 16% APR on your balance, so if you’re making the minimum of just over, you are hardly putting a debt into the balance and just are paying interest. If you can afford and sacrifice to make large payments until the debt is going, you can really free up extra money each month to put towards more important areas.
Don’t Forget About Your Future
Speaking of important areas of your finances, there may not be one that is much of a priority as saving for your future. Thought it may be decades away, the earlier you can start saving the better so it will have more opportunity to grow over time, so that hopefully you can continue your lifestyle, without work, as you live out your remaining years relaxing, traveling, and living life to its fullest. Look to your work’s company matching contributions, as if you’re not doing the max, it would be leaving free money on the table otherwise.