Living paycheck to paycheck is so common that it’s almost a thing, am I right? But you don’t have to fit that mold! You can break free, even if you feel like you’ll never get ahead! What you have to do is start today by changing your behavior. The more impulsive you are about money, the more you’ll wonder why you don’t have any.
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For the most part I am a saver, and I don’t enjoy spending money. I almost always have buyer’s remorse, even if all I’m buying is some ice cream from the store. Up until just a few years ago, I was an extreme penny pincher.
My husband, on the other hand, is truly opposite of me when it comes to money. He used to spend nearly every penny he made each month. He’s told me time and time again that he wishes he had made better choices with his money when he first started working.
Living a paycheck to paycheck lifestyle can make you feel like you are drowning and can’t come up for air. It discourages you from achieving your dreams and goals, and, if you aren’t careful, it can lead to copious amounts of debt.
Too many people say “When I make more money, I’ll save some of it.” But the truth is, they won’t. If they are not handling their money today how they plan to handle their money tomorrow, they will not automatically start doing things differently when they make more of it.
So What’s Stopping You From Getting Ahead?
Do you want to know what exactly is stopping you from getting ahead?
It’s you. Yep, that’s right. You are the one stopping yourself from getting ahead.
Basically, it all comes down to how you manage your money. If you’re a bad boss and let your money do what it wants, your household won’t turn a profit. If you are a great boss and always make sure each dollar is working to your advantage, you’ll turn a profit each month and then some.
The more you are aware of your behavior, the more you will think about changing and turning your finances around. Let’s go through some reasons you might be living paycheck to paycheck and then talk about the solutions to each one.
Be sure to take these all with a grain of salt. Sometimes you have to live paycheck to paycheck because of medical bills or a job loss that drained you of funds. It takes time to recover from a financial emergency, even if you were prepared for it.
You Don’t Have a Budget
The first, and probably most important, step to get out of a financial rut is to budget. It’s only as boring as you make it. Budgeting can be fun if you think of it as a competition! Here, let me give you an example. You might have a goal from your budget each month to lower some expense, to save more money, or to make more money. Try to beat your best numbers from previous months or years. For example, if you start budgeting and notice that your utilities for the month of September were the lowest of all at $428, try to beat that amount in the current month by doing everything you can to lower those bills. Let your whole family in on the competition and then, if you beat that number, treat everyone to ice cream. See, it can be lots of fun!
Solution: Set up a budget and find out where your money is going. By tracking expenses, you will see just how much you are spending on food, clothes, and utilities each month. It might just make you think twice about those impulse purchases. A budget will also help you save your money and help you see if you need to make more money.
You Don’t Map Out Your Future
We all have dreams, and they can become goals if you work towards them. Some goals, though, can only happen with money. But if you don’t write down your goals or have a clear idea of what you need to do to reach them, you aren’t going to do what you can with your money now to make them happen later. It would be great to take a paid-for vacation to Europe for 3 weeks or have six months worth of expenses in your savings account just in case, right? But without money left at the end of the month to save for those goals, you are selling yourself short.
Solution: Figure out how to turn your dreams into reality. Break down your goals into easy-to-manage mini-goals and then make sure you are putting your money where it needs to go each month so you can attain those big goals.
You Aren’t Saving Any Money
It might be that every month you have great intentions to save money. You even have a number on your budget to save $300. But then reality hits when the last day of the month rolls around, and you are down to your last $10 and have no food in the house. Dang! You always have next month, right?
WRONG! If you say this every month, chances are it’s become a habit. A habit is hard to break and you have to do something about it fast.
Solution: You have to pay yourself first if you want to save money every month. Set up direct deposit to put that $300 into your savings account each month. If you are paid twice a month, each paycheck should have $150 taken from it and put into savings. Also, be sure that you have savings goals. Without goals you won’t be motivated to save and you will resent putting money into savings.
You’re Overspending on Everything
Maybe you take no thought as to how much something costs. You don’t care. You just buy it because you need or want it. You could make a little effort to save some money on a few things if that will make the difference and help your financial situation improve.
Solution: If you never shop around for the best price, start doing your research (especially on big ticket items) so you can enjoy the same purchases for a lot less. Think about every single thing you buy or pay for. If you already have something similar at home, use that instead. There is no need for duplicates. If you think your utilities are too high, call your providers and find out if you can get your rates lowered. There’s no harm in asking!
All those flyers you get in the mail for big department stores, shoe stores, and others offering BOGO, $10 off, and 25% off could be really great deals, but if you are spending all your money on those deals, are they really that great anymore? Think of it this way, if you only bought the item because it was on sale, you probably just got a bad deal. You’re not going to wear all those shoes or use all those purses if you really only have four or five favorites.
Solution: Throw out mailings. Don’t even look at them. You might even be better off not going window shopping or browsing online if you know this is a bad habit you have.
You Absolutely Must Have the Latest Thing
Yes, it’s important to be all hip, cool, and tech-savvy. But if you’re sacrificing your finances for it, it’s kind of ridiculous. There will always be a new cell phone or a new top that is “in” at the moment, but you don’t have to have it.
Solution: Wait for the buzz to die down and then decide if you must have it. Surely if you’ve lived without it for a month or two, you really don’t need it anymore.
You Think You Have to Spend Money to Have Fun
It’s fun to take your kids to the aquarium or go to dinner and a movie with your husband on Saturday night, but there are so many other fun things you can do that are completely FREE.
Solution: Learn how to laugh at jokes, climb a mountain, or read a great book (from the library). They’re all free!
You Deserve to Treat Yourself Each Paycheck
It’s pay day, you’re tired from a long week at the office, and you totally deserve a fancy dinner at The Cheesecake Factory. That’s what you worked for, didn’t you? Well, not exactly. You should think of your job as a means to get out of living paycheck to paycheck. To improve your lifestyle, not hinder you from moving forward. If you think you need to spend $50-$100 every two weeks because you deserve it, you’re out $100-$200 a month.
Solution: It seems like you probably work well when there is a reward after hard work. Instead of going out on pay day, wait until you reach a financial goal. If you set a small goal to save $500 this month, and you actually do it, go out for ice cream or buy something small you have been wanting for some time.
You Have Money-Sucking Habits
Once you’ve developed a money-sucking habit, it can be pretty hard to break. Let’s take meal planning for example. Maybe you always wing it and it works for you, but having a meal plan could help you save money and give you more wiggle room in your budget each month.
Perhaps you’re a brand snob. That could be a hard habit to break unless you realize just how much more money you are spending on those products, whether they be food or clothes.
Solution: Pinpoint your money-sucking habits and fix a few of them that are the worst. Only work on one or two at a time, and add more as you start saving more money. Here’s a list of habits that you might be able to easily change.
Impressing others, or trying to “Keep up with the Joneses,” is a dilemma that many people fall for. It might happen slowly or you might just be the competitive type. One-upping your neighbors can lead to highly costly purchases, including boats, RVs, beautifully landscaped yards, or home renovations, whether or not you can actually afford these purchases.
Solution: Get off your high horse and get in touch with reality. If you have nothing to show at the end of each month, you need to stop worrying about the things other people around you have. Instead, be grateful for what you do have and work hard for the things that matter to you, not to other people.
You Live in a High Cost-of-Living Area
Where you live makes a huge difference on your financial picture each month. You might have a great job, but if you live somewhere that has high rent, expensive groceries, and a ton of shopping malls, you cannot expect to come out ahead unless you are really strong willed.
Solution: Move away from the expensive part of town and find a nice place to live in a more modest area. Yes, I understand that the apartments may not be as nice as where you are now, but it might be worth it if you can save some money each month.
You Are Stuck in Your Job
I hate to break it to you, but maybe you’re not making enough money in the first place. If you go through your monthly expenses and find out that you truly cannot cut anything out of your budget, you better start making more money. The job you currently have just won’t cut it.
Solution: Try to get a promotion or find something better. If you love your job, maybe you could get a side job or start hustling to make a few extra hundred bucks a month (check out my “Money Madness” board below where you can find tons of ideas for making money). Instead of spending that extra money, send it straight to savings.
There are a hundred other reasons why you could be wasting hard earned money each month, but start with the biggest culprit. What tends to be the biggest reason why you are running out of money and unable to keep anything? Start there and the rest will get easier. Work at it and you will see rewards come that you never would have thought were possible.
What can you do to get ahead?
Linked to: Frugal Friday
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