If you are living paycheck to paycheck, then you can rest assured that you’re not alone. You could find yourself in serious trouble if an unexpected expense came up. Fortunately, there are several things that you can do to get yourself back on track financially.
If you don’t make a lot of money, it can be very stressful worrying about how you will be able to pay all of your bills each month. The good news is there are ways to stay out of debt even if you only have a small paycheck to work with. Taking the right steps to manage your money can keep you out of debt and help you have a better financial future.
A lot of people get into debt before they even realize what they are doing. It’s not their intention, but it sometimes happens because people are not mindful of the differences in what they are making versus what they are spending.
Although saving money and becoming financially stable does take more time for some, there are several strategies to adopt that can assist with the process and end the cycle of living paycheck to paycheck.
1. Ask yourself if you really need it –
When you are out shopping there will always be some things that look like a good buy until you actually get these things in your possession. The dress may not fit the way that you thought that it would. The cool shoes may not go with anything that you have. Ask yourself if you really need it before you waste money that could be used for a greater purpose somewhere else.
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2. Don’t charge if you can’t afford it –
It may seem feasible to simply charge it. After all, you have the credit card, and you can pay everything back in small increments. You don’t have to get a balance that you cannot pay, though. It is going to be a lot better to only make purchases that you can pay in full at the end of the month. This is a surefire way to avoid debt.
3. Resist those no interest deals –
There are some credit cards that can really tempt you because there are a lot of promotions like the “no interest for 6 months for new cardholders” deals. This seems almost too good to be true. You get to take home the merchandise, and you can pay on it for 6 months without getting charged any interest. This is ideal for emergencies like car repairs if you simply do not have the money to afford it, but it should not be for any nonsense purchases. Don’t abuse a card simply because you are getting a grace period in which no interest is charged.
4. Start saving for emergencies –
It’s essential to save for those emergencies. You never know what can come up down the line, so it makes sense to avoid excessive credit card charging by saving. You don’t want to get involved in those Payday Loans for the temporary fix. The interest that comes with this can make you dependent on these types of stores. You certainly don’t have money to pay back interest if you had to borrow the principal amount the week before.
A deposit should be made every paycheck, no matter how small. Even $15 every two weeks is $30 a month, which equates to $360 in one year. While some may not consider this substantial, it can have a large benefit overall, as it demonstrates the power of even minimal savings. As greater income becomes available, savings deposits can increase, leading to greater financial liberty over time.
5. It’s not a deal if you don’t need it –
Don’t take away money from one thing that you need to pay for something that you could do without. In other words, prioritize your spending. If you cannot afford the sale, it isn’t all that great to begin with. Develop a budget and disregard the stores that are advertising the sale of the year. This may be a great way for the store to make money, but it could become something that leads you into debt.
6. Live within your means –
It can become very tempting to buy new clothes or big tickets items like televisions when you see other people enjoying these things. It can be tempting, but you should also think of the ultimate cost in the long run. Will buying clothes that will be out of style next year really be worth that debt that you are getting into? Will the new car be as much fun to drive if you are barely affording to buy gas for the vehicle? The obvious answer is no so consumers should consider this before they go down the road that leads to this type of debt. If you don’t make enough to handle the monthly expense, you should consider cutting some of those frivolous expenses.
7. A budget can be a financial map –
It can be very beneficial to sit down and make a budget. Write down your paycheck amount and make a list of all your bills. You will also want to make budgets for things such as groceries, gasoline, and other added expenses that occur. Make sure you account for all of your monthly costs. This will also be a great way to show you where you may be overspending. It can be costly if you choose to purchase a coffee every morning or buy lunch every day. You can learn ways to still have fun while keeping faithful to your budget. This will help you learn how to use your paycheck more effectively and stay out of debt.
Many people would be able to stop living paycheck to paycheck if they got themselves on a budget and stuck to it. That is why you should create a household budget right away. Start by writing down your monthly income and all of your monthly expenses. After that, you will need to subtract your monthly expenses from your income. If your income exceeds your monthly expenses, then you are making enough money to support yourself. The reason you are probably living paycheck to paycheck is because you are trying to live above your means. Use this free online tool to help you create a budget. It’s fast and easy to use, and it will give you an overview of your current financial picture.
8. Flexible but disciplined budgeting –
Income requirements and essentials may fluctuate, so one should always reassess and modify their budget as needed. However, it’s vital to always have a budget and avoid only paying off things as the need arises. Instead, debts, bills, and other living expenses should be calculated ahead of time and paid on a schedule, leading to a greater sense of control and savings in one’s income.
Budgeting is not solely reserved for individuals with six-figure salaries. In order to keep money, one has to first learn how to handle even a small amount. Those who earn the least must be the most mindful, and learning how to spend more wisely and effectively will ensure that greater funds are saved when they’re acquired in the future.
9. Find ways to trim your expenses –
If you are like a lot of people, then you are probably spending money on things that you do not necessarily need. You will be surprised at how spending a couple of dollars unnecessarily could put a hole in your pocket. There are several ways that you can reduce the amount of money that you spend. For example, you can get rid of cable and get a Netflix subscription for only $8.99 a month. You can cook at home instead of eating at a restaurant. You can get your morning coffee at home or at the office instead of going to that expensive coffee shop every day.
Excess debt is one of the many reasons why many people are living paycheck to paycheck. If you find ways to trim your expenses, then you will be able to put the extra cash towards paying off your debts and then building up your savings.
10. Ways to increase your income –
If you feel like your current income is not enough to make ends meet, then you should find ways to increase it. For example, you may want to take a part-time job on the weekends if you have the time. You can also use your talents online to bring in extra income.
Part-time jobs, even seasonally, can help people get ahead and become more financially stable. In some cases, people are left living paycheck to paycheck due to a certain set of outstanding bills. If this is the case, supplementing income with a part-time job on the weekends or several evenings a week could provide enough additional financial support to alleviate the debt.
Although some financial situations cannot be remedied with commitment alone, becoming more conscious of one’s debts and savings can lead to greater motivation and commitment. While finding a better paying job is a given, it’s more important to look inward and assess how one’s current budget can be optimized and spent more effectively. Reducing living costs, developing better spending habits, and seriously addressing debts are the best ways to start saving more each month.
11. Put away the credit cards –
Whatever you do, don’t use your credit card unless it is an absolute emergency. If you can’t afford to pay it in cash, then don’t buy it. It can be hard when you are trying to keep up with friends and neighbors, but it is far more important for your financial health to stay out of debt than it is to have the newest video game system or designer purse. If you do use your credit card, pay as much as you can every month and pay it on time. High balances and missed payments are a quick way to wreck your credit.
12. Know your credit score –
It is also important to keep an eye on your credit score information. This can be achieved by utilizing a credit report. It’s imperative to check your credit regularly with the help of a credit report because debt problems could result in you not qualifying for a loan, or being able to purchase the things you want and need. Checking your credit score information is also important so that you make sure you do not find any inaccuracies. Everyone is able to get a yearly credit report for free, so it is important to take advantage of this option.
13. Know when to ask for help –
One should always tackle high-interest balances first, and figure out if there’s a way to consolidate certain credit card debts into one payment. A Debt Management Program helps clients prioritize their debts and devise a strategy that saves them money while actively paying off bills.
If you are struggling to manage your money on a small paycheck, and you have more money going out than coming in, contact Advantage CCS. We are a non-profit credit counseling service who puts our customers first. You can contact our counselors online, via the telephone, or in person. We can help you work out a budget and a Debt Management Program to help keep you afloat, despite the size of your paycheck.
Conclusion –
Taking the right steps to manage your money can help you stay out of debt. If you make smart money choices, you will be able to afford more financial opportunities such as purchasing a home, or a car. People with better credit and less debt are able to qualify for better financing options and can take advantage of other special deals. Take charge of your finances so that you can have a better financial future.
If you need help getting out of debt, contact Advantage CCS today. The call is completely free and always confidential. We’ll get you started with a budget and list your options for debt relief. A Debt Management Program may work well for you, and you can discuss that option with your certified credit counselor. We’ve been helping people get out of debt since 1968, and we can help you too!
