You’ve decided to stop living paycheck to paycheck, and now you have work to do. Money doesn’t magically stretch to cover all of your expenses because you need more time. You have to make it fight for you.
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Change Your Mind
The first step in getting out of the paycheck-to-paycheck cycle is to consider your thoughts about money. Do you see more money as the answer to your problems? The truth is your habits form your financial situation. If you keep up with the Joneses, you will always be behind and never satisfied. Alternatively, think of money as a tool. You use it to buy and do things. When appropriately and patiently managed, you can build wealth for your family.
What’s in Your Account?
Next, you have to stop spending. Doing so is a short-term solution so you can review your accounts. You need to know how much money you have and what is pending in your account. You also need to go over your last three statements and see where the majority of your money went. Tally up how much you’re spending each month in different categories: food, entertainment, housing, utilities, gas, phone, cable, credit card payments, etc. Go line by line and determine what you can reduce or eliminate.
Create a Budget
Additionally, ensure you separate your needs from your wants so you can create a budget. Your budget should be less than or equal to your income. You will have to sacrifice your desires to save money until you increase your pay, decrease your expenses or both. The fastest way to reduce your total budget is to eliminate unnecessary charges, such as the candy at the gas station or that subscription you never use. You’ll be surprised how much money you can find in your budget when you’re serious about saving money.
No Brand Loyalty
Finally, forget brand loyalty and focus on saving money. For example, if Boost Mobile is cheaper than Verizon for the same service, then you should probably switch to Boost Mobile. If Aldi has lesser-known products that are healthy and substantial, then you don’t need to purchase Kraft and General Mills. This focus applies to food, clothes, shoes, cars, etc. Shop around and find the best deal before you spend your hard-earned money
Coupons and Rebates
Don’t be afraid to use coupons and rebate apps when you shop. Applications like iBotta, Rakuten, and store apps can provide additional coupons, discounts, and cashback. You can earn cash back just for signing up, even if you don’t use the app. Store rewards programs also offer digital coupons that you can be paired with paper coupons from mailers, newspapers, or printed from websites. Some stores will double coupons or accept competitor coupons. Most won’t outright tell you, but you can always ask a manager or read their coupon guidelines online.
There are less expensive options for anything you spend money on, even your bank accounts and loans. If you have overdraft fees and bounced checks, you are hurting your account balance and making the bank profitable. Most overdraft fees are between $25 and $35. Avoiding the charge can free up funds for savings, investing, or groceries.
Yes, this is hard but so is not having enough money. Changing your lifestyle is never easy. However, getting out of the paycheck-to-paycheck spiral is worth the work.