11/05/2022: Ways to Stop Living Paycheck to Paycheck
Living paycheck to paycheck means money comes in, but all that money goes out by the end of the month. Even if your bills are current and you can maintain your household and provide for your basic needs, this can still be frustrating.
Living paycheck to paycheck means you have to scramble if an unexpected expense arises, so it’s always hard to save money or plan for the future. If you are looking for how to stop living paycheck to paycheck, there are a few things you can do to start gaining traction with your finances.
Create a Realistic Budget
You have to know where your money goes. Take a close look at your checking account and compare it to your bills. An effective budget includes fixed expenses, such as your mortgage or rent or car payments, and recurring expenses that fluctuate, such as your electricity bill.
Consider bills that only occur once a year, like taxes or car registration. Then determine how much you realistically need for groceries, gasoline, and other expenses. You can leave a little cushion in your budget to account for a bill you may have forgotten, but don’t spend that money – your goal is to live within this budget.
Find Ways to Spend Less
As you examine your budget, you may start to notice small ways you can spend less on bills or unnecessary expenses. For example, you may challenge yourself to be more energy efficient to reduce your utilities. If possible, consider walking, biking, carpooling, or combining errands, whenever possible, to save on transportation costs.
Look for ways to trim your grocery budget, eliminate a streaming service you don’t really use, or look for more inexpensive date night options. Sometimes it will take more time and effort to spend less, but there is a payoff in the end.
Pay Off Debt
Paying off debt is often easier said than done, but realistically, debt creates a stronghold on your finances. Working a payoff plan into your budget is imperative if you have credit card debt. As you pay off one debt, you have more money to pay down other debts. Eventually, this snowballs into lower or no debt. That money is now free to be put into savings or investments.
Build Your Savings
Having an emergency fund and savings is essential. Those unexpected expenses that come up from time to time keep you living paycheck to paycheck, so having an emergency fund is a safety net that keeps you from taking money from your regular budget or having to charge it on a credit card.
You can use the money you’re saving as you trim your budget to build your savings or have money automatically transferred from your checking to your savings, so you don’t even have to think about it. Then, when your debt is eventually paid off, you’ll also have more money to put into savings.
Find Ways to Earn More Money
There are a variety of ways you can earn money. Whether selling personal belongings, turning a hobby into a side hustle, or getting a second job, you can consider what will work best for your situation. Earning more doesn’t mean you automatically have more money to spend. Instead, you want to continue living within your means as you pay off any debt and build your emergency fund first.
Let State Bank Help You Take Control of Your Finances
State Bank is here for you whether you are looking for a place to start your emergency fund, want to transfer money between accounts quickly, or have other questions about your finances. Contact us today or stop by one of our convenient locations to learn more about our checking and savings accounts, certificates of deposit, and other financial services.