Does it seem like the money in your bank account just keeps disappearing? Do you have nothing left to put into savings? Many Americans struggle with living paycheck to paycheck—in fact, according to Forbes.com, as many as 75% of workers have nothing left to put into savings after paying their bills.
This vicious cycle is one that is difficult to break but completely possible and necessary for your health and wealth. Here are the best ways that you can stop living paycheck to paycheck.
Track Your Spending
This is my #1 piece of advice. Tracking your spending will show you where all of your funds are going so that you can better cut back where you need. You can’t begin to change living paycheck to paycheck until you know where your money is going.
Take a Look at Your Lifestyle
Many workers who live paycheck to paycheck have created this situation for themselves because they are living above their means. Your rent/mortgage should be no more than 1/3 of your income before taxes, and ideally, it is no more than 1/4 of your income.
I highly suggest living under your means, whether that means opting for a smaller house/apartment or not buying that fancy car. For some, living below your means can be more difficult, so you will need to create an actionable plan of how to cut expenses where you can.
Know Your Priorities
There are some basic expenses—rent/mortgage, gas, water, food, etc.—that you can’t avoid. Sit down and make a list of the bills that you absolutely must keep paying. This helps you to know where you can cut your spending.
Do you know why you want to stop living paycheck to paycheck? Would saving up for a more reliable car make your family’s life easier? Do you want to travel more? Knowing the WHY you are wanting to stop living paycheck to paycheck can help you manifest your goal.
Hire a Financial Wellness Coach
Other than that I can totally relate--I have lived paycheck to paycheck for my most of my life and it was no bueno...until a few years ago! As my income grew so did my goals, so did my options, and so did my independence. The combination of living below your means and increasing your earning power simultaneously is a weapon that you want to learn how to master.
Tackling your financials alone can be super difficult, especially if you have a negative relationship with money. A financial wellness coach can help you assess your priorities and make a plan to not just build your savings account, but to thrive and enjoy life. You deserve it. Contact Coremoney Coaching today to book your initial free consultation.