Living Off Your Paychecks
What would happen if you lose your job today? What if you needed funds for a medical accident? Many individuals would be in trouble. Living paycheck to paycheck is at a point where it is a way of life for a lot of Americans. You do not have to live this way. Saving money is simple if you just follow a few simple steps.
Make A List Of Your Expenses:
If you don’t know where your money are going, you are in major trouble. It isn’t possible to save until you write out your monthly expenses first. Look at your past months bills and expenses to determine where your money went. Chances are that you will find that you spent a lot of your funds on unnecessary expenses. Do you think you really needed to purchase those movies for $20 each when you could have rented them for $5? How many days a week do you eat out? If you don’t have receipts for all of your expenses, estimate what you spent.
Draft a Budget:
List down your needed monthly bills and budget a set amount for changing expenses like entertainment or amusement. Be sure to put savings into your budget. One or two hundred dollars a month will add up over time. If you have credit card debt, budget higher than your minimum payment. You will never get out of debt if you only pay the minimums.
Set Yourself Some Goals:
Set a bunch of savings goals. Be sure they are realistic, do not make your first objective to save a million dollars. Come up with a goal to save $2000 dollars, followed by $5000, etc. You will soon realize that saving is addictive and you will enjoy seeing your savings account increase.
Automate Your Savings:
You cannot spend what you don’t see. If your company presents it, have them remove money from your check and put it into savings. If they offer a 401K program, take full advantage of their comparable contribution.
Put Unexpected Money Into Savings:
If you get a bonus from work, inherit money or get any unbudgeted cash, put it into your savings. You do not need it to pay your bills and expenses so put it up for a time when you do need it.
Put Away The Credit Cards:
Pay cash for purchases. If you can’t manage to pay cash for anything, don’t buy it. Credit card fees will add up and keep you in debt. You could very well end up paying for that pizza for 5 years.
Know How Much Money You Have:
Balance your checkbook daily. When you think you have more money in your account, you are likely to spend more. Be cautious with checkcard purchases. It is easy to fail to record them and they do not always show up on your online banking statement immediately.
By following the steps above anyone is able of breaking the paycheck to paycheck cycle. It does not matter if you can save $500 a month or $50 a month. Eventually, you will get there. All you need is a little patience and a bit of discipline.
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