If you find yourself caught up in the lifestyle of living paycheck to paycheck, you’re not alone. Nearly two-thirds of the workforce lives this way. Unfortunately, it leaves you in a vulnerable position in the event that an emergency requiring money comes along. The good news is you can change your current financial status. It just takes a bit of adjusting and knowing where to cut back.
It doesn’t take long to accumulate excessive amounts of debt. You purchase a home, a car, and apply for and receive several credit cards. Before you know it, all of your income becomes tied up in debt. Thankfully, there are ways to reduce the amounts you owe and free up money to live comfortably.
The first option is to eliminate it by taking out a debt consolidation loan from a company like Braidwood Capital. However, if your credit score is below a fair status, finding a lender willing to approve your loan may be difficult. The second option is to do it on your own by contacting each of the creditors and setting up payment arrangements. Unfortunately, if you are a month or two behind on payments you may not be eligible.
Many people get caught up in the paycheck-to-paycheck lifestyle simply because they mismanage their money. One of the best ways to track your spending and control bad habits is to set up a household budget. Get a piece of paper and your bills, and write down every expense you have each month. Make sure to factor in other expenses like gas, food, and essentials. Once you have a final number, subtract it from your total net monthly income. The number that remains is what you have to work with. If you find that you need more than you earn, then you can either take on a part-time job to become solvent or find ways to reduce your monthly obligations.
Thankfully, if you need to trim off a few hundred dollars from your monthly expenses, in most cases, it’s doable. Cable and cell phone services are a good place to start. Contact the service providers and ask for ways to reduce the bill. With regard to cable, for the short term, you can opt for basic service. When it comes to your cell phone, if you have rollover credits each month, it means that you can move down to the next tier. Just these two expenses can shave off a hundred or more each month that you can use to pay down debt.
If you need to recover a few hundred dollars to remain on even ground, try bundling some of your services. Many cable companies also provide internet and landline phone services. Some cell phone companies now provide satellite TV. If you have homeowner’s or renter’s insurance and auto insurance, chances are you have them with two different companies. By bundling any one of these services, or all of them, you can expect to see a discount of 10, 20 or even 30 percent.
Unexpected expenses are a part of life and so are investments. That’s why it’s essential to have money tucked away for when things come up like expenses or like starting your own business. This will prevent a minor monetary setback from turning into a major financial catastrophe. Start small, taking just a few dollars each pay period and put it into a savings account. The key is to have a hands-off agreement that this money is only for emergencies. You may become tempted to pull funds once you see it blossom into a substantial amount. However, remember that things such as a septic backup or an unforeseen illness can run into the tens of thousands.
Living paycheck to paycheck positions you for eventual financial ruin. Thankfully, there are ways to avoid it and enjoy a fruitful financial future.