When the end of the month comes around, how much money is left in your bank account? If the answer is not much, then here’s how to stop living paycheck to paycheck!
Have you been living paycheck to paycheck? If you aren’t sure, then let me ask you another question. When the end of the month comes around, how much money is left in your bank account? If the answer is not much, then you are living paycheck to paycheck! You might not be in financial trouble, but without a budget, your financial stability is doomed! If you can’t seem to stop checking your bank account or worrying about money, here’s how to stop living paycheck to paycheck!
Take a look at your monthly expenses
Stop what you’re doing and grab a piece of paper and a pencil. Write down every single thing you regularly spend money on. This will become a list of your expenses. Be sure to list any and all bills you pay as well. If you need some ideas, here are a few common ones:
- Insurance (car, health, life, dental)
- Cell Phone/House Phone
If you are regularly paying for something, it should go in this category. See if there are any things you can cut from this category, such as your home phone or lowering your car insurance.
Take a look at your “extra” spending
Once you have added up your monthly expenses, it’s time to see what money you have left to spend. These are areas that aren’t essential to your survival, and that you could do without if you had to. To figure out how much you have to spend in this area, take your total income and subtract your total from the monthly expenses section. If you’re looking at a big fat $0, then you need to omit this section, for awhile.
If you do have money leftover, it’s time to make some decisions about what to include with the money you have leftover. If you find your totals in the negative, you need to get rid of something. Here are some examples that would fall in the extra category:
- Netflix, Hulu, Sling TV, etc.
- Eating Out
- Clothes (instead try trading clothes or buying them second hand for awhile)
- Date Night (we have lots of free or cheap date night ideas here)
Put it all together
Now that you’ve evaluated what your budget situation will allow, it’s time to put it together. Total up everything you’ve written down in both categories. If you find you still have extra money, you’re on the right track! If not, it’s time to start making some changes. Start by asking yourself if there is anything you can cut from your categories. Once you’ve done this, go back and see if there are any expenses you can lower. A good example would be selling off one of your cars to cushion your emergency fund and lower your car insurance. If this is too drastic, consider something smaller. Couponing or shopping sales more often could drastically lower your grocery bill, therefore lowering your grocery expenses.
Save your leftovers
Now that you (hopefully) have some extra wiggle room, we’re going to talk about what to do with it. Whatever number you came up with after lowering and ditching some of your expenses, is going to be put directly into savings! Instead of relying on this money to be there at the end of the month, pay yourself first! Take this money out right when you get paid, and don’t think about it! You can even set up an automatic draft if you need to.
Living paycheck to paycheck may seem easy, but it actually makes everything more difficult in the long run for you. When unexpected expenses pop up or you find yourself in an emergency, one extra expense will crush you (believe me I know!). If you follow these steps, you will no longer be living paycheck to paycheck, and your bank account will be a lot better off for it.