Are you tired of living paycheck to paycheck?
If you’re ready to get ahead and start building your financial future, here are seven things you can do today to start getting out of debt and putting some money away for tomorrow.
1. Make a simple plan and write down your goals
If you’re trying to save money, planning is one of the most important things you can do. However, planning does not have to be difficult. Setting a realistic budget is one of the most important things you can do if you want to stop living paycheck to paycheck.
Setting up a realistic budget will not only help you create or edit it with what you can and cannot spend money on, but it will also help you keep track of your spending on a weekly basis (or monthly). I like to use a planner and write everything down to help me keep track of all my bills. Check out one of my favorite bill planners here! It’s a great tool to keep track of your bills.
2. Figure out your priorities
If you’re unhappy with the way things are going, it’s easy to convince yourself that things will always be this way. “I have bills to pay,” it’s simple to say. “I can’t afford that,” for example. If you’re sick of hearing yourself say it, today is the day to stop. You’re going to make a big change in your life today.
And by that, I mean that you will begin living the life of your dreams today. To do so, you must, of course, make some changes. Changes that are specific, not just any changes. And it all begins now…
3. Stop all nonessential spending
Stop all unnecessary spending. This entails eliminating everything that isn’t absolutely necessary for survival, such as eating out, going to the movies, getting Starbucks lattes, canceling subscriptions, and so on.
If you normally go out to lunch with coworkers every day, start packing your lunch instead. All of these small expenses add up quickly; if you eliminate them all for a few months (or even temporarily), it will be easier to get ahead.
4. Make a budget
It appears to be simple enough, but most people fail to do it. You may believe that you do not require a budget because “I know where my money goes.” Without a budget to guide and direct your spending, your money is likely to end up in unexpected places.
A budget ensures that your money is spent on the things that are most important to you. Paying down debt and saving for the future are two examples.
A budget isn’t only for people who are good with money. It’s for everyone, especially those who struggle to make ends meet. There are many different ways to create a budget—you can start by listing all of your bills and expenses, then subtracting that amount from your income each month.
5. Turn off all automatic payments
Automatic bill pay is a great way to avoid late fees, but it doesn’t help if you never know how much money is coming in and going out of your account. Turn off auto payments and check in with your bank account at least once a week to see how much money is coming in and going out each month.
6. Cut back on your fixed costs
The first thing you can do to save money is to examine how much money you’re wasting. This doesn’t mean getting rid of luxuries, it means getting rid of the things you don’t need, or that cost too much. To start, make a list of all your fixed expenses from the last month, including rent or mortgage payments, utilities, insurance payments and other monthly bills. Now evaluate those payments — are they worth it? Can you shop around for something cheaper?
Start with big items like phone and cable plans. Do you really need cable? Are you paying for channels that you don’t watch? Chopping off cable is a hard decision to make at first, but after a few weeks without it (and the $100-$200 savings) most people never look back.
The same goes for cell phones: do you have too many minutes on your plan? Do you have free texts included but never use them? Are there any extra features or smartphone apps that you aren’t using and could do without? The more unnecessary extras you can eliminate from your bill, the more money will be left over at the end of the month.
7. Start an emergency fund
What is an emergency fund?
An emergency fund is a savings account that you can use for unexpected expenses without having to take on debt. How much money should you have in it? Typically, financial experts recommend having three to six months’ worth of living expenses in your emergency fund. Having an emergency fund could help prevent this from happening if you ever need to cover surprise expenses.
Now that you’ve completed these steps, it’s time to begin your financial recovery. Realign your priorities, budget your income, and look for ways to save money. These small changes will have a big impact on your budget. With a little forethought and self-discipline, you can chip away at your debt until it is completely gone.
To help you stay on track, download a free copy of my budget planner. If you want to stop living paycheck to paycheck, do these things today.
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