Are you someone who lives from paycheck to paycheck? Well, you’re not alone. A survey says that even those earning six digits admit that they also live paycheck to paycheck. They tend to spend their paycheck once it becomes available in their account. They don’t save, they get stressed, and yet reluctant to talk about it.
You’re Not Alone, But It Doesn’t Mean It’s Okay
A 2017 survey discovered that 57% of people in the U.S. have less than a thousand dollar in their bank accounts. This may make having no saving a typical thing, but it shouldn’t be. Setting aside a portion of your paycheck as saving (no matter how little) is quintessential. For any amount you saved today will accumulate over time and will have a significant impact on your financial stability in the future.
How Can I Save When My Paycheck Is Just Enough To Pay The Bills?
It’s hard to put away a few dollars for your savings if you’re struggling to make both ends meet. We always hear the words, “if there’s a will, there must be a way.” It’s irritating to the ears, but very true hits you bull’s eye.
Starting to save even a dollar each week is a big leap. It’s a cliché, but honestly, that first small step is considered a giant leap for your future will depend on it. It’s not really how much you set aside that matters, but the habit of saving you developed.
I, too, used to live or barely survive on my paychecks. I once belong to that 57% with almost nothing left on my savings account. But then I realized I need to have savings to be my safety net I could fell back on. Whatever happens with my job, my savings will save me.
It’s a tough call. But with the assistance of a financial coach, I was able to do it slowly in tiny steps at a time. And here today, I will share with you the secret of breaking away from living the paycheck-to-paycheck life cycle.
Document Where Your Money Goes
Paying attention to your cash flow is crucial. Write down every purchase you are making (either cash or credit). This will enable you to see where your salary is going. Analyzing what’s happening to your hard-earned money will make you more conscious with your superfluity. Becoming more and more conscious about how you spend your money could end up on changing your spending habits. Wise spending will stretch your paycheck further, that you’ll hardly notice you still have some money left as the next paycheck comes.
Make Saving A Habit And Place It Somewhere Not Accessible
With some dollars left in your account, you’ll have (extra) money to set apart for savings. As I said earlier, the amount does not matter but the habit that you will develop over time. Once it turns into a habit, you’ll find yourself saving more, even setting aside savings first before you spend a dime on anything.
Sometimes, even if you have the savings, you’ll be tempted to get and spend it. Be sure to put it to safekeeping, somewhere not easily accessible. You can invest it somewhere to earn interest (savings account that has higher interest earning or money market).
Never Go Beyond Your Means
Most of the time, we live a lifestyle that we really can’t afford. Saying no to invitations on dining out on expensive resto, going on trips (that is unplanned), or buying items on sale would hurt our pride a little. But the financial freedom it would result in the future is a thing that would bring us peace of mind and joy.
Know The Difference Between Your Needs And Your Wants
Learn to prioritize your needs (foods, mortgage, insurance). Your wants can wait (or better ignored). Be frugal, yet be joyful with what you have and be content.
Have Someone To Keep You Stay On Track
Letting your spouse, a friend, or an adviser (in my case my coach) work with you on this increase the probability of your success in freeing yourself from a paycheck-to-paycheck lifestyle. They are there to remind you, check on you, correct you whenever they see you getting off track, distracted by things around you or persuaded by what you see on ads or online.
Knowing Your “Why”
It’s essential to know your why according to financial coach. Your why is the strong force that will push you to change your mindset and develop the habit. Whether it is saving for a new car, going on your dream vacation, having a comfortable retirement, saving for your children’s education, the thing is you got a goal. You have a reason you are doing something that is very hard to start with. You are saving money because you believe that one day it will free you from being tied on your paycheck. You believe in something that you can make come true.
It’s hard to develop a new habit, especially when it comes to money matters. It’s even harder than breaking away from a smoking habit. Don’t be too hard on yourself. Things won’t change overnight.
Be patient, be motivated, saving is something you must voluntarily and enjoy doing because you know it’s for your future.