Do you find yourself strapped for cash every week, not knowing how you are going to make ends meet? Are you waiting to pay your bills every week until your paycheck comes in because you just don’t have enough money? I have been there and it is a very stressful position to be in. Here are 11 tips that can help you quit living paycheck to paycheck and regain your financial stability!
1. Change Your Mindset: Think about money in a positive way, not a negative one. If you always think about how money is limiting you, you will always be stressed. Changing your mindset and thinking about how money can allow you to dream, plan and work harder. I only used to think about how stressed money makes me and how I will NEVER make enough money to be happy. In the last year I have flipped a switch and try to only think about money in a positive light. When checking my bank account and having my budget meetings I get excited to see how much money we can save, put towards our debt or if I can even give myself a little spending money. Money should always be viewed as a tool, not a burden.
2. Set a Goal: Setting goals is a huge boost for most people when it comes to finances. Going blindly into the dark will only bring you stress and despair. You need to set goals for yourself and for your money that will help you grow and bring you motivation! For example, my husband and I are dreaming of having a baby in the near future, however, we need to save a certain amount of money before we even start trying. Having this goal of starting a family gives us a reminder every time we want to unnecessarily spend money that there is a bigger goal we have that is going to bring us much more joy than whatever spontaneous thing we are wanting to spend money on in that moment.
3. Cut Back: Do a hardcore spending analysis and find out how much you are spending in every aspect of your life. Find every single dollar you made in the previous month and find out where it went. Did you spend $100 on Starbucks last month? Did you go into Target with no plan and wind up blowing $250 on things you didn’t need? Figure out where your money went, and pick and choose things that you believe to be unnecessary and cute them back, or cut them out completely. This will give you more money to work with in your budget!
4. Make a Change in Habit: Stop getting coffee at Dunks or Starbucks and start brewing your own at home, have date nights at home, cut coupons for groceries, shop around and price match before purchasing big ticket items. Changing your day to day habits can save you HUNDREDS of dollars every year. Be smart with your money and how you spend it if you want to become financially free!
5. Give Every Dollar a Destination: Something that has changed our financial life FOREVER is listening to Dave Ramsey. When I first started looking into budgeting I found him on YouTube and in one of his radio show segments he said that you have to “give every dollar a destination”. This means that every penny you have coming in each month needs a name and a place to go. There must not be ANY lingering money. Assign each dollar to an area of your budget. Allow yourself a certain amount of cash for food, date nights, pets, etc. and if there is cash leftover give it a name. Whether that extra cash is just going to savings, a down payment for a house, paying off debt or in a vacation fund you NEED to give all of your money a purpose. Otherwise, you will blindly spend all of your money, thus continuing to live paycheck to paycheck wondering what is happening to your hard earned cash.
6. Build an Emergency Fund: Having money set aside for any kind of emergency will give you a sense of peace that you never knew you needed. In our home, we follow the 7 Baby Steps developed by Dave Ramsey. He recommends that you save $1,000 as an E-Fund while you are paying off debt and once you are debt free building up your emergency fund to be 3-6 months of your expenses. Our Emergency fund is our security blanket. Working from home has so many benefits, but it also has its downfalls. For example I have had a couple of months where I need some extra cash because I just haven’t made enough money (which is 100% my own fault for not focusing on money making projects and areas of my business) and we have had to dive into our emergency fund. When we have down this we just use the next month to build our E-Fund back up to $1,000.
7. Think About the Future: Living paycheck to paycheck for your entire life is a sure-fire way to set yourself up for failure. Do you want to retire? Do you want to be able to buy a house? Do you want to travel? Really think about what you want to do with your life. I can guarantee that you do not think “Gosh, I love living paycheck to paycheck and hope this never ends!” Picture how you want your life to look five years from now and set yourself up for success by creating a well thought out plan that can get you to your dream life that you want in five years.
8. Pay Off Debts: In my eyes, financial freedom and peace can truly be found when you are debt free. We are definitely not debt free, but we have a plan to be by December of 2019. When you pay off your debts that should give you a significant amount of money to play with in your budget. For example, when my husband and I pay off our student loan debt we will be giving ourselves around $1,500 a month to put towards other things, which is CRAZY. The less payments you have each month the higher your chances are to stop living paycheck to paycheck.
9. Cut Up Credit Cards: Credit cards cause so many people lot of problems. You may start out thinking that you will not abuse your card and you will pay it off at the end of every month, however, spending can get out of can control very quickly. Only spend money that you have and definitely DO NOT make purchases you cannot afford. Dave Ramsey says “If you cannot pay for it in cash, you can’t afford it!”
10. Make More Money: I feel like this one should go without saying. If you are barely getting by, you probably need to get another job, start a side hustle, or take on some more hours at your current job. The more money you make, the less stressed out you should be.
11. Get a Month Ahead: If you can find enough money in the budget to set aside and get yourself enough money to pay the next months bills, DO IT! Having money ready to go to pay the next months bills and get you through is LIFE CHANGING. Once you get a month ahead, just stay a month ahead. This will give you a great deal of comfort knowing that you are all set for this month and the upcoming month. (I have yet to do this, but it is my goal to become a month ahead on all of my bills by April this year!)
Let me know what you guys do to keep up with bills and any tips you may have that help you get away from the paycheck to paycheck lifestyle!