Getting by paycheck to paycheck is not a fun way to live, nor can you really expect to change your situation, unless you adopt some new and smarter ways of dealing with money. When it comes to personal finance, let logic rule and learn to live by simple rules that will really help you end the paycheck to paycheck cycle of doom.
1. Spend less than you earn. This may sound simple enough, but most people don’t do it. Figure out what you are making and cut spending so that you are not in the red every month. Interest and penalties add up to a whole lot of money, once you’re finished paying through credit or past due.
2. Pay yourself first. Chances are good that if you leave all of your earnings in the same account you use to pay bills, you will find some way to spend it all. Set yourself up with an exclusive savings account that is strictly for you and keep adding to it with every paycheck.
3. Establish an emergency fund. This can be difficult when you are barely getting by, but start small with modest deposits. The money will eventually add up and you can use it to avoid paying a bill late or other emergency expense like your car breaking down. This fund will also give your financial self-esteem a much needed boost.
4. Write up a budget. List everything you earn and everything you need to buy and try and limit your cash flow to only those purchases. Frivolous spending really adds up, especially if you’re not keeping track of it. Create a strict budget and exercise some self-discipline; it’s the only way you’re going to work your way out.
5. Review your cell phone plan and cable bill. Figure out all the extra things you are paying out for but don’t use. Premium channels cost a small fortune, so does having unlimited everything on your phone. Trim down these expenses to the bare minimum and use the savings wisely.
6. Don’t buy into advertising hype. Most ads try and convince you that you really “must” have some item, when in fact, you don’t. Even though you may see everyone you know rushing out to get their hands on this hot new gadget or cool new product, resist! Just sift through your closet or “junk” drawer and see all the things you’ve already bought that you rarely (if ever) get any use out of.
7. Supplement your primary income. Even if you just get a temporary position that brings in a few extra hundred dollars for a few weeks, having a second job is a fast shot in the arm financially. If possible, get something permanent that will fit into your lifestyle and schedule and make it a part of your economic recovery. You can quickly pay off high-interest loans and credit cards, and then start building a nice nest-egg for yourself and/or family. It’s worth putting in the extra hours in exchange for the enormous reduction in stress that you have to endure!
There really is no in-between with money; you either have enough of it or you don’t. Adopt these personal finance measures in your own life, and finally take control of where you are headed.