We have all been there, living paycheck to paycheck, and the cycle is hard to break. Life is expensive and sometimes it feels like there is always something to pay for! Your not alone, but there are ways out.
Stop living paycheck to paycheck this year!
Sometimes the hardest thing about saving money is just getting started. Remember that saving money doesn’t happen overnight, it takes time. But in the end, it will be totally worth it! This step by step guide will help you save up to a grand a month, and end the cycle of living paycheck to paycheck.
1. Start a budget. I know you’ve heard it before, make a budget. But have you actually tried and used it? Budgets work! Write a list of all your expenses, everything from groceries, gas, insurance, mortgage, to coffee breaks and dinners out. Don’t forget to include expenses that don’t occur every month, such as your car registration and maintenance. Your budget should compare how much you are spending, verses your income.
2. Plan to save money. Now that you have a budget, add in a savings category. Try to save $1,000 a month, if your expenses are too high and you can’t afford a grand, it might be time to cut back. Take a good hard look at unnecessary expenses such as eating out and entertainment. Bring home lunch! You would be surprised at how much money you can spend on eating out for lunch, or buying coffee and breakfast.
3. Give yourself a cash allowance. This is key to saving a grand a month! Instead of using your debit card for buying coffee or grabbing a sandwich, try giving yourself a cash allowance per week. This allowance can be whatever you can afford to spend, while saving of course. For example, you can give yourself $200 per week, and this is all you can use for non-essentials. Non-essentials include purchases that are not necessary. Ie: dinners out, coffee breaks, that cute little tank top you don’t really need, you get the picture. You would be surprised at how conscious you will be at spending, when you are paying cash with your allowance.
4. Make your savings automatic. Automatic transfers are the best way to save, since you don’t have to think about the money and be tempted to spend it. Almost every bank offers automatic transfers between checking and savings accounts. Choose a savings plan that offers a high interest rate. There are a ton of saving plans out there that start out with 1.0% interest. One of our favorites is ally.com , currently they are offering 1.45% annual percentage yield to all savings accounts.
5. Don’t get discouraged. When your having trouble saving money, your situation may seem hopeless. But don’t be discouraged, if you fall short of your goal one month, try try again the next. It takes time to get to financial security and meet your long term goals. By following these simple steps you can be free of living paycheck to paycheck.
I would love to hear how you have saved money, please comment below.
