It's easy to find yourself living paycheck to paycheck. Following a few simple strategies can help redirect finances in the right direction.
It happens every week. Payday comes and goes and within a few short days, you’re busted again. You make a good living, but seem to live check to check. To make matters worse, you end up dipping into savings from time to time until what little you had socked away is gone. It’s a common situation. But with a little discipline and determination you can turn your finances around.
Make a Plan
You wouldn’t take off on a road trip to a new destination without a road map, so take this approach with your finances. Schedule time monthly, even weekly, and review both income and expenses. Plan how each paycheck will be spent. This will keep you focused and help eliminate impulse spending.
Pay Yourself First
Rule number one: don’t spend it all. Plan to set aside a set amount, even if it’s ten dollars, each and every paycheck. Get into the habit of regular savings and as your money grows, so will your willingness to save. Take advantage of automatic payroll deduction through your financial institution, which automatically transfers a specified amount of money from your paycheck into a separate savings account. If you save automatically by paying yourself first, chances are you won’t even miss the money.
Cut up the Cards
Continuing to use credit will keep you in eternal debt, because even if you make your monthly payment religiously, most of your money is going towards high interest rates. Close your accounts, cut up your cards, and start paying more than the minimum balance, which will likely save you hundreds of dollars in interest in the long run.
Don’t Bank on Bonuses or Tax Returns
Try to avoid using bonuses and tax returns to catch up at the end of the year and get out of financial trouble or pay off big expenses. If it’s not regular income, don’t count on it. Plan as if you won’t be getting that extra cash. But then when you do, you can put it into savings, a mutual fund, or even a large splurge for yourself.
Keep the Change
Toss your leftover change in a jar or container each day when you come home. Every few months, take the money to your financial institution and cash it in. You’ll be surprised at how quickly it adds up. Put the money toward debt or an emergency fund. Even better, if your emergency fund is built up and you have paid off debt, use the money to reward yourself for your savvy spending habits.
