How to stop living paycheque to paycheque

How to stop living paycheque to paycheque

Despite your best intentions, are your coffers always dry at the end of the month? With the high cost of living, it can be hard- even impossible-to get ahead if you are living paycheque to paycheque.

Sick of the cycle? Develop a plan to stop living paycheque to paycheque.

Get a budget

If you haven’t established a household budget, that may very well be why money is tight. You’ve got to plan your spending based on what you can afford. Similarly, if you aren’t tracking your spending, how will you really know where your money is going until it is gone?

Set up a detailed budget that helps you hone in on your spending

Fixed expenses. Can you afford your lifestyle?

When trying to get your dollars to go further, the natural place to start is by slashing all unnecessary spending- like entertainment, dining out and the like.

But what if your fixed expenses are taking an unreasonable chunk out of your income every month? How much is your mortgage or rent payment? How about car payment? It’s possible that you’ve taken on too much car or too much house based on your income, which will perpetually keep you stretched mighty thin.

It is worthwhile to consider downsizing your home or downgrading your car.

Make savings automatic, but not accessible

Savings is an essential component to your financial health and is particularly important in keeping out of debt. Having cash savings on hand in an emergency means that you don’t have to turn to debt to cover costs.

The problem is that if your savings is too easily accessible, you may be tempted to spend it on something that it’s not intended for, eliminating your financial safety net.

Use raises and bonuses to build up savings/pay down debt

If you receive a raise, don’t raise your standard of living too. Bank the difference and you’ll come out ahead. The same goes for your bonuses. Don’t treat them as “mad money”, but as a way to inject a lump sum onto your debt or into your savings.