Though millions of Americans live from paycheck to paycheck, there are several simple ways to break free from this desperate cycle. By carefully examining things like spending habits, priorities and other possible income opportunities, you could put an end to the dreaded paycheck-to-paycheck cycle and stop relying on car title loan for unexpected expenses. Let’s take a look at a few basic financial strategies you use to stretch those dollars further between paydays.
Pull up your account statement from your bank’s website and carefully study your spending activity. Divide your spending in two categories; wants and needs. You might notice that the things you’re spending your money on are heavier on the wants side than on things you actually need. Add up all the purchases from the wants category and you might be shocked to find how much extra money you’d have by exercising a little self-control and restraint.
Regardless of how tight your budget is, it is imperative to begin setting aside a portion of your earnings into savings, even if it is only $10 a week. If you don’t have a savings account, you can open one online or at your local bank branch. Most banks will allow existing customers to open up a savings account free of charge, as long as they have direct deposit in place.
Each time you get paid, make sure you’ve covered whatever bills are due that week, including groceries, gas and whatever else you might need to get you through until your next payday. If there’s anything left over, take a portion of it and roll it over into your savings account without running your checking account dry. You should repeat this for every single paycheck. After a few years have passed, you’ll be surprised to see how much money you can save.
Establishing and adhering to a budget is imperative for breaking free from the cycle of living paycheck to paycheck. Whatever money you have leftover in your checking account after paying your bills and adding to your savings should be accounted for.
Allow yourself to spend up to a certain amount per week on things you want or enjoy. By doing this, you’ll be more frugal with your spending and not make purchases you don’t need. More importantly, you will appreciate the things you do splurge on even more.
Making changes your current lifestyle will help you accomplish this with ease. For example, cooking at home rather than dining out is smart and easy to stay within your budget. Also, staying home to stream something on Netflix instead of going out to a movie is another great way to save money.
On top of saving and budgeting, you could also try to increase your income by taking advantage of part-time job opportunities in your area. Checking sites like Indeed.com and Monster.com can help you find a second job near you in a matter of minutes. Devote the entirety of this income to grow your savings even faster.
You don’t have to work two jobs forever, just long enough to have a decent savings account built up. Once you have a $7,000 - $10,00 cushion saved, you can go back to just working your regular job. It’s more work in the short-term, but it’s certainly worth it to break loose from the uncertainty of living paycheck-to-paycheck.