Survival Strategies: Living paycheck to paycheck

Survival Strategies: Living paycheck to paycheck

SHREVEPORT, LA (KSLA) - You’re not alone when it comes down to counting down the days until your next paycheck. It can be a stressful cycle, but it’s far too common. According to the, American Psychological Association (APA), financial stress is the top cause of stress for Americans.

In a CareerBuilder survey, it’s reported that nearly 80% of American workers say they’re living paycheck-to-paycheck. Having a larger salary doesn’t necessarily leave you free from money problems. In that same survey, it’s reported that nearly one in 10 workers making $100,000 or more say they usually or always live paycheck-to-paycheck.

What does it mean to live from paycheck-to-paycheck?

It’s a situation when an individual must meet all financial obligations, such as childcare, bills, health insurance, etc., with their current pay from one pay cycle to the next.

Many experts suggest having an emergency fund of six month’s pay set aside in case something unpredictable happens, such as a layoff, or major medical expense or like we’re seeing now with the partial government shutdown, a furlough. For more than half of us, saving a cushion for a rainy day is just not that easy. The CareerBuilder survey says about 56% of us can barely save $100 per month.

The paycheck-to-paycheck cycle is an easy one to fall into and a hard one to break, here are some ideas that could help:

  • Pay yourself first. Yes, It may seem unrealistic to talk about paying yourself first when you’re faced with so many other financial obligations like your rent, car note, electric bill, groceries, etc.  Yes, it’s very important to pay all your bills on time but remember, planning for your future can’t always take the back seat; small amounts matter too. 
  • Create a monthly budget and track your spending. If you want to have money left over from your paycheck, you need to track everything you spend. There are tons of apps you can use as a tool to get started. 
  • Stop worrying about your self-image. According to the Penny Hoarder, when you obsess about looking successful, you risk living a lifestyle you can’t afford. Focus on yourself and your goals.
  • Learn to say ‘no’ whenever someone pressures you to overspend or distract you from meeting your goals. 
  • Set up automated savings. Automation is your friend when it comes to saving money. You’ll be less tempted to spend money when you save it before you have the chance to touch it.
  • Find ways to earn more money. Often times budgeting is not enough. If you need to make more money, consider getting a a side hustle, such as driving for Uber or Lyft, grocery delivery, taking online surveys, and more. The Penny Hoarder lists side gigs daily. 
  • Focus on you and how you want to set up your life for the future. Try to be ready for unforeseen circumstances.

More savings tips:

  • The $5 challenge:  Whenever a $5 bill comes into your possession, put it aside into a special jar or envelope. By the end of the year, you might be surprised by how many $5 bills you’ll have saved. 
  • 52-week money challenge: You save $1 at the end of the first week and then increase that amount by $1 each week. At the end of the second week, you put $2 into savings. Then $3 after week three and so on until week 52, when you save $52. If you stick with it for the full year, you’ll have saved $1,378 at the end of the challenge. 
  • Save your loose change. Putting aside just 50¢ over a year will get you 40% of the way to a $500 emergency fund.
  • Take full advantage of employer matches to your retirement plan. Often as an incentive, employers will match a certain amount of what you save in a retirement plan such as a 401(k). If you don’t take full advantage of this match, you’re leaving money on the table. 
  • Use the 24 hour rule. This rules helps avoid purchasing expensive or unnecessary items on impulse. Think over each nonessential purchase for at least 24 hours. 
  • Brown bag your lunch. If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over. Patterns = Habits = Lifestyle

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