The advice in this column is pretty much the same as already even in how to live within your means. It is astounding how many people will reports that they are living Paycheck to Paycheck. You know you are living Paycheck to Paycheck when yourself under a constant stress of money shortage. You seem to be always on the brink of running short of money and borrowing. Any little expense that comes as a surprise will force you to rely on credit such as credit cards, payday loans or cash advances.
The problem with living Paycheck to Paycheck is that any little expense can put you under debt. Any extra expense that you need to make in a month will force you to borrow on your credit card or from other sources. Since you have spent extra in a month your next month’s income will not be enough to cover the extra charges that you have undertaken in the previous month. Which means that in order to repay the previous debt you will find yourself taking more under debt. This can be a cycle that spirals downwards and goes quickly out of control. Soon you find yourself in a place where your credit rating is trashed and you are deeply under debt with no idea how to repay it.
How to stop living Paycheck to Paycheck
The very first thing that you will need to do is try and figure out some way to cut down on existing expenses. You need to sit down and make a financial budget and compare it to your current income. Cut down on the items that are not essential and try to save some extra money. Making a budget allows you to see your expenses before actually spending them. Making a budget will be able to predict how you’re going to manage the month on your income. It will also provide an excellent insight into what expenses can be reduced.
Stop using credit cards to make general expense such as groceries, gas etc. You will spend much less if you go with a fixed budget in mind and use a certain amount of available cash to make your purchases every month. Credit card will allow you to shop for extra because it will have a higher credit limit.
If you find that even after budgeting you are tending to strain your finances resources then it is time to track back the spending that you have made. Carefully review where the money has been spent and see if anything could have been avoided or if expense on something can be reduced.
You should also consider increasing your income by working overtime or getting a second job. You can also figure out something to do over the weekends that will help you supplement your income.
You’ll be surprised at the amount of money that can be spent casually without thinking. Just the habit of buying a cup of coffee every now and then can cost you in tunes of hundreds of dollars every month. You might need to give consideration to your spending habits and change your attitude towards money. Avoiding expenses that seem innocuous when you make them can make a lot of difference to the overall total monthly budget.