How To Stop Living Paycheck to Paycheck
Finding it a bit tough to stretch your budget until the next payday? You’re not alone. According to a recent survey, 63 percent of Americans have been living paycheck-to-paycheck since COVID-19 first arrived. What was once a problem for some of us is now an issue that the majority has to address.
Fortunately, there are some ways to turn things around. It’s never too late to start improving your financial wellness, after all. Here are some tips to help you stop living paycheck to paycheck:
Create a Budget
You wouldn’t try to build an item from IKEA without the instructions, would you? So why would you try to get your finances on track without a plan? Start your journey by creating a budget. If you’re not sure about what budget to choose, there are a variety of financial wellness apps and articles on the internet that will help you out.
The 50/30/20 rule is a good start:
- 50 percent of your income goes to needs
- 30 percent of your income goes to wants
- 20 percent of your income goes to savings and paying down debts.
Separate Wants and Needs
How do you know what’s a need and what’s a want? Create a list and organize it according to your priorities. Food and lodging? Those are definitely needs. The newest smartphone? That’s more of a want (for most people). Create a priority list that separates wants and needs, then follow the 50/30/20 rule for budgeting.
Pay Down Debt (When You Can)
As hinted at above, you want to pay down any debt when you can. If you’re saving 20 percent of your income to save or pay down debt, this will go away quicker than you might think. Whether its credit card debt or a school loan, you want to start paying down these debts while avoiding adding new debts. Pay them off from smallest to largest, if that helps.
Get a Side Gig
Most people can benefit from a side gig, since many of us have more skills than we might think! For example, a marketing professional can deliver pizza on the weekends, or write freelance articles for a topic they’re interested in. Adding just $50 more each week to your budget can go a long way, as that’s potentially enough to cover your lunches for a week.