3 Tips To Help You Stop Living Paycheck To Paycheck
Posted on: 23 February 2015
According to CNN, 76% of Americans live paycheck to paycheck. If you are stuck in this trap, there are ways to get out, but you will need to make some changes with the ways you handle your money. The problem with living paycheck to paycheck is that you could end up in financial trouble each time an unexpected expense comes up. Taking cash advance loans is a great way to get through these times, but these loans do not solve the root problem. Here are three tips that may help you break this cycle you are in.
"Pretend" You Earn Less
One great routine to get into to help you break the cycle of living paycheck to paycheck is pretending you earn less than you do. This task alone could help you learn how to save money because you will not be able to spend as much.
For example, if you make $500 per week, pretend you make $475. Write the difference of $25 in your checkbook as a withdrawal and subtract it from your balance. You may be surprised to find out that your life is not really affected by this habit, and after just four weeks you will have $100 saved.
The downside to this is that it may be hard to balance your checkbook because of these transactions. If you find that this is too hard, try another method.
Start a Savings Account
If you shop around for savings accounts, you may be able to find one that offers a bonus to you simply for opening the account. Many banks offer bonuses like this, but each bank may have certain requirements for earning the bonus. Always make sure you fully understand how it works before signing up, and you may want to consider opening an online bank account instead of one at a bank in your town.
Saving money in an online bank account could be beneficial because you cannot just go to the bank to make a withdrawal. In most cases, online accounts require you to request a deposit. The deposit will be placed in your checking account; however, it may take several days for this to happen.
If you really need cash, you might not have several days to wait. Because of this, you might be less likely to take withdrawals from the account. If you are really in a bind and need cash as soon as possible, you could instead apply for a cash advance loan.
When you open a savings account, keep in mind that you do not necessarily have to open it with a large balance. Some banks may allow you to open an account with as little as $25. If you can do this and begin depositing just $5 or $10 each week, it will start to add up.
Analyze your Budget
The final step that could help you break the paycheck to paycheck lifestyle is to thoroughly analyze your budget. Take a good look at every single bill you have and determine if there are ways to reduce any of them. If you can reduce your normal bills by $50 or $100 and begin saving an additional $10 in your savings account, you will eventually be able to change the way you live.
You will no longer have to live paycheck to paycheck, and you may begin to need cash advance loans less often.
You can take control over your finances, but it will require discipline and changes. It will also take time to develop a strategy that works for you. During this time, you can apply for cash advance loans if you need them because these will help you pay those unexpected bills when they come up.
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