Money management isn’t the most fun course to study. Unfortunately, many of us are at the mercy of monthly paychecks from our employers and it is quite frustrating to not be able to make ends meet from the paltry sum called salary. Now, we are forced to seek out solutions from old textbooks on ways to manage money and cut down on expenses with the hope that there would be no emergency that could selfishly demand huge lumps of money.
Indeed, the more effort to keep some money as leftovers, the more frustrating it becomes. You stumbled upon this blog post and wanted to scan past it, but you remembered it is almost the end of the month: you intend to break the chain of poverty while living in plenty. Hey! you are at the right spot. In this blog post, we’ll be sharing with you, How To Stop Living From Paycheck To Paycheck.
- Draw a budget for your expenses
Buying and spending make up the list of expenses, situations that cannot be avoided, no matter how hard one tries. In the midst of the demands to live as a normal human being who has needs and wants, don’t forget that the money to satisfy those is scarce, including your paycheck. Carelessly making expenses without keeping track of what should be bought, and the amount of money expected to remain can actually keep one trapped in the mess of trying to scrap off money to barely survive on. For a budget to work, all your monthly expenses, the insignificant inclusive, must be reflected in the plan. By so doing, you dwell in financial awareness, and can only indulge in frivolities when you’re sure you have much to spare after the needed expenses in taxes, insurance premiums, tuition fees, and other hair-raising expenses have been met.
- Monitor your spending habit
Though quite annoying to do, much of living in plenty lies in carefully monitoring your daily and weekly outflow of money, in cash or with the use of your credit card. It is your life to live as you please, but then, when financial crises arise, many can go down with you. By keeping track of your regular expenses, you are able to notice the irrelevancies that you should do away with. You can mark out a particular amount to spend on food items for a given week, and rather than deleting many needed expenses at a go, you could try cutting back by a little amount of money. It is a challenge to decide to spend lesser than your usual weekly budget. Additionally, you can prioritize or rank your expenses, from the most important to the least important. In Economics, it is termed the scale of preference. You will be able to determine what is very necessary to spend your money on, and what can be adjusted without affecting your life drastically. Before you know it, you will be left with some money that can be saved as an emergency fund.
- Automate your savings
You have a budget and track your expenses. Another conscious action to take in being free from financial struggles while earning is to save properly. That is not limited to the leftovers from your spending, but saving for the future. The future for you may be for a house building project, business, tuition, or for your retirement. You can open an interest-yielding account different from your salary account, in a different bank, to transfer a particular percentage of money automatically into it once you get paid every month. Having a pension account with any reputable pension administrator can help you save up for your retirement. To grow your emergency fund, you can pledge 10 or 20% of your monthly income. Ensure you will not be taking it from your savings account. If such could be the case, have a savings account that wouldn’t give you a debit card, and with a bank whose distance is quite far from your place of residence. Your allowances and bonuses can be saved as emergency funds; don’t make long-term plans on your allowances and bonuses since they are bound to change as a result of ever-changing policies.
- Stay out of debt
It will be impossible to stay on top of your game in savings if you are shoulder-deep in debt. First, save up to pay off your past debts. Secondly, do not push yourself into any new debt by taking out loans from the bank, or by using your credit card to make unnecessary purchases, no matter how tempting it becomes. In order to manage your debts, you can take up a part-time job that can solely take care of the debts. Until you are debt-free, you may not be able to save meaningfully.
- Be accountable to someone
Alone, you may pull through. However, it is often advised that you get someone, possibly your significant other, a financial advisor, or a trusted friend who will hold you accountable if you ever derail in your money-saving journey. It takes a lot of discipline and focus to achieve financial freedom. More so, you need all the encouragement you can get from them, as it is not an easy task moving from being a spendthrift to a prudent manager.
To be at rest in your financial state of mind, you have to live above scraping from paycheck to paycheck by drawing a budget plan for your expenses, monitoring your spending habit; befriending proper saving methods, staying out of debt, and being accountable to someone.
Thank you