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Thread: How To Stop Living Paycheck To Paycheck

  1. #1
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    How To Stop Living Paycheck To Paycheck

    More than three quarters of full-time workers live paycheck to paycheck. Here’s how to break the cycle and improve your financial outlook.
    Payday is cool, but it’s disheartening to look at your bank account only to see you’re in the same place you were two weeks ago. Living from one paycheck to the next makes peace of mind an elusive goal. Some 78 percent of American full-time workers live this way, spending all of each paycheck, according to a 2017 survey by CareerBuilder. While many of us have assets such as our own homes or retirement accounts, we have little or no extra cash on hand.

    From a financial perspective, living from paycheck to paycheck is disastrous, “and it’s not stable from an emotional standpoint, either,” says Kathryn Garrison, senior financial adviser at Moss Adams Wealth Advisors. “Debt has a way of snowballing and your stress snowballs right along with it.”

    It’s time to break the cycle — now. Here are six ways to do just that.

    Stop Living Paycheck to Paycheck
    Pretend You Earn Less Than You Do
    Create a Budget
    Build an Emergency Fund
    Consider Downsizing
    Pay Down Debt
    Don’t Forget Your Future

    PRETEND YOU EARN LESS THAN YOU DO
    While it may be easier said than done, simply committing to live on less than you earn is the first step toward breaking the hand-to-mouth cycle. If you just spend less than you earn after taxes, you will have “a budget surplus,” Garrison says.

    Once you start having money left in the bank at the end of every pay cycle, you’ll begin to feel a little freer. You can begin stashing away some savings so you’re prepared to handle the inevitable rainy day.

    “Living slightly below your means and having an emergency fund set aside prevent that cycle from starting and will give you a surprising amount of peace of mind,” Garrison says. (Start small but aim to eventually set aside at least 10 percent of your paycheck. Setting up automatic transfers to your savings from each is often the easiest way to stick with it.)

    CREATE A BUDGET
    To live below your means, you must know where your money’s going. Start by creating a realistic budget if you don’t have one already. Try Google Docs (it’s free), which allows you to create a spreadsheet and share it with other spenders and contributors to your household income.

    In addition to Google Docs or a simple Excel spreadsheet, more sophisticated online budgeting tools like Mint.com will pull in all your financial information and send you alerts and notices, and “they can make budgeting a rather cool exercise,” Garrison says.

    BUILD AN EMERGENCY FUND
    Even if you start very small, it’s vital to begin setting aside savings to build up an emergency fund. Review your budget and break it down into nondiscretionary and discretionary expenses, Garrison says. Nondiscretionary expenses include rent or mortgage, groceries, utility bills and insurance payments. Discretionary spending includes eating out, entertainment, clothes and shoes.

    Once you’ve broken down your spending into categories, cut some of that discretionary — even if it’s only $100 per month — and set it aside in savings, Garrison says.

    “Be realistic about what you can cut so you don’t get discouraged, and start small if you have to. If you haven’t been budgeting, you may be surprised at where your money is going and that in itself may be enough to help you curtail your spending.”
    https://www.hermoney.com/save/budget...k-to-paycheck/

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    Throw away those credit cards.
    Don't buy anything you don't need.
    Start saving
    I'm old school, it worked for me. I'm retired and have no financial worries.

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    How To Stop Living Paycheck To Paycheck
    Give up work

    Otherwise I agree with schwab, who is in a far more sensible mood than me this evening

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