Have you fallen into the trap of living paycheck to paycheck?
Maybe it happened gradually as you added debts or other expenses to your budget until you could no longer live comfortably, or perhaps you’ve always struggled. No matter why you’re living paycheck to paycheck, these tips can help you break out of the cycle.
Check Your Tax Withholdings
If your income is low enough, you may be paying more in taxes every pay period than you need to be. Sure, getting a nice tax refund every year is nice, but that’s money you’re loaning to the government for free! Putting more of that money in your pocket can help you get out of the cycle of living paycheck to paycheck. Check with your human resources professional to see if you can pay less in taxes each paycheck and still come out ahead.
Also Read Top 10 Habits of Frugal People
Get Rid of Non-Essentials
Cable, going out to eat, and buying coffee are all fun, but they’re not necessary if you’re scraping by. Give yourself a visual reminder of why you’re cancelling or avoiding these luxuries. If you cancel cable, take the money that you would spend on your bill every month and put it in a savings account where you can watch it grow. If you decide to make coffee at home or have dinner at home rather than go out, put that money into a jar and watch it fill up.
No one wants to work more than they have to forever, but anyone can dedicate themselves to doing a little bit more for a short period of time. Commit to working an extra shift at work each week, pick up a fitness class you can teach, or find a part-time job that you can hold onto for six months. Use this money to pad your account and get back into a comfortable budget.
Also Read: Three Things to Do Right Now to Improve Your Finances
These tips can help you avoid the stress of living paycheck to paycheck while improving your financial security! If you’ve broken out of this pattern, how did you do it?
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Judy Gregory says