How to STOP Living Paycheck to Paycheck Without Losing Your Sanity!
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Budgets…BORING!!! Living paycheck to paycheck can be stressful.
I can’t tell you how many times I’ve tried to start a budget only to stick with for a week. Only to give up on it cuz I thought I didn’t have the time or it was too hard to stick to. But it doesn’t have to be difficult or time-consuming.
One of the ways to take the stress out of managing your money is to create a budget, but the hard part can be sticking to it. Once you have taken into account all of your expenses, it takes the stress out of figuring out what to do with each paycheck.
In this post, I’m going to share with you an overview as to how you can start saving and creating a budget to lower your money stressors. Don’t forget this can be easy, the most difficult part is sticking to it, like a financial diet .
TAKE A LOOK AT THE STEPS BELOW TO GET STARTED ON YOUR FINANCIAL DIET:
1. Time to weigh in…write down all of your normal monthly expenses.
Grab your pen and paper, take a seat (you might want to grab a drink first) and start writing down EVERYTHING! Make sure to include your monthly payments that are not debt (utilities, insurance, etc) and those that are debt-related (car payments, mortgage, student loans, etc). I know these can be difficult to look at, but bite the bullet and get down to it!
2. Don’t forget about those extra pounds…all those random and miscellaneous expenses.
There are two different categories for this. Those expenses that you actually have to have, like for groceries and those that you probably don’t need, like those random subscriptions that you never really use or could do without. When I did this I realized I was spending $3.15 each month for Amazon Freetime for one of my kid’s Kindles, which they never used. It’s not a lot but those little expenses can really add up. Dig into what you have and are spending money on, you might be surprised.
3. Now do the math, add up all those expenses.
Now you may need to stop here and get another drink…go ahead, I’ll wait.
Ok now get down to it. Add up all your expenses and subtract those from what your monthly income is. Hopefully, you have more income than expenses, if not you need to make a change, and quick! First go back and look at those miscellaneous expenses, what can you cut out without feeling deprived? When was the last time you used your gym membership, let’s be honest here! Can you carpool, shop for cheaper groceries, or cancel any random subscriptions you don’t really need or use?Hopefully you have more income than expenses if not, you need to make a change, and quick! Click To Tweet
Although I listen to Pandora pretty much all the time, and I hate the commercials, do I REALLY need to pay $5 a month for commercial free listening? NOPE-that’s what I use the mute button for.
We had a terrible problem with not meal planning and were always stopping somewhere last minute while we were running the kids to their different activities. Or I would make a meal and have leftovers that would go to waste (or to the dogs) due to poor planning. There is also that issue with running out of something and having to run to the store to get it, although I would at least try to tie this into another trip to save on gas. In order to avoid this, I started meal planning a lot better and making sure we always had snacks to bring along. If you want to learn more about meal planning and snack planning for a larger family you can check that out here.
Related Post: Related post: The 6 Most Effective Ways to Meal Plan
Now after you have trimmed the fat (like my diet analogies?) it’s time to start saving.
4. Time to save!
Once you have gone through all of your bills and random expenses and your income is MORE than your expenses, you are headed in the right direction. Now you have to figure out a system that you are comfortable with and can stick to long-term. Creating a system to help you save as much as you can, while living comfortably will help to end to paycheck to paycheck cycle. Whether you can save $5 a week or $5 a day, something is better than nothing!
SAVINGS SYSTEMS, WHICH ONE IS RIGHT FOR YOU?
The answer to this is…it depends.
No two families are the same and you aren’t going to have the same expenses as someone else reading this post. Ultimately, you need to find what is going to work for you. It’s ok if you don’t get it right the first time, there are no right answers right off the bat. Experiment and see what is easiest and practical for you.
It’s great to sit here and talk about savings plans in theory, but if you can’t practically implement it in your everyday life, it’s not going to work. Your goal may be to save $100 a week or $100 a month, if it puts too much of a strain on your expenses, don’t do it just because you think that is the right thing to do.
Start small and see what works. Maybe make your coffee at home and put that $5 a day you would spend at Starbucks into a jar on the counter. Saving a little at a time may take you longer to reach your goals, but at least you are saving!Many couples fight over money, which is completely unnecessary. Click To Tweet
HOW WE STOPPED LIVING PAYCHECK TO PAYCHECK
As a family of 6 living on one (consistent) income, it was very difficult for us to get started saving. Considering we were starting with a lot of debt and $0 in savings. Our first step was to build up a savings of $1000 so that we had an emergency fund. This took a bit, but after we cut out some expenses that we didn’t need our savings added up pretty quickly. Also, any income that I made from random side gigs, went into our savings, seeing my husband’s income covered out bills.
Feb 2018 Update: we are now a family of 8!
I have also heard people splitting up their income into different account, one to pay bills, one to put paychecks into, and then one for saving. This particular strategy didn’t work too well for us as my husband got paid bi-weekly and my income was inconsistent, so we just stuck to one main checking and a savings account.
The money went in, bills came out, some went to savings.
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To make things super easy and to start small we would take and create an automatic transfer of $5 per week to go into our savings. When we were comfortable with that we kept increasing that, $5 twice a week and eventually worked up to $5 per day. This was pretty easy as it came out automatically and we didn’t need to think about it.
We also started using the Acorns app. This gave us a way to start investing a little bit here and there without worrying about cutting into our other expenses. The Acorns app takes your everyday purchases and rounds them up. It then takes that change and invests it for you. So easy! I don’t even think about it anymore and we are slowly building our retirement nest egg.TRY THE ACORNS APP
Once we got a little more comfortable we implemented the strategy of pretending to live paycheck to paycheck, even though we actually weren’t. Seeing as how we were used to living paycheck to paycheck anyway, it didn’t seem much different to us. When you can take all of your “extra” income and put that into your savings or towards paying off debt all that “extra” income can add up pretty quickly.
Being on a budget shouldn’t feel like a restrictive diet! It should be empowering to know that you are working towards a better future! If your budget feels like a corset that’s been pulled too tight and isn’t leaving you room to breathe, reevaluate and see if you can move things around. One of the more creative things we did was volunteering for our kids’ activities to help cut some expense there. This may not be an option for everyone, but it did help us save a little. I mean we were there anyway why not help out and save some money in the process?
Dealing with finances can be super stressful and many couples fight over money, which is completely unnecessary.
DON’T LET MONEY RULE YOU!
Remember, money is money, you can always make more of it, save it, spend it, lose it. This is hard to comprehend when you have very little of it, but it’s true. Money isn’t everything! Don’t let it stress you out 24/7! Stress is bad for your health, and getting your health back on track is a lot more difficult.
Just take a minute and think about it. Will buying the latest 70” 4K LED Smart TV really going to make you that much happier? Or will being debt-free and taking your family on a fully paid vacation make you happier? You know, lifelong memories and all. I know which one I would choose.
Being smart with your money can help you to live within your means, whatever that may be. It will also help you understand what money really means to you. It is possible to get a lot further on less.
Hopefully, this post has given you some insight into how to handle your expenses. As well as some motivation to start saving and budgeting today. Let’s refer back to my diet analogies, the longer you stick with it the greater the results will be!
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Now for your input…
Tell me, how have you developed a savings plan? What worked for you and what didn’t?
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