Payday comes not a moment too soon. Now you can pay off your bills, fill your fridge with food, and treat your friends to a few drinks during happy hour. Next thing you know, you’re pinching pennies until next payday, another two weeks away.
Does this sound familiar?
In an ordinary month, this might not sound so bad. You’ve paid your bills and put food on the table, after all, so what’s the problem?
Why Living Paycheck to Paycheck is Risky
If you live paycheck to paycheck, you might have enough money to keep you afloat month to month. But with every last dollar getting used up, you don’t have any money left over for other things.
This habit leaves your finances vulnerable to any expense that you didn’t think to include in your budget — something like a dead car battery, an urgent trip to the walk-in clinic, or a plumbing emergency. Just one of these unexpected expenses could throw you into a tailspin.
What can you do if you’re experiencing this emergency right now? You can put your unexpected expense on a credit card or apply for a cash loan online if you’ve maxed those cards out.
If you’re wondering, “where can I find quick cash loans near me?” go online. It’s the easiest way to compare rates and terms from multiple online direct lenders. You won’t have to go into a storefront bank or book time off work to make it to a mid-day appointment with a financial advisor.
How Can You Start Saving More & Borrowing Less?
Credit cards and cash loans online are safety nets when you fall short of what you need in extraordinary circumstances. Unfortunately, you’ll never prepared for the unexpected until you start saving.
Here are 4 tips to help you get started.
Tip #1: Build a Budget
It’s easy to start living paycheck to paycheck if you don’t have a budget. Without a budget, you won’t know your spending priorities, so you might accidentally spend your money on things that don’t matter.
Your priorities include the necessary bills you need to run your household (rent, utilities, car payments, phone bills, groceries, etc.) and savings. According to Elizabeth Warren, former Democratic presidential candidate and US Senator, you should spend roughly 50% of your take-home pay on bills and 20% on savings.
Tip #2: Track Your Non-Essential Spending
50% and 20% only make 70%. The remaining 30% in Warren’s plan goes towards all the fun things in life. If you’re living paycheck to paycheck, there’s a good chance these frills take up more than their fair share. You’ll have to slash this spending until you can unearth cash you can squirrel away for the future.
Tip #3: Earn More Money
The stark reality for a lot of people is that they aren’t wasting their money on the fun things. All your money goes to making ends meet, so there’s nothing in your budget you can cut.
In that case, it’s time to consider changing careers or getting a second job. Ask for a promotion or pick up a side hustle to add another stream of income.
Tip #4: Learn How to Negotiate
Another great way to stretch your paycheck is learning how to negotiate. Call up each utility provider, Internet and phone company, and insurance agency to discuss your plans. They may be able to offer you a better deal than what you’re already paying.
When credit cards and cash loans online give only temporary relief, living paycheck to paycheck isn’t sustainable. Something needs to change, so try out these tips.