It’s not easy to get off the paycheck to paycheck cycle. It takes diligence, motivation and effort to make it work but it’s very rewarding and satisfying to do. Here’s our simple method of living with what you make until you can move up or out to a better job situation.
First things first, what’s your income?
Knowing what you have coming in is going to determine what you can allow to go out so get this assessment done first. Your job is obviously number one but what other sources do you have? Every side gig you have needs to be accounted for so you can have a clear vision of your income vs expenses.
Next up, what do you spend?
There are lots of ways to track spending such as apps, notebooks, taking photos of receipts or keeping a folder or small pouch to hold receipts. Whatever method works for you, this is necessary to know where your money is going so you can focus on where you can cut back.
We suggest you keep your categories simple so as to not get bogged down in budgeting. Rent, school, home, car/transportation, food and entertainment are basics that should be included.
A good way to stay on top of it is to set a reminder for yourself to assess your spending budget once a week at the same time every week to keep yourself within your means.
What do you need and what do you want?
Before you make a purchase, ask yourself if you really need it. If it is not a need, wait before you buy it by using the 48-hour rule. If you see something you want to buy but don’t think you absolutely need, wait 48 hours before buying it. You might find that, more often than not, you change your mind.
Forget everyone else, focus on you.
Don’t fall victim to the keeping up with the Joneses mentality. People on Instagram might seem like they have it all, but that doesn’t mean it’s the truth or that you have to try to keep up with that faux life.
That blogger might have taken a loan out for the Mercedes, put the new flat screen on a credit card, or taken out a personal loan to pay for a vacation.
Here is a way to visualize what you see on social media: do you roll out of bed with a beautiful outfit, hair done, fresh breath, and the glowing skin game for miles? No, you get up, take some time to get yourself ready for the outside world and then you go present yourself to other humans. The life you see on Instagram is exactly what it says, an instant. Don’t fall for it.
Sometimes living within your means might not be as glamorous, but you will be much better off in the long term. You can also have fun on social media showing people all the creative ways you find to save.
Don’t buy it until you can afford it
Instant gratification is a common trap that most of us fall for because that’s how things have been marketed to us. A useful thought process might be to think about how many hours you will have to work to pay off your debt to afford this temporarily gratifying thing.
If you don’t have the cash to pay off your card immediately, you might start racking up interest payments. Don’t fall prey to credit card debt. If you have already gotten yourself in a little more credit card debt than you can handle. Getting a personal loan at a lower rate can help keep the balance from quickly getting out of control. We offer personal loans at rates as low as a third of some credit card APRs.
If you can’t afford to buy something now, don’t reflexively pull out the plastic. Instead, save up be sure that you can afford it in cash — it’s a huge part of being financially independent.
Save every opportunity you get
Saving money will help you stop overextending yourself financially. Give these suggestions some thought to get started:
- Never walk into the grocery store unprepared. Before you shop, be sure to pay attention to which items are on sale, or which items you can buy in bulk to save. Use a shopping list — it’s all too easy to give in to impulse purchases but we’re not doing that anymore. Stick to your list and save.
- Track your hobby spending. Decide exactly how much a month you want to spend on your hobbies, like concerts or plants, and stick to that budget.
- Bring lunch to work. Give meal planning a try where you take one day a week to make meals and put them in grab and go containers for you to eat on all week.
- Buy secondhand. You can find incredible deals at garage sales, thrift shops and online second-hand retailers.
- Open a high-yield savings account. You can possibly find a financial institution offering higher rates on CD specials. The money is tied up for a term you select but it’s a great way to save plus it’s safe!
Cut down your expenses.
If you’re still struggling to live within your means, take a hard look at your expenses. There is probably something you can cut out or at least cut down on.
- Gym membershipsThere are tons of ways to workout at home with nothing more than a yoga mat or a towel! Use YouTube and Pinterest to find all the workouts you need to get that beach bod.
- Nail salons
Do your own at home, you might not be great at it at first, but you’ll get the hang of it. Maybe do your own for a few months, then treat yourself to a manicure once your budget is lined out. It will be so much more satisfying that way.
- Cell phone bills
It never hurts to take a look here and see how much data you really use. There are ways to cut back your data usage and live with a smaller amount. Get used to asking for a WIFI password everywhere you go and find games and books that don’t require constant data for when you are in places that don’t offer free WIFI. Just be careful when using free WIFI and keep your confidential info safe. Love My CU Rewards with Solidarity has a special offer with Sprint.
- Shopping trips
Shopping is NOT therapy and shouldn’t be done when hungry or emotional. Have a list and stick to it.
Learning to be financially conscious is tough and it takes some creativity to manage to life within what we make. Some of these suggestions will work for you and some will not but what matters is that you carefully consider them so you can figure out a budget and lifestyle that fits for you. Open a Savings or CD with Solidarity today. Check out the current interest rates.