Do you sometimes feel like you are robbing Peter to pay Paul? Have you ever felt like there was more month than money? You are probably tired of spinning your wheels, falling behind on bills, and feeling like it is almost impossible for you to save money because you are living paycheck to paycheck.
If you are frustrated with being frustrated and are looking for ways to break the cycle, here are some ideas:
Give Your Money a Job
You work hard for your money, right? Most people do. Doesn’t it make sense to have your money ALWAYS working for you too? It’s time to start knowing where your money is going at all times and give your money a job.
One of the most commonly untracked expenses is food. Each month, set a limit on how much you will spend on food. If your food allowance for the month is $300, then stick to it. Do not look to your checking account balance for approval on going out to eat; just because there’s money in your account, it doesn’t mean that you have to spend it. Refer to your $300 monthly food allocation, and see if there’s enough to go out that evening.
One of the easiest ways to manage your food expenses is to withdraw a set amount of cash from the ATM each paycheck, based on your spending plan. Get a nice envelope to store your cash and keep it in your wallet. Every time you purchase some sort of food or beverage, only use the cash that you set aside. You may find that three days before your next paycheck, there’s only $10 in your envelope, but that just means it’s time to look in the refrigerator and get creative for the next few days.
Prioritize Your Spending
As you begin assigning jobs for your money, you will find that some transactions do not align with your monthly spending plan. You may find yourself spending money just because you can see it or even out of boredom. Well, now’s the time to cut back on the unnecessary spending.
You can cut back on your expenses for shopping at stores like Target or Walmart. It’s perfectly fine to grab that one item you need, but oftentimes, we also end up buying eight or nine additional items that were not on your original list. Ask yourself, “If my income was cut in half this month, would this be something I would still need to purchase now, or can this wait until later?”
Other expenses that you can cut back on when you “only” spend $15 per day on lunch at work or during happy hour; “only” is really just a word we psychologically use to justify our bad spending habits. So, only spending $15 per day for more than half the week, causes you to spend almost $3,000 per a year. It’s only $3,000 that you probably didn’t need, right?
Oftentimes, what we buy are items that do not align with our long-term and short-term goals. Focusing on the goal is the only way we’ll score in life. Remind yourself of what’s important and prioritize what is a need, versus what is a want.
Bring in Some Extra Income
Finally, start looking to generate more cash flow. However, you should not begin focusing on making more money, until you are able to maintain the money you already have. Make sure that each dollar you bring in has a job assigned to it, before you turn your attention to bringing in additional income.
Once you’ve properly assigned roles for your money, understand that you cannot rely on just your paycheck to give you the life you want and deserve. Yes, a job may start the race, but it definitely won’t finish it. Begin developing unique ways to make additional income.
One way to create additional income is by selling your old clothes and shoes. Everyone has old clothes that they barely wear or old shoes that they no longer want. Start reselling your clothes on places like Poshmark, Ebay, The RealReal, or, for men, Grailed. This will help generate more income, without causing you to work tremendously hard for it.
Change Your Way of Thinking
You are going to feel like life is tight, and you may even feel like you’re giving up too much. You will get frustrated, and you will ultimately realize that managing your money, at first, isn’t fun. If this is truly how you feel, then you are on the RIGHT track. Change that negative outlook and realize that this temporary pain is setting you up for future prosperity.
Using your entire paycheck before it gets here isn’t fun. Not being able to take your dream vacation isn’t fun. Not being prepared for emergencies isn’t fun. If you want to stop living paycheck to paycheck, you must change your habits. Ask yourself, “What matters more—spending all my money now, or becoming financially secure forever?” Whenever you find yourself wanting to give in, remind yourself of why you started.
Always remember that there are people making six figures who have financial issues. There are also people making $30,000 per year who are doing just fine financially. Most times, living paycheck to paycheck has more to do with one’s mindset around money versus their actual money. You do not have to continue living paycheck, unless you choose to. It is a lifestyle choice—it’s up to you to decide how long you are going to accept it.
Ashley M. Fox is a former Wall Street analyst, a Howard University grad is now an expert in her field as a Financial Architect. She is the founder of Empify (merging of the words EMPower and modIFY), an education- based organization created to help working professionals, small business owners and the youth build wealth from the ground up. Ashley focuses on the creation of life-altering curricula, informative digital content and interactive events curated to teach the basics of financial literacy. Ashley is a highly-sought after speaker, and she has been featured on empowerment tours, college campuses, and keynote speaking platforms. She has been featured on Jim Cramer’s “The Street”, Yahoo Finance, AOL, Philly.com, Huffington Post, and Glamour Magazine.