The past year has been a very challenging one for Americans. Inflation has driven the cost of just about everything upward, from housing to food to utilities. And now, many people are finding that their paychecks aren’t going as far.
In a recent survey by NY Sports Day, 51% of Americans said they’re living paycheck to paycheck with no savings to fall back on. And that’s really problematic.
If you don’t have emergency savings, you could end up with costly debt the moment an unplanned bill lands in your lap, like a car or a home repair. And that debt could also cause damage to your credit score, making it even harder to borrow in a pinch when you need to. So it’s important to do what you can to break that cycle as quickly as possible. Here’s how.
1. Get yourself on a budget
If you’ve got no wiggle room between paychecks, then you need to start following a budget. That should make it easier to track your spending and potentially find ways to cut back on expenses.
You don’t even need fancy tools to keep a budget — a basic spreadsheet or a notebook will suffice. The key is to know where your money goes each month and how much every expense you pay for costs.
2. Cut your spending and build an emergency fund
Once you build up some savings, you won’t necessarily have to rely on your next paycheck to come in to cover your bills. But you can’t build savings without freeing up money, so to that end, you may need to cut back on spending so you can create an emergency fund for yourself. Even if you only treat yourself to non-essential expenses every so often, or you keep those costs way down, you might still need to cut them out temporarily to build some cash reserves.
3. Boost your income with a second job — or fight for a raise at your current job
Cutting back on expenses may not go so far in terms of building savings if you’re already living a very frugal lifestyle. But in that case, it pays to boost your income. And you can do so in a couple of ways.
First, you could sign up to participate in the gig economy and take on a side hustle. There’s plenty of opportunity out there to score a second job if you’re able to put in the time.
You can also try negotiating with your current employer for better pay. If you research salary data and find that your company could do better, it’ll help fuel your argument. And if your employer refuses to bump up your pay, consider taking your skills elsewhere. The job market is still strong, so you shouldn’t hesitate to dust off your resume if you’re stuck in a rut earnings-wise.
Living paycheck to paycheck can be a very stressful way to exist. And you deserve better. Follow these tips to break that cycle — and enjoy more financial freedom.