One thing we are frequently asked is “How can I save money when I live paycheck to paycheck?” We won’t candy-coat it – being poor and saving rich is difficult…but nowhere near impossible. We’ve talked to a number of people who have faced, and overcome, a number of financial difficulties – from bankruptcy to identity theft to just plain irresponsibility (their word, not ours) and collected their tips for how to get out of debt, fix your credit score, and achieve financial stability.
Pay your bills first
Countless financial advisors like to say “Pay yourself first” as a way to convince people to save money and put something away for a rainy day.
Chances are, though, it’s already raining.
When you’re in debt (and probably sinking deeper from interest payments), you’re not doing yourself any favors by letting your debt grow at the same time as your savings account, so use your money – that’s why you earned it, after all. Prioritize your bills and use whatever leftover cash you have to get ahead of just one. Doing so will do two things: buy you some breathing room for the future (which is good), and get that bill paid off sooner (which is awesome).
Prioritize your bills
Most lenders don’t like to say this out loud, but every almost bill has a “grace period.” For example, if your car loan is due on the first of the month, chances are you won’t start to accrue late-payment fees if you pay it by, say, the fifth.
As you start working towards financial security and stability, reach out to your lenders and billers (like the utility companies) and find out if they extend a grace period to their customers. Once you know what bills are due on what days, you can better plan out how, and when, to spend your money.
Speaking of when to pay your bills…
Make a calendar
Nearly every “financial expert” will tell you to make a budget by writing out all the money you make and compare it against all the money you spend, and build your financial strategy from there.
What this fails to take into account is that if your monthly expenses are due on the first but you don’t get paid until the 15th, your budget is irrelevant because your bills are always going to be late, and you’ll always be in the red (and thus, you’ll always pay extra in late fees, and you’ll never catch up or get ahead).
Instead, figure out when your bills are actually due and work from there. This will help you properly manage your money by knowing how much of each paycheck will need to be spent or saved, and when you’ll have a bit of a cushion to work with.
Take care of yourself
It has become all the rage to try and lay a guilt-trip on people who are struggling financially. There are no end of doomsaying articles that denounce people facing hard times who dare to indulge in a fancy coffee or a nice dinner.
Don’t believe it, don’t buy into it, and don’t ever let anybody try to make you feel bad.
We understand the financial stresses and struggles of everyday life – over 90% of the country is a single unforeseen circumstance away from complete financial meltdown, so if you’re facing tough times, know that you’re not a failure, you’re not a bad person, and you don’t deserve it.
What you do deserve, however, is to be rewarded for your hard work from time to time.
Remembering to take care of yourself and treating yourself right is not only important for mental and emotional health, but it is also an important reminder as to why you’re working so hard to get on top of your finances.
Got any more tips and tricks for mastering your finances and getting yourself out of debt? Sound off in the comments! And let us know how you’re going to take charge of your money in the new year!