Does your financial life feel more like a battleground? Despite the dangerous combination of rising expenses and baseline salaries, the check-to-check lifestyle does not have to be a permanent one. Here are a few ways to break the cycle and give yourself more financial breathing room…both for the present and the future.
Set Your Standards…and Go Below Them
Financial planning is the best way to anticipate monthly expenses and identify areas where you can cut costs. At the beginning of each month, go through your statements, bills and receipts and list every recurring (such as rent or car payments) and fluctuating (such as groceries or utilities) expense. Once complete, compare this total against your monthly income. If the number in the expense column is greater than the number in the revenue column, then it’s time to reevaluate your spending habits. While the comparison will be eye-opening and potentially scary at first, it is far less frightening than realizing this gap when it’s too late.
Be Ready to Let Go
Although you may not be able to “Keep up with the Kardashians” right now, all is not lost. Consider downgrading to a smaller apartment that has a lower monthly payment and related bills. Sell your car in favor of public or shared transportation, saving dollars usually spent on monthly payments, gasoline, insurance and associated repairs. Instead of eating out several times a week, meal plan and prepare food at home that can be reused for future lunches and dinners. Gather with friends at free events without the cost. And eliminate monthly subscription services and memberships that can add up over time.
Pay Now. Pay Often.
Consider paying bills at the beginning of the month; doing this can give you better visibility into the money you have to spend and gives you a more stable financial plan. Try to pay certain appliance and service purchases in full, rather than through payment plans. While the initial financial hit may be unnerving, it’s better to get payments off the books completely than to have them linger as recurring expenses.
As difficult as it may be to save, even a few dollars each month can build a cushion for emergencies. Work with your employer to set up an automatic savings schedule to set money aside for savings. Many companies also offer retirement and 401(k) plans that put long-term savings on autopilot. You can also take extra measures to ensure your savings stay out of sight and mind.
Make Money a Conversation
Many people find it difficult to talk openly about their financial situations, in fear that admitting to their struggles could be seen as a weakness or failure. In reality, honesty can expose you to new ideas for saving money and living more comfortably. Active discussions provide new ways to move past the check-to-check cycle into long-term financial stability.