Plug the Holes in Your Budget
09 July, 2020
Living paycheck to paycheck is no fun, but a large number of the population live that way. Trying to break out of the cycle is a challenge, but it is exhausting to feel that you can never get ahead. If you are tired of trying to stretch your paycheck the last few days of each pay period, there are some steps you can take that will help free you from this painful cycle.
Do What it Takes to Pay Off Credit Card Debt
Unless you have a great interest rate, you should work really hard to pay off your credit card debt. If you are just making the minimum payments, you will be surprised at how little progress you are making on paying down your debt. Take a hard look at your statements this month. That may be all it takes to fuel your resolve to cut out credit card debt. The first step is to stop using your cards. This can be challenging if you have become accustomed to living on that monthly float. Just understand that the next several months are going to be a tough transition, but you can do it. You may consider looking into a part -time job temporarily. Earmark the funds from this job for paying down debt. You will be surprised at how quickly working an extra 10 hours a week adds up when you dedicate the paycheck to your debt.
Look for Hidden Ways to Save
While it is easy to cut out things like eating out or streaming services, there are other places in your budget where you may be spending more than you need to. Consider your student loans. Use an online student loan refinance calculator to determine how much you could save by refinancing your student loans. Taking an hour or so to complete the paperwork could save you thousands in interest over the life of your loans. Pick up the phone and call your internet, cable, and other service providers, as well as your home and auto insurers. Ask if there is a better rate or more affordable package that you qualify for. You will be surprised at how much you can save just by asking.
Keep Track of Your Spending
The idea of tracking every penny spent is not very appealing to many people, but it is a beneficial exercise. Much like tracking calories while dieting, tracking your spending shows you surprising areas where you are spending and gives you better insight into where you could spend less. Tracking your spending does not mean you have to necessarily cut your spending. The best results will come if you continue to spend as normal, but write down everything you spend. At the end of the month, go back over your records. You may find that you could make some painless changes to your routine and save hundreds of dollars a month. Shopping smarter at the grocery store, cutting down on impulse online purchases, and coordinating errands so you spend less time and fuel running around town can all lead to lower spending as well as a higher quality of life.