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How To Avoid Living Paycheck To Paycheck

If you are earning less than $100,000 a year, you are most likely live from paycheck to paycheck. Most of us under that line usually work until the next check comes and continue to do so until retirement. We are so busy worrying about the bills we have to pay and getting to work on time we completely miss the in between. Most Americans end up stretching their paycheck to cover expenses. The worst part about it is not having any savings for unexpected emergencies.

How do you avoid this pitfall? Just take three easy steps to control what happens once you get paid.

Watch What Your Money Is Doing

You already know your fix expenses so make a budget and stick to it. The fixed expense budget ensure that you are cover for important things like housing, food, and all utilities for the month. Now you know everything extra after that is optional so you can control how much you spend. Remember you are living on a paycheck that you only get on average twice a month. Learn to curb extra spending that is not necessary to keep more of your money.

Make saving a Priority When You Get Paid

Saving is not easy for most of us, and it can be hard to see money in the bank and not spend it. Regardless of how you feel everyone needs savings to cover themselves whether you are worth $1000 or 1 Million dollars. Start small to save just a little of your money, "I save 10% of my check every month no matter what". If you already know exactly how much you will be paid set up an automatic transfer every month to your savings account. The idea is to have a part of your income put away to invest in other ventures and have money put away for a rainy day. To put your savings in perspective, saving $100 a month equals to $2200 a year. The key is discipline to understand that your savings are not to spend when you want, it is to save for a better future. Secure your account where it is not easy to transfer that money back to spend on unnecessary expenses.

Cut Out Unnecessary Expenses

Expenses can sneak up on us before we know it, that is why it's important to remove the fat. One of the ways we lose money is ignoring the small amounts we lose to services we no longer use but continue to pay for every month. Think of expenses you have on a monthly basis besides your fix expenses. So you need to start making a list of all those subscriptions you have. Think of that gym membership you may have, how about streaming subscriptions that you may not be using anymore. Even if you are paying $8 a month, it adds up to $96 at the end of the year. Imagine you have 2 to 8 bills with the same or higher charges taking money out of your account every month. If you are no longer using the service it has to go, clean up your expenses to keep more of your hard earn income. It may not seem like a big deal to lose that $8 a month, but you would be surprised at how much you can save by years end. Focus on what you need, what is important and make sense for you to spend money on.

Living paycheck to paycheck may be the way of life for the majority of people around the world, but it doesn't have to be your way of life. All you have to do is check on your cash flow to make sure more money coming in your account than you are spending. Start saving a little each month so you can eventually have your money working for you.

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