Financial reports show a majority of Americans couldn’t cover a $1,000 emergency. Around half of Americans would miss their bills if they missed a paycheck.
When unexpected expenses pop up, the average American goes into debt. However, there are ways to combat this on the individual level. What can you do to get started saving?
After all, it can be tough to save any money at all when you’re already living paycheck to paycheck. If all of your money is going to your bills and expenses, how can you save? Believe it or not, you have options, but you need to be strategic about how you approach your finances. That’s where these tips can help.
Open the checkbook and take stock of where your money is going. Sometimes it can feel like you have less money than you do because of recurring expenses you don’t actually need. Maybe there’s a gym membership you’re not factoring in, or a subscription to a magazine you no longer read. Take stock of these expenses and cut where you can.
Next, look at your spending money. After your bills are paid and your food and other expenses are covered, what does your spending look like? Are you buying lots of fun stuff every paycheck and finding yourself broke days after being paid? Then a budget can help.
Once you see your finances in black and white, you can begin saving or investing your money in a more thoughtful and helpful way.
If your finances are so tight that you have little money left after paying your bills and buying groceries, then something is wrong. Either you’re not being paid enough or your bills don’t fit your lifestyle. These are both issues you can address, though they’re a bit tougher than the average financial issue.
If you’re not being paid enough, your options can feel frustrating. Few jobs are offering promotions just because you want one, and fewer still are hiring people on at high rates in the midst of a pandemic.
You could opt for a second job to help boost your income, though this might be difficult with your schedule. If your bills are simply too high for your lifestyle, consider your repeating bills.
Maybe your cellphone, car, or home are nicer than you can afford? In those cases, you might be better served selling them and using that money to pay them off so you can buy one more in-line with your budget.