With most of the population living paycheck to paycheck, it makes you wonder how you can get ahead. While you may not be able to survive for years without a paycheck if you were to have a sudden job-loss or major event occur where you would have to shell out a large chunk of change, but by making a few changes you can build up a nice cushion so that you could be comfortable for a few months at least, without dipping into your savings too much. By saving up an emergency fund of a few months’ worth of reserves you can give yourself a buffer, but how do you get there?
Start Tracking Purchases
It’s no surprise that while most live paycheck to paycheck, having a household budget seems to fall by the wayside as well. While it’s important to have more money coming in than going out, which seems like commons sense, but if you’re not tracking how much you’re spending, you can quickly fall, and stay, in debt. By starting out looking at last month’s debit or credit card statement, you can start to see where every dollar is going, and then tighten up spending so you can reduce unnecessary expenses and only focus on the needs.
Reduce Expenses
While you can certainly tighten up spending throughout the month, but it’s a good idea to see some of the regular payments you’re making to see if any can be removed. Take the gym membership for instance. While it may have been a good idea at the start, how much are you using it now? Like most, the visits become less frequent and pretty soon you’re paying for a membership you no longer use. Next, how about cable? While it may be a normal part of your life by now, and so is the ridiculously high monthly bill that comes along with it. Ask yourself how much you are actually watching live TV. If you’re like many, you DVR all of the shows to avoid commercials, and then using streaming services, for an additional cost. Living without cable may be easier than you think and can free up a hundred or so dollars a month to pay down debt, or better yet, save for retirement. You can also get an HD antenna for around $20 so you can still get local channels, for free going forward so you can still catch up on the news and network TV shows.
Be Patient
No matter how much you are in debt, or are looking to have in your savings account, it will not happen overnight. The more you can tighten down on expenses every month and hang onto those extra dollars each month you can finally chip away at your credit card balance, or if stocking away, over time you will finally see the balance continue to rise. Getting into debt didn’t happen overnight, so you cannot expect to get out as quick, so it will just take patience and discipline going forward to stay on the correct financial path.