Five ways to stop living paycheck to paycheck
Do you countdown to payday? You’re not alone. More than three-quarters of workers (78 percent) are living paycheck to paycheck to make ends meet.
Five Ways to Stop Living Paycheck to Paycheck
Do you countdown to payday? You’re not alone. More than three-quarters of workers (78 percent) are living paycheck to paycheck to make ends meet, according to new CareerBuilder research. Whether it’s poor budgeting skills or the fact that paychecks have been expanding at a slow rate for much of the economic recovery, a quarter of workers have not been able to make ends meet every month in the last year, and 20 percent have missed payment on some smaller bills.
Less than a third of workers (32 percent) stick to a clearly defined budget and a slight majority (56 percent) save $100 or less a month:
None: 26 percent
- Less than $50: 15 percent
- $51 to $100: 16 percent
- $101 to $250: 14 percent
- $251 to $500: 11 percent
- $501 to $750: 5 percent
- $751 to $1,000: 4 percent
- More than $1,000: 10 percent
Having a higher salary doesn’t necessarily mean money woes are behind you, with nearly one in 10 workers who make $100,000 or more (9 percent) saying they usually or always live paycheck-to-paycheck; 59 percent of workers in that income bracket are in debt. Twenty-eight percent of workers who make $50,000-$99,999 say they usually or always live paycheck to paycheck, and 70 percent of them are in debt. Of those who make less than $50,000, 51 percent say they usually or always live paycheck-to-paycheck to make ends meet, and 73 percent are in debt.
Five Ways to Become More Financially Savvy
Whether you’re 22 and looking ahead to your post-college years of independence or 52 and moving on from past mistakes, there are some crucial steps to take if you want to be confident in and comfortable with the way you manage your finances:
1.Stick to a budget: There are different schools of thought on the "best ways" to budget, but in general, it helps to track your spending, even if you’re not categorizing every transaction. If you don’t know where your money is going, chances are you’ll lose track and end up short when it comes time to pay the bills.
2.Save for emergencies:That means you have three to six months’ worth of expenses set aside in an emergency fund or account in case you lose your job, are unable to work, your heat pump goes out, your car needs repairing, you break a leg, or anything else unexpected happens. Emergencies happen, and you need to save for them.
3.Develop a plan to pay down and consolidate your debt:Call your creditors and ask for lower interest rates, special payment plans and other perks to help you achieve your goal. Then pay off those creditors who are charging the highest interest. After you’ve paid off the big offenders, use that same money to carve down your other debts.
4.Learn how to manage your retirement savings plan: Due to the growth of retirement savings plans such as 401(k) and 403(b) plans, workers are now responsible for managing their investments. Most workers lack basic financial knowledge but need to become experts about work benefits.
5.Get a side hustle: Side hustles are odd jobs that are flexible and provide a little extra cash to spend outside of the regular paycheck. At best, they will encourage your hobbies and perhaps fuel a second career. For example, if you are adept at graphic design or play an instrument, seek out opportunities that allow you to hone these skills and increase your network to get paid for your abilities.