Having only twenty bucks left after paying your bills sucks! That was me in 1991 when I was stationed at Fort Bragg. I got paid every two weeks and after paying my car payment, insurance, credit card bill, buying food, and gas money–I had exactly $20 left to my name to make it for the next two weeks. There was no extra money for shopping, eating out, concerts, road trips-nothing! I had just enough to pay my bills.
I remember my peers in the Army inviting me out to lunch and one time I would go then the other time I would decline. I declined because I had no money for that. Even when they offered to pay, I would still decline because I knew I would not even have the money in two weeks to pay them back. So I would happily walk over to my barracks room and eat lunch there.
I was young, new in my career, and not earning much so I endured this. But the problem is that some people are earning over $100k a year and living like this, and that just does not make any kind of sense!!
So, below I want to recommend 7 ways you can use to NOT live paycheck-to-paycheck. Ways you can take control of your money and live a better financial life!
- Think about and define your financial values and goals
In order to live better financially, you must understand your own values and goals when it comes to money. You need to be aware of your thoughts about money and your attitude toward money, for example, do you think there is always enough money or there is never enough money? Do you think money needs to be spent as soon as you receive it or do you think some money needs to be saved for future use?
- Have a checking and savings account at a federally insured bank or credit union
There are people living in the United States that do not have a basic checking and savings account at a bank or credit union. If you do not do business with a bank or credit union, then your only other options are predatory places that charge you way more than a bank will charge you for the same services.
- Get in the habit of using a spending plan
A spending plan can give you the freedom you need when it to comes to your money; it helps you to control your spending. Without a shadow-of-a-doubt, you’ll know where your money comes from and where it goes!
- Improve your credit score
A higher credit score (650 to 800 range) keeps you from paying outrageous interest rates when you purchase things on credit. However, using credit can be tricky. Normally people purchase 50% more ‘things’ when they use credit versus cash, so “buyer beware”.
- Plan for your retirement
If you do not want to have to rely on the small amount of money you may be entitled to through the Social Security Administration when you hit retirement age, I would suggest participating in some sort of retirement plan. You can choose from whatever you have available to you–401k, Roth IRA, SEP IRA, or 403b—but please choose something! And FYI, women normally fare worse in retirement than men, so do yourself a favor and PLAN FOR YOUR RETIREMENT!
- Use home ownership as a part of your wealth building plan
There are tax benefits when you own a home. It can serve as an asset AND give you peace of mind. When you own a home, you do not have to worry about rent increases or eviction notices. Home ownership can be a crucial building block to wealth. If your lifestyle supports buying a home, I would suggest doing so.
- Maximize your income tax benefits
Increase the withholding allowances on your W4 form because the more allowances you claim, the less money that is taken out of your paycheck! This way, you keep more money in your pocket to save or invest instead of letting the government government “borrow” if for free all year!
I hope you enjoy this post! If you want to download the list, you can do so here. Thank you!