Are your monthly paychecks hardly enough to cover your bills? Are you basically living from paycheck to paycheck? Are you having trouble managing your finances in general?
One recent Fortune magazine study revealed that nearly 60% of those surveyed said they didn’t have enough money to cover an unexpected expense like a $500 automobile repair bill. Do your finances fit in this category?
It’s tough to save for a goal as far off as retirement or to accomplish other financial goals if you don’t have extra money to put aside each month. The good news is that even if you’re living from paycheck to paycheck, there are things you could do that would help stabilize your finances so you could start saving for the long run. These may be small steps, but they could help.
Change the due dates of your bills
Are there times when you have enough money to cover your bills, but their due dates just don’t match up with your paychecks? Contact your creditors and ask to have your due dates changed so that they better match your paychecks. For example, let’s say you get paid twice monthly, but your big bills, such as your car payment and your rent, are both due at the start of the month. You can contact your utility companies and credit card issuers and they might be willing to let you change your due dates so your budget would get some breathing room.
Treat yourself occasionally
If you’re living on a budget – and we certainly hope you are – it’s easy to start feeling that your finances are so constrained that you’re tempted to binge on something, which could undo a lot of your progress. Experts say is it’s easier to stay with your savings plan when you add in a portion that is to be used for splurges and treats that are important to you. For example, this could be a movie with your kids, a monthly dinner out with friends or even an occasional happy hour. The sacrifices you’re making every day, like having that peanut butter and jelly sandwich for lunch at work will feel much less painful if you treat yourself to the occasional splurge.
Negotiate with your providers
It’s highly unlikely that any of your providers (like your cell phone or cable company) will call you up and tell you that you’ve qualified for a discount or that they have lower rates available.
You need to contact them if you’re looking to for a discount. Call your internet, cable, and cell phone provider at least once a year to make sure you’re getting the best possible deal. You should do this especially if you notice your bill is creeping up. You should also research to see what their competitors are charging and then ask your companies if they will match those rates. The worst thing that can happen is that you get turned down, but at least you’ll know what other companies are offering. Then, when renewal time rolls around, you might make some changes.
Save enough to cover at least a month
Have you read any books about finances? If so, you’ve probably read that you need to save enough money to cover three to six months of your expenses. That can feel like an impossible goal at times. So, set a smaller goal. It can feel powerful to have even just one month of your living expenses saved up. This will help you cover some emergencies and should eliminate the need to take out one of those costly payday loans.
If even this goal seems unattainable, start with whatever you feel you can afford. This could be as little as one dollar a day. Apps are available that could help such as Digit or Acorns as they automate the saving process. For example, if you choose Digit, the app will check your spending habits every couple of days. If you can afford it, Digit will then transfer a few dollars from your checking account to your Digit account. This makes saving practically painless.
Finally, if you receive a big windfall of some kind, like a tax refund or a bonus, set the money aside to help with your savings goal.
Start tracking your spending
If you get a case of the heebie-jeebies when you hear the word budget, there’s an alternative: tracking your spending. It’s just easier to manage your money once you know where your cash is going. You may think you know what you’re spending on groceries or gasoline. But you may be surprised at what you learn after you’ve tracked your spending for 30 days or so.
Apps and websites are available that can make tracking your spending painless. Two of the most popular of these are Mint and You Need a Budget. Mint will not just track your spending; it will even divide it into categories such as groceries, transportation, clothing, etc.
If you don’t want to fuss with an app, you can track your spending by sitting down once a week and reviewing your online statements.
If you’d like more details about tracking your spending, here’s a video that goes into a little more detail:
Regardless of which method you choose, the important thing is to review your spending so that it lines up with your expectations. This may also show areas where you could cut back on your spending so you’d have more money for saving.
No matter how bleak things may look, take heart. There are steps you can take that won’t cost you a cent but could make things better. All that’s required is some time, effort, and self-discipline.