The statistics are staggering. Nearly 80-percent of working adults barely make enough money to survive from one paycheck to the next. Without enough cash on hand, you may be an unexpected expense away from bankruptcy. If you’re stuck in this cycle, read here to learn how you can better manage your money.
Budget All Expenses
Most people know how much money they bring in every month. The goal is to earn more than you spend. However, most people spend frivolously, without realizing how much money they’re wasting on nonessential things. Writing down a monthly budget is the best way to see how much you’re actually spending.
Begin by tracking your income. From that number, subtract all of your monthly bills. Whenever you make a purchase during the month, write it down. At the end of the month, evaluate which expenses you can cut. If you buy a latte every morning, save money by brewing coffee at home. Rent movies instead of heading to the theater.
Pay Yourself First
Many financial experts recommend having enough money in savings to last you for six months. You should save even more if you ever want to retire. Paying yourself first is a rule that everyone should follow. Set up an automatic savings plan to ensure you never forget to put money in your investment accounts.
If you’re barely getting by, you still need to build up savings. You may not be able to put a lot away each month, but adding a few dollars to the account every week or two will eventually add up over time. Set savings goals, and try to reach them by a certain deadline.
Get Out of Debt
If you discover that most of your earnings go towards paying off debts, then it’s time to finally pay them off. Focus on one debt at a time, until it’s paid in full. Use any extra money you have to repay these debts. High interest loans, such as credit cards or money advances, should be paid off first.
It’s takes time to save money and get out of debt, but your hard work and diligence will be worth it in the end. By changing your money habits now, you’ll be less likely to make poor money management choices in the future. Stop living paycheck to paycheck, and do whatever it takes to build your nest egg.