Standing on the edge of a precipice looking down at a chasm hundreds of meters below covered with tons of jagged rocks. This is what living from pay cheque to pay cheques is all about. A strong wind, some dizziness or a slip is all you need to take you over the edge. This is absolutely one of the scariest financial situations to be in. Today a large percentage of our population is living in those precarious circumstances. What is more frightening is, there are people earning income of $60,000.00 to $70,000.00 who is balancing on that tight rope. It’s a tough position to be in, especially when there is a family to support. This is extremely stressful and difficult to maneuver oneself out of this canyon. Usually there is no lifeline up. It’s all up to you. You are all alone.
Here are six things you can do to avoid living pay cheque to pay cheque.
- Create and maintain an emergency account with automatic deposit on a regular basis each and every payday. The amount does not have to be hundreds of dollars. Start with a small amount that you can afford which will not interfere with your regular monthly expenses. A good place to begin is from your entertainment or impulse-spending amount. Begin with $5 or $10 every payday.
- Change your life style. Begin by bringing your lunch. Skip one or two of your daily lattes. Borrow books and magazine from the library for your book club. Shop with a grocery list. Buy only the things you need. Only buy sales items if they are needed. Next month another supermarket will have the very same item on sale.
- Create a Spending Plan. It is well worth it to spend sometime looking at your income and expenses. Do not round out the numbers when creating your spending plan. Put in the exact amount. Pay your bills the same way you get paid. If you are paid bi-weekly pay your bills bi-weekly.
- Stick to your Spending Plan. Carry a copy of your spending plan on your phone. You need to know where your money is going and how much you have to spend on an item. Do not leave your spending plan on your laptop at home; it should be with you at all times.
- Find a higher paying job or get a part-time job. It maybe time you get out of your very comfortable position. If you do not take the time to look for another job you will not find one. Start by networking with friends and family.
- Sell some of the items you have not used in the past year. There are many places that will pay you cash for gently used items of clothing and household articles.
The most important thing you can do to get you to stop living from pay cheque to pay cheque is to be aware of where your money is going. Stay focus on managing your money. Read blogs such as this and seek professional help that is free.
I offer free financial money management.