Reduce Financial Stress: 4 Tips for Easily Making Your Monthly Payments
Saturday, April 6, 2019, 6:00 AM | Leave Comment
Most people who live paycheck to paycheck generally believe that they would not live the same way if they just made more money.
The truth is, however, there are proportionally just as many people living paycheck to paycheck who make six and even seven figure salaries as those with five.
No matter what your income level, however, you can go from barely squeaking by to easily making your monthly payments.
Here are 4 tips.
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Temporarily Reduce Your Spending to Only Your Legitimate Needs
Most people spend a great of money every month on small unnecessary purchases. Coffee, individual snacks and drinks, subscription services, unused gym memberships and even unused food can add up to hundreds of dollars every month. If you want to start getting ahead of your bills, you need to severely curtail your expenses for a short time to only what you legitimately need.
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Create a Budget
While you are creating your budget, you also need to make a plan for sticking within it. This can include things like cutting dinners out to once or twice a month, making your own coffee instead of buying it or even trading childcare duties with neighbors or relatives instead of paying for a sitter.
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Put Newly Freed up Capital towards Paying down Debt
If you carry $5,000 in credit card debt, you are paying a significant amount of money just towards interest alone. The lower your balance, the less you pay in interest. Start paying off the smallest debts first, then take the same amount you were paying for that debt and pay it towards larger balances. The more debt you pay down, the fewer bills you have and the more money you have to pay off more debt.
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Start Putting a Portion of Your Income towards Savings
If you can, try putting 10 percent of your paycheck into savings. If that is too big of a stretch to start, try starting with two to three percent and then work up to 10% over time. The goal is to save enough money to carry you through at least 3 months with no income. From losing your job to being involved in an accident, you need to make sure you can still easily pay your bills for a few months while you either find a new job or have unemployment kick in or while a personal injury attorney is working on getting you a settlement.
Easily making your monthly payments each month will not happen overnight and you will have to make a lot of sacrifices to get there. When you do get there, however, the peace of mind it brings you will generally be more than worth the sacrifice. You may even find you are much happier without all the things you used to spend all your money on.
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