How can I stop living paycheck to paycheck? I try to save, but things come up! Help!?

Question

Every time I try or plan, I just can't seem to get ahead! Help.

Answer 1

First, you should pat yourself on the back for even having the desire to save. Most Americans don't (or aren't serious about it). Without knowing your exact financial situation, it's going to be hard to target advice. But I'll give you some general tips and I hope they work out for you.

Ok, so obviously if you want to save, you need to make more money then you spend. So get yourself a pen and paper and start by writing down your source(s) of income and how much it brings in each month after taxes. Then write down all your expenses. And I mean all your expenses: rent, food (broken down into eating in/out), car payments, cc debt, entertainment, auto insurance (you may need to divide your total payment by 6 or 12 months), charitable giving, clothing, gas, gifts/generousity, cell phone, tv, internet, etc.,.

After you've listed your expenditures, you'll need to decide what to cut. The biggest culprits are typically entertainment and eating out. Both of those things should be next to none if you don't have a lot of expendable income. Doesn't mean you can't have fun, but maybe take up hiking. The next step would be to figure out what aren't real necessities and axe those. For example, cable tv is not a necessity. And internet and cell phones probably aren't either, even though society would tell you otherwise. Finally, figure out your necessities are and try to trim those if you can. For example, can you cut down on rent by living someplace cheaper, or by getting a roommate? Or can you shop the sale rack at J. Crew instead of paying full price (or do you even need new clothes?).

Hopefully, by this point your expenditures are less than 80% of your post-tax income. If not, then keep cutting, or find another source of income (work nights/weekends or sell stuff you don't need).

Ok, so now you're saving money. The key is now to make the money work for you. A checking account is fine if you have less than $500 to your name. As soon as you have more than that, you need to be thinking about an account that will actually make you money. A checking account pays next to nothing in interest. A savings account is a good next step. It pays 2% or so, and it's super easy to transfer money back and forth from your savings and checking accounts. Once you have a little breathing room, you'll want to keep as much money as you can in your savings account and only enough in your checking account to cover the checks you write. If you continue saving, you'll soon have enough money for a money market fund. These funds are like checking accounts, except they require a minimum balance (maybe $2000-$3000) and they pay higher interest (about 5%). If you get to this point, you're doing pretty well. You might be thinking, "$2000, I'll never get there". You will, saving just $175 a month would get you there (and then some) in a year.

But I also hear you when you say, "things come up". Some of these things are predictable, so they should go on your budget. But clearly some of our expenses are unexpected. Saving and making your money work for you is going to get you that buffer that you need to cushion these larger expenses. Good luck.

Answer 2

This is a hard one. The thing to do is to pay yourself a savings amount each paycheck no matter what, even if it is only $5. Give this money to someone that will not give it back to you under any circumstances until you reach a goal - say $500. They also should be someone you can trust not to spend your money.

Answer 3

Invest in something you can't touch, like bonds. When you get that little bit of extra money, buy a bond right away and then put it somewhere that's what I did. I still live paycheck to pay check but I have a thousand (so far) worth of bonds somewhere that I do not touch.

Answer 4

you have to work harder at not spending money- before you buy something- ask yourself- do i really need this, or can i do without this item-- don't use charge cards for anything--pay cash, or use a check to buy things, so you don't over-spend--brown bag it at lunch time instead of eating out- tell people you are on weight-watchers, if they ask, why you bring lunch from home- you will be amazed at how much you can save right there--quit eating out--dont eat out with friend's- just have a soda or iced tea- tell them you are saving up for a car or a home, if they ask why--make believe you are divorced and financially strapped big-time, been there, done that ! don't spend a lot of money on clothes. clothing and eating out are the 2 best places to blow money easily--be carefull with your clothes-try to buy items that can be combined with each other- or visit re-sale shops for some good values--also- dont buy a new car every 2 or 3 yrs- that is where people blow big wads of money-- buy a car, take good care of it- pay it off- and keep it-put that car payment money in a saving account each month--also- buy a used car- not a new one- that saves a lot- don't worry about being cool, or up to par, with all your friends- that is the easiest way, to stay broke forever !! i am a retired CPA, who has counseled young people, on this very same problem, and also single moms and dads, after divorce, who have financial problems. i am also a retired CFP- certified Financial Planner- with lots of experience, personally also, after 2 divorces and re- marriages, which is always straining, financially and emotionally !! if i can be of further help to you, holler back at me--good luck to you..also, if you can find a room-mate, that can cut your living expenses, greatly- or move home to mom & dad for a yr or so, just to save money.. they could be very supportive of you doing that, perhaps ??? good luck !!!!

Answer 5

give it time. You will eventually make a higher wage down the road. You need to figure the best path for your profession to achieve this. Sometimes you have to go backwards first, like doing some unpaid work in exchange for meeting a contact, or getting your name out there. Just be patient, and use your time wisely. Keep your eye on the prize

Answer 6

Rumor has it that having a budget is what really works.

One this that's helped me is having my paychecks direct deposited and some of it goes into a savings account that is difficult for me to access.

Answer 7

Eliminate all the extras you can.

Budget, and STICK TO IT.

Get a cheaper place to live.

Pray? We've all been there (some of us still are) and you can get out of it, but it takes some real discipline. Pack lunch to work instead of eating out. Eat food you cook from scratch instead of microwaving stuff or ordering carry-out. car-pool.

There are some non-profit groups that can help you - look into them and see if they can help you set realistic goals and make a budget.

Answer 8

Start with a practical plan or budget. Use the www.go2self.org "kill Debt Calculator" and use it to see how your current spending habits can be adjusted to start to build a little nest egg. There is even a free training course that would help you on your way.

Answer 9

If it is possible, get a second job for awhile. If not, only spend money on things you absolutely NEED. A lot of times people confuse want with need and it gets them in a bind financially.

Answer 10

You need to "pay yourself first". This might be trivial but first you need to define how much money you need on a regular daily basis as far as "spending money".

You also need to create a budget plan that will have all of your "scheduled expenditures" as well as "the black hole". Consider the "black hole: as a few bucks needed each day for general purposes.