It is estimated that 76 percent of people in America are living check to check. This is not a problem that is exclusive to low-income earners. In fact, it is estimated that 25 percent of people who make six figures are living check to check. The good news is that there are things that you can do to break the check to check cycle regardless of your income.
Take Inventory of Your Finances
Before you can break the check to check cycle, you will need to do a thorough examination of your finances. List all of your bills and income from all sources. If you are waiting for your next paycheck, then you can use a pay stub calculator in order to estimate how much you will bring home.
Increase Your Cash Flow
In many cases, bringing in more income can get you out of the check to check cycle. There are a number of ways that you can increase your cash flow. You can get a second job. You can also sell items that you no longer need.
You can also apply for a promotion at your current job. Even though bringing in more money can help get you out of the check to check cycle, you should try not to accumulate any additional expenses. Many people make more money and end up falling back into the check to check cycle because they accumulate more expenses.
Trim the Fat
You can get your finances under control by getting rid of things that you do not need. For example, if you have a gym or country club membership that you are not using, then you should consider getting rid of it. If you have debt, then you may want to consider consolidating it. You can take public transportation instead of driving a few days out of the week. You will be surprised to find out how much money you can save by making a few adjustments in your lifestyle.
When most people get paid, the first thing that they do is pay their bills. Even though paying bills is extremely important, having a savings account is just as important. That is why if you have direct deposit, then you should have it set to where a certain amount automatically goes into your savings account. If you get a paper check, then you should deposit money into your savings account as soon as you get paid.
You may be living beyond your means because you have a car or house that you cannot afford. Moving into a cheaper house or trading in your car for a cheaper one can help you save a lot of money. Keep in mind that your rent or mortgage should not cost more than 30 percent of your monthly income. You should not spend more than 10 percent of your monthly income on a car payment. Additionally, you should not spend more than 15 percent of your income on transportation costs.