Living paycheck to paycheck? Then this article is for you.
We have all been there at some point, broke, whether managing college with a career, newly married and newly in debt, you or a loved one losing a job or even after a break-up and suddenly you are down to one income and things get really tight, really quick. Then you start to realize that you have to make some changes to be strong and get you successfully through a hardship.
Reality is that no one actually wants to live paycheck-to-paycheck…but sometimes spending habits are hard to break which keeps them in this vicious cycle. We work hard for our money, the last thing that you want to do is waste is on things that don’t matter. Think about some things that you might buy on a daily basis…$8 at Starbucks on your commute can start to add up by the end of the week or even the end of the month. I’m not saying to not get your Starbucks (or speciality drink!), I get one at least once a week, but cutting down to maybe only 1 or 2 will help just a little bit!
As a working woman, it’s important to know what bad habits you (or your partner) may have that are making you broke and keeping you stuck in the paycheck-to-paycheck cycle. Once you know what they are (have talked about them too!), you can work on trying to fix them to help you save more money!
Check out these 5 bad habits that are making your broke so you can start making easy changes today!
5 Bad habits that are making you broke…
#1 Thinking You Don’t Need a Budget
Everyone needs a budget…I repeat…everyone needs a budget. We all need to learn how to create a budget in our lives, sooner rather than later. A budget, although scary to make, is important for you to realize exactly what you are spending and where. Keeping track of a budget on a monthly basis will help you recognize trends in your spending habits- especially in the forms of bills, credit cards, eating out etc. I simply helps you keep track of everything…and can be kept completely private!
Check out these free templates from Mint.com to get you started!
- Free Budget Template
- Daycare Budget Template
- Student Budget Template
- Home Budget Template
- Simple Budget Template
- Monthly Budget Template
- Sample Budget Template
- College Budget Template
#2 Letting Social Media Own You
Social media gives us the chance to peek into everyday lives that strike our interests. We often see favorite celebrities on vacation, instagram-bloggers displaying their beautiful ‘blog-worthy’ purchases. As much as we know that a lot of the stuff on the internet is not real, it really is just a mirage, it can be very convincing and confusing and will make you start question the things you have in your life.
We often compare ourselves with others and social media makes no exception due to its ease of access. You have to remember that people are only posting things that they WANT you to see and in many cases, what the WANT you to buy from them. When you are in debt, buying the latest pair of shoes that you saw on facebook (think those sneaky Amazon ads that pop up in your feed) is admititaly not a great practice.
Be careful to not let Social Media, as fascinating as it is, influence you to spend money on things you can’t afford or don’t need. This will make you broke incredibly quick. If you are not inspired, and feel envious, unfollow that person. Why make yourself feel bad? You are working so hard to do what is right for you and your family each day.
I’m not saying that social media is bad…I’m just saying be careful on what influences you and your spending habits…
#3 Treating Credit Like Cash
Credit cards can be either great for you or they can put you in a downward spin. Americans’ total credit card debt continues to climb in 2017, reaching an estimated $931 billion — a nearly 7% increase from the previous year. When you see your available credit line, you can get a serious case of false security because it can make you feel like you have more money that what you actually do. Credit is not cash…credit comes with an additional cost-interest. The average household with revolving credit card debt pays $904 in interest annually.
The average U.S. household that’s carrying credit card debt has a balance of $15,983. Households, on average, with any kind of debt owe $133,568 (including mortgages). Despite the ‘cost’, credit cards can come in handy- especially in times of an emergency but try not to make it your only go-to for purchasing power.
If you can, focus on building a short-term emergency fund of $1,500. That ‘just in case’ savings plan to be able to use instead of your credit card anytime an unexpected expense pops up.
Credit cards can be great, especially with the special rewards, points and ‘cash’ you can get…as long as you pay off the card in full every month. But think about when/where you want to use those cards. Try a no-spend weekend, week or month and not use those cards. Challenge yourselves!
#4 Is it emotional or impulsive?
We sometimes use emotional spending to manage problems because we believe it is healthier than binge eating, alcohol or drugs. … Emotional spending can lead to spending money on unnecessary purchases, which reduces the amount of money available for meaningful purchases or necessary savings. Think about what triggers your emotional or impulsive spending? When you let your emotions dictate what you spend instead of thinking through your purchases you may feel that familiar guilty feeling that makes you question what you bought when you get home.
So what how is impulsive spending different? Maybe a flash sale triggers you to spend when you normally wouldn’t. Maybe your favorite store sends you a newsletter with items you might like. There are plenty of tactics used by retailers to make you spend money, especially on impulse. Fight the urge to impulse spend by walking out of the store. Once you’re out of the store, ask yourself if you really need the purchase. If the answer is no, keep walking! People who like to shop for fun are more likely to buy on impulse. We all want to experience pleasure, and it can be a lot of fun to go shopping and imagine owning the products we see that we like. Once we start experiencing pleasure as a result of this sense of vicarious ownership, we’re more likely to buy those products so that we can continue to experience that pleasure.
So think logically about what you purchase and if you put away your credit cards for the trip, figure out what you can earn to go out and buy…the wait will be worth it in the end.
#5 Pretend it isn’t there
If you want to get out of the cycle of paycheck-to-paycheck, you have to take the plunge and face your debt directly. Pretending that it doesn’t exist because its too stressful to deal with is not going to make it any less or go away. More importantly, it is not going to make the process of getting out of debt go any quicker. Ignoring your debt is going to cost you more each month. So, you need to accept that you have it and create a plan to get out of it as quickly as possible. There are many different “guru’s” out there that will tell you how to tackle it and what to pay off first. Find what works for you. But always remember that the first step to saving money and getting out of the “broke” cycle is to recognize and own where you are in your finances.
If you are doing any of the 5 things above, stop it now! Think about how you can change your situation for the better. Complaints and negativity will not help your situation, so remember to focus on the positives. Imagine how much better your life would be with better money management skills!
Are you guilty of any of the habits above?
How do you stay positive in tough money situations?
Post a comment below to share!
Looking to make some extra money to help you break that cycle? Learn more about me or check out my posts making extra money and saving what you already have!
- Start a blog!
- Blogging for Beginners Resource Guide
- My favorite blog resources!
- Save money weekly by meal planning!
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