Americans are living above their means, drowning in debt and the problem is getting worse. Many Americans are foreclosing on their homes will be forced to live on the street because they are in so much debt. Many Americans spend their entire paycheck the same day of within a week of being paid. If you are living paycheck to paycheck here are 5 ways to improve your financial situation.
1. Direct deposit. Cashing checks at a check-cashing store costs on average anywhere from 1% to 5% of the amount of the check. If you do this each payday this is money that you are losing. Use direct deposit for free and save yourself some money.
2. Education. Go back to school to further your education or take training classes to expand your skills at your current job. This will put you in a better position to get a promotion at work or salary increase. That money can be used to create a savings account, plan for retirement, pay down debts and pay for necessary expenses.
3. Budget. Stop using your credit cards and pay for everything with cash. If you do not have enough money to pay for necessary expenses such as food, clothing, shelter, healthcare create a budget for yourself to determine your total monthly expenses and your total monthly income. Reevaluate your spending habits, reduce your expenses and various plans or cancel them (cable, phone, cell phone, internet, etc.). Shop at discount stores, outlets, use coupons, carpool, etc. to find extra money, which can be used to pay down debt.
4. Savings. You should enough money saved to pay at least 3 to 6 months worth of bills. The interest rate at banks right now is very low. Try opening a high interest online savings account such as www.emigrantdirect.com or www.ing.com which earns you on average 4 to 5% interest on your money. Then develop long-term savings goals such as planning for retirement, college education, homeownership, etc.
5. Seek Help. Don't feel like you are alone. Talk to friends, relatives or neighbors who have gone through similar situations. Go to the library or do research on the internet for various ways to reduce expenses, gain new skills, and shop on a budget. Some great websites are Budgetdial and Stretcher. In addition, many groceries stores teach classes on how to shop on a budget.
If you want to stop living paycheck to paycheck you have to change your mindset, take a leap of faith and focus on your financial goals. You can also watch financial shows on television or check out books at the library on personal finance, financial empowerment and other topics.
