Living Paycheck to Paycheck Here's How to Fix It

                                       

Americans are living above their means, drowning in debt and the problem is getting worse.  Many Americans are still foreclosing on their homes, filing for bankruptcy, getting their paychecks garnished, losing their jobs or experiencing other financial crises. Many Americans spend their entire paycheck the same day of within a week of being paid.

Many Americans are living paycheck to paycheck and it crosses multiple income ranges. According to a July 2015 Nielsen survey 55 percent reported living paycheck-to-paycheck earning $50,000 or less each year, and 24 percent earn between $100,000 and $150,000.

Some Americans have moved down an income level from upper-middle class to middle class, middle class to lower-income, lower-income to poverty or from poverty to below poverty due to the economy. Many are still recovering from the effects of the 2008 recession and 2010 government shutdown. Many Americans are forced to live on less money while other Americans are finding it difficult to live on less for several reasons:  1) they do not know how, 2) they do not want to or 3) they are in denial about their financial situation.  

In some instances, Americans live paycheck to paycheck because they do not know where their money is going. They do not have a budget or track their spending. If they become unemployed, they have no backup plan, and little to no savings to recover from a financial crisis. 

Many school systems do not teach financial literacy. Unfortunately, students who are not financially literate grow up to be adults who are not financially literate. These same adults develop bad spending habits, have bad credit and file for bankruptcy or foreclosure. If you are living paycheck to paycheck find ways to reduce your spending by at least 30 percent.  Here are 16 superb ways that will help you stop living paycheck to paycheck.

1. Needs. Avoid buying things you do not need.
2. Risky. Do not use payday loans or cash advances. Stop cashing checks and use direct deposit.  
3. Budget. Create a budget to determine what you are spending your money on then determine ways to reduce spending. Track spending daily for a month. Use Word, Excel or software like Mint.com or budget apps on your cell phone.
4. Comparison Shop. Compare prices with at least three companies to see which has the best deal. Ask if the company will honor competitor prices.
5. Generic. Buy generic brands for food, drinks, cereal, frozen foods, canned goods, paper products, dry goods, condiments and prescriptions.
6. Cash. Pay cash for everything. Scrutinize every dollar you spend and why you spent it.
7. Automate. Automate bill payment by using online banking or pay bills online through your provider’s website (utilities, car payment, rent, etc.).
8. Eat at home. Skip buying lunch every day and eating out. Cook meals at home and take leftovers for lunch. Plan meals and use a shopping list.
9. Sell Items. Sell new or used items on eBay or Craigslist for extra cash.
10. Educate. Take a budgeting or money management class or read articles or books on the subject.
11. Online.  Look for coupons and specials at online websites such as bizrate.com or pricegrabber.com. Use coupons and buy items on sale but do not use it as an excuse to buy something that you do not need.
12. Extra. Find ways to increase your income through cash only jobs or part-time jobs.
13. Get assistance.  Borrow money from friends or family members. Apply for government assistance, get help from your local church or social organizations like the Salvation Army or American Red Cross.
14. Bulk. Buy items in bulk by shopping at wholesale or discount stores such as Costco, Sam’s Club or BJ’s.
15. Utilities. Buy the cheapest plan available.
16. Downgrade. Downgrade all your services such as cable, internet, and cell phone or consider eliminating services. Sell your car and catch public transportation.

11 Ways to Deal with Adult Peer Pressure and Finances

                                                           
Many Americans think peer pressure only affects children but it affects adults too.  Child peer pressure is more obvious but adult peer pressure can be subtle. Many adults may not even realize they have been victims of peer pressure. Many adults find themselves pressured into a lifestyle that requires them to give their family more and buy things they can’t really afford. This behavior results in financial disaster. The economic issues the country has experienced over the past few years has been scary – wars, the recession, the fiscal cliff, the sequestration, etc. and has caused people to make bad decisions based on emotion. Just because you have the money or access to credit to buy something doesn't mean you have to spend it.

Many adults have succumbed to financial peer pressure from family, co-workers, friends and their children which has wreaked havoc on their lives and caused them to ruin their credit, spend more than they earn and even resulted in filing for bankruptcy.

Your friends and family influence you and affect the way you view life. If your friends are materialistic and spend money, it’s easier for you to spend money.  It can be difficult to resist the urge to join them. Living a materialistic life or having lot of money does not bring happy, just look at the wealthy people. Many financial decisions are made to win the respect of people you think are sophisticated, popular or influential. Others seek acceptance, recognition, appreciation and compliments regarding their financial decisions.

Pressures are a normal part of life and adults have to learn how to effectively handle these pressures in a positive way. Some types of financial peer pressures are: pressure to go back to school, pressure to spend money, pressure to go to work events that usually require a cost and pressure to be in debt due to impulse spending. Dealing with financial issues can be very challenging, frustrating and stressful.

Many adults feel they work hard everyday and should be able to buy everything they want.  Sometimes you have to crawl before you walk and many items purchased have no value. Other adults feel pressure to give their children the life they didn’t have or for their children to be the best dressed or drive the nicest car.  When I was in school I was voted best dressed but no one remembers that when you get older. I can’t use it to get a job and I can’t use it to earn any money.  Those things are fun but only for a moment in time. Just like it may be exciting and fun to go on an expensive vacation, buy a luxury car or expensive home. But when reality sets in and you get the bill the next month you are reminded that you were living a fantasy and still have to go to work everyday.

Other adults are pressured to attend a certain college, join a certain membership group, live in a certain neighborhood, drive a certain car, shop at certain stores or eat at certain restaurants. I drove my last car for 14 years until it was totaled.  I would have kept driving it until the wheels fell off. I will do the same for my current car. It is better to buy what you can afford to ensure you can keep it than to buy something you can’t afford and lose it.  People who pressure you into spending more than you earn will also talk about you when you lose it all.

I was hounded by peer pressure the first few years about I bought my home. Some friends pressured me to buy a luxury car , some pressured me to buy a more expensive home, some pressured me to loan them money although they had no way to pay it back and some pressured me to get a housekeeper and list goes on and on. When the recession hit in 2008 everyone called and asked me how I was doing. I said fine, I’m not affected by the recession because I always spend less than I earn and I didn’t buy a luxury car or a more expensive home.  They all replied I know you are glad. No, I am smart. I didn’t yield to peer pressure. If I had, unfortunately none of them would have been able to help me financially.   

Many adults think they will be happy when they buy something, get a certain job or make a certain income. Happiness or success is not found in materials things, it is found within.  Unfortunately, too many adults believe living a certain lifestyle brings them status. Things that bring you status are: an executive position, influential power, and wealth.  Many also believe their job title gives them status.  Only those who are consistently recognized by name everywhere they go, those who the media flock to everywhere they go and those who can go for 5 years without working have status.  Everyone else is still working to get there.

Men try to outspend each other or buy the latest gadgets or cars. Women try to buy the latest shoes, purses, accessories or jewelry for the sake of saying I have Brand X purse or for the sake of a stranger saying, I like that bag or I want that bag.  Some even go so far as posting their purchases on social media.

Statistics show that 70% of Americans are living paycheck to paycheck and 96% of Americans retire or die broke.  Avoid trying to keep up with everyone else, stop trying to compete with others and don’t be jealous or envious of someone else’s success or financial prosperity. Everything is not what it appears to be and you don’t know a person’s journey that led them to where they are today.

In some instances when adults do not surrender to peer pressure: family, co-workers and friends will distance themselves; talk about you behind your back, recruit other to get you to yield, try to break you down emotionally and mentally, or try to scare you into surrendering. This may cause you to feel sad, angry, deceived, lonely, hurt and vindictive.

The saying birds of a feather flock together is true.  The people you surround yourself with are a reflection of you.  When you surround yourself with people who succumb to peer pressure, live a materialistic lifestyle, seek acceptance or approval and lack self-esteem you are acting in a weak state of mind. This type of behavior is toxic and leads to unhappiness, anxiety, depression, health issues and negative financial habits. Avoiding or not succumbing to peer pressure increases your faith and belief in your values system, increases your confidence, happiness and your spiritual growth.

If someone is trying to convince you to do something you don’t want to do or to ask you not to do something -  ask yourself why are they trying to convince me to do this, are they doing this, are they trying to live vicariously through me, are they jealous, what are their motives, will my actions benefit them, what is the cost for making this decision, will they stick around if my decision turns out bad, is this a wise decision and what are the consequences for making this decision? Here are 10 ways to deal with adult peer pressure regarding finances.

1. Learn how to say no.
2. Tell the person I appreciate your offer or suggestion but I politely decline.
3. Look at the character of the person who is pressuring you and notice if their finances are out of whack, or if they are unhappy with the life – misery loves company.
4. Trust your instincts.  If you feel like it will be a bad decision don’t do it.
5. Comfort.  Always be comfortable with your choices.
6. Encourage.  Encourage yourself and be your own cheerleader.

7.      Recognize. Recognize the peer pressure in your family, co-workers and social circles.

8.      Firm.  Be firm in your decisions and stick to them.

9. Take a course.  Take a conflict-resolution course or read free articles on the internet to learn effective ways to deal with peer pressure that may result in a conflict or negative outcome.
10. Defend. Don’t feel like you have to explain, justify or defend your position, you don’t. Silence says more than any words you can say. Sometimes I just give people a look and they know to leave the situation alone and they stop pressuring me.
11. Pressure. Tell those pressuring you that you would appreciate it if they could be supportive and accept the decisions you make in your life.

Once you have compromised your values by surrendering to peer pressure, it becomes easier to do it again. When you stand up for yourself and stand firm on your beliefs you take a risk.  If you lose friends because you did not surrender to peer pressure they were not really your friends.  If people offer unsolicited advice it’s up to you to decide if you want to receive it and if you want to follow it.

You should never feel the need to be part of a group to feel better about yourself, to feel worthy or feel like you have value. Embrace your uniqueness, individuality and be comfortable with yourself and your life. You may not have the life you want but be happy where you currently are in your life. Be confident that the decisions you make are wise and are the best decisions for your life.

Remember none of the people pressuring you to do something or not do something are paying your bills and are probably doing worse than you.  Know that people are watching you even when you are not aware so always choose to make wise decisions. Remember you can’t control what people do and you can’t change people. You can be a positive influence and by making good financial decisions you can be an influence to your family, children and social circles.