There are several reasons people end up in the week-to-week paycheck cycle. It could be a recent family crisis, a sudden loss of a job, or simply poor money management. Whatever the reason, it’s definitely not a way of life for anyone to live.
If you are one of the many facing this problem, you know all too well the toll it takes on your relationship, your family and your health. Trying to decide which bills to pay each month and having to contact companies to make payment arrangements is stressful.
The good news is there are ways to end this cycle and get back to living the life you deserve.
Establishing A Budget
Some people have no concept of how to manage money and simply live for the moment. Others don’t earn enough to live the lifestyle they have. In order to find out where you stand, you need to figure out what you bring in net each month and the total amount of your monthly expenses. This includes your rent or mortgage, utilities, cable, cell phone, car payments, loans, credit cards. Then factor in the average cost of things like gas, food, school expenses and daycare.
If you add these items together and deduct them from your total monthly income and have monies left over, getting on track will happen quickly. For the short-term, you’ll need to reduce your expenses and then take these newly acquired frugal habits and change your way of managing money for the future.
If on the other hand, you don’t bring in enough to cover your monthly obligations, then you need to find ways to reduce your expenses and supplement your income.
Borrowing To Cover Monthly Expenses
If you have imminent bills looming and no way to extend them out any further, monthly installment loans might be the quick fix to get you even for the month while you’re working on changing your spending habits. Many online companies offer these as an alternative to high-interest payday loans.
They generally offer short-term loans from 12 to 24 months with low monthly payments required. This is definitely not something you want to repeat. Use this loan simply as a way of meeting your financial obligations and move forward.
Cutting Back On Daily Expenses
There are many ways you can reduce your expenses. For instance, if you buy lunch each day cut it back to once a week. The same goes for your morning coffee, make it at home and bring a thermos. Instead of running out each day to different stores and wasting gas, put a plan in place to spend one day out for your errands.
Cook meals that last 2 days like a casserole and have a meatless Friday. These are just a few examples of the common ways many people foolishly spend money.
Reducing Cable And Cell Phone Costs
The quickest way to turn yourself around is to reduce the expenses you don’t really need. Aside from giving up eating out and your morning coffee, taking serious steps to cut costs from your budget is a step in the right direction. If you have a high cable bill chances are pretty good that you don’t watch most of the channels.
Contact your cable company and see if removing some of the channels will save you money. For your cell phone, if you have minutes left over each month change your plan. These two items alone can save you $50.00 to $100.00 each month.
Supplementing Your Income
If you fall into the category of not enough income to support your debt, in addition to cutting back on things like dining out, you may need to take on a second job. Many local businesses in your area are always looking for part-time help. Check online or the newspaper to see if any of the openings work for you and your current schedule.
If you don’t have a way to work a second job due to children at home or having only one vehicle, then apply for a promotion or babysit part time. You could also host a yard sale to help to bring in additional money. The point is to get extra cash into the home while you pay down your debt.
If none of these things work, you may have to consider finding a cheaper place to live.
Restoring Your Credit
If you’ve lived the paycheck to paycheck cycle for a while chances are pretty good that your credit is less than desirable. In order to improve your credit score, you need to meet your financial obligations each month.
There are other ways to improve your score faster while working through getting back on track. Many people apply for a credit card specifically designed for people who are looking to restore their good name. The initial credit line is low and it gives you a way to prove yourself.
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