Personal Finance 101
Many Americans live paycheck to paycheck according to surveys throughout the years. There are even more as the economy slows down. It’s Financial Literacy Month, so we’ll go through some tips to stop the cycle.
If you are just starting your journey of financial literacy, you should always take an account of how much money you have coming in and going out. Account for all of your spending and this will help highlight where you’re wasting money. These could be as simple as canceling a subscription or more complicated, like renegotiating rent. Shopping around for insurance could also save you some cash. Be cognizant of where your money is going or else it will be easy to overspend and you won’t notice until it’s too late and you’ve dug yourself even deeper.
If you can, automatically divert a portion of your paycheck to a savings account. Saving should not be a secondary goal. As the legendary investor Warren Buffet once said “Do not save what is left after spending; instead spend what is left after saving.” You cannot get out of the cycle and start building up a safety net until you start saving on a regular basis. If finances are tight, you could start small and build up over time. Every little bit helps.
Sometimes, we get complacent with our service providers and forget to look through the monthly bills. There may be unfamiliar fees, unused add-ons, or unwanted services tacked on. If you don’t need unlimited data on your cell phone, you could consider switching to a cheaper alternative that charges based on usage. If you do, make sure to purchase the plan that will cover your average data usage and the cellular service coverage area is sufficient for your needs.
Finally, one shouldn’t overlook opportunities to increase their income. These could come through part-time jobs or freelance work, selling unwanted items around your home, etc. Even small increases to income can have a great impact on getting out of living paycheck to paycheck. Some work places frown upon their employees working outside of the company. That being said, it’s wise to review your employer’s policy on outside work so you won’t jeopardize your primary source of income.
