10 Tips on Better Financing: No More Paycheck to Paycheck

Hello Everyone! One of the most common topics that comes up when I'm talking to people, is finances! I grew up pretty poor, so growing up I was very serious about not ending up in the same position, if I could help it. Now, because I lacked the knowledge in credit, budgeting, saving, etc., things almost went pretty south. But, being in tough situations is what taught me everything I know. I'm NOT an expert, but I've definitely figured out how to navigate finances to get myself the things I need, want, and have extra as well. So, if you find yourself living pay check to pay check and you've had enough, try out these things to see if they help!

One - Document ALL sources of income.

This one probably seems odd. But you would be surprised how many people just watch their income roll into their bank accounts and that's all they do. You need to write this down in order to monitor it and make a proper budget. Also, your paycheck isn't your ONLY income. WHAT? What could I mean?

Rollover funds from your last check should be considered another source of income. Babysitting for your friend for 20 bucks is an additional source of income. Selling some items you don't need anymore is an additional source of income. Write it down and make it look like this:

Paycheck 01 Jan 2020 - 2500.00

Garage Sale - 328.00

Babysitting - 25.00

Rollover - 800.00

Total - 3653.00

If you monitor your income, you will be less likely to have miscellaneous cash that you are tempted to spend.

Two - Write out all your debt and bills.

You should have two separate lists breaking down your debt and bills. I always fold a sheet of paper in half, long ways, and use one side for bills and the other for debt. Bill are simple, just write how much is due and when (1st half of the month or 2nd half). For the debt, you want to record how much you owe, the minimum payment, and the interest rate. You have to see it to understand it. And once you see and understand, you can budget accordingly.

Three - Plan out where your money goes.

Another one of those tips that sound pretty obvious. But here's the catch. If all your tracking and budgeting is in your head, then you aren't tracking your spending at all! Make it a habit to write things down and have an actual plan! Figure out everything and everywhere your spending goes before you even spend it. And DO NOT break away from that plan unless there will be loss of life or limb. If you are super worried about an emergency... Well, put it into your plan! Put away 200 dollars for a situation and if it isn't spent, then it'll just be even more rollover funds for your next paycheck!

Four - Do not spend money that you don't have!

When we have credit cards with rewards, it's pretty easy to get lost in using them. Even I have to put it in my underwear drawer or something to stop using mine before it becomes a problem. Don't see credit cards and loans as YOUR money. IT'S NOT; IT BELONGS TO THE BANK. It's not worth paying the interest on it. Yes, you should use them to maintain a good credit, but I'm telling you to know when you have to put it away! If you budgeted 300 dollars for food for the family, then go to the store, go get all the items on your PLANNED list and charge it to your credit card. But, you have the money to pay it off! What emergency would it be appropriate to spend money from your credit card? Something extreme like potential loss of life or limb, that's what. If you are low on money and want a pedicure, DO NOT charge that to your credit card. It's not a necessity or emergency and you don't have the money to pay it off, so don't do it!

Five - Use cash when at all possible.

When every purchase is just you swiping a little plastic (sometimes metal) card, you aren't actually seeing your money disappear. You just know that little swipe will get you what you need. But what you need to do, is use cash to help you better understand what is happening to your funds with every single purchase. You will physically watch your money evaporate and hopefully, it should get you to calm down on the unnecessary purchases.

Six - Understand the true difference between needs and wants.

For everyone out there saying, "Oh yeah. I'm really good with this!" NO. No you aren't. We ALL suck at this. Even me. People always justify spending money by saying, "I needed it for (insert excuse) because it made my life easier!" Look, if I had a million dollars, I'm sure I could make my life rather simple...But I don't have a million dollars. If you really really want something because it's that important, then put it into your budget for your next check or two. But it can probably wait! If you needed it and it was that serious, it should've went into the budget you wrote for this check!

Seven - Always put some extra money to your debt with the highest interest rate.

The higher the interest rate, the more money you will be charged over time for borrowing. It adds up! There are credit cards out there with a 24 % interest rate and credit limits of 20,000 Dollars!! That means you could pay around 500 dollars in interest a month with minimum payments of 200 dollars! This is why you need to be careful! But if you already had a "whoopsie" and need help getting out, limit your spending and throw everything you can towards the one account to pay it off and on your other debts, stick to your minimum for now! Once you have the account paid off, it's on to the next one!

Eight - Save, Save, Save!!

Once you have caught up on bills enough to have extra money around, you want to make sure you start putting a minimum of 10% of your Income into savings. This is a combination of retirement savings, your regular savings accounts, or your cash stash at home. Whatever way you prefer to save, shoot for 10% and steadily increase over time as you get on track more and more.

Nine - DO NOT splurge on your tax returns!

Please save your tax return!!!! I cannot stress this enough. I understand wanting to do something nice for yourself, but stay within your means. Sometimes we have to keep things close to home for a while so we can get back on track. Don't use this money to go on a yearly vacation that you couldn't afford without your tax return. Put the money into savings for a crisis because you and I both know that things happen and you will need it! I personally do not even include my tax return in my budget as additional income and I do not allow myself to get excited about it either because I have a rule not to spend it. I really recommend this for other people because you NEVER know what will come up, and if nothing does, work on that savings!

Ten - Always stay consistent!

Don't do this for only one check. Keep going! You are going to need to keep budgeting habits for the rest of time if you always want to have funds available regularly. It's a harsh reality that we all need to accept. I had a very hard time buckling down and making this a regular thing, but I was so tired of counting my dollars out and only being able to put 5 Bucks in my gas tank! Consistency is key when it comes to budgeting. Check your funds everyday. Keep a 20 dollar bill in your car and leave your card at home so you literally cannot spend! When you first start, it really sucks and you feel like you have nothing. But once you get into the second and third check using these tips, you will start to feel the pressure lighten up. That means in two months, things will start feeling better!

Now, this is a quick little snippet of tips I've learned to budget and keep myself in check. If I were to go into great detail, we'd be here alllll day! I do plan on diving in a little deeper sometime, but I guess we will see how that goes! However, I am interested what tips you have learned over time! As I said before, I'm NOT an expert. I'm a sponge who's ready to absorb new tips as well. So please, feel free to comment, share, or hit the contact tab and send me a personal shout!

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