Balancing Income and Household Expenses
In a 2019 study, the Federal Reserve Board found that approximately 20 percent of Americans spent more than their income. Is this happening to you? Are you running out of cash between paychecks? You're not alone. It leaves you in a tight spot if an emergency occurs and often spurs you into considering payday loans you really cannot afford. Here are five tips for balancing your income and household expenses.
Get a Financial Snapshot
Before you do anything, you need to sit down and figure exactly how much money you earn each month and exactly how much you are spending. Many banks and credit unions have programs within their website that you can access when you log-in to your bank account. Take a look at where your money is going and total exactly how much money you take home after taxes. This information is critical, as it helps you see where to cut costs and start building a savings.
Stick to Cash
One of the biggest issues people face are rising fees and interest on loans and credit cards. When you go shopping, withdraw only as much cash as you plan to spend. Leave the debit and credit cards at home. When you're out of cash, head home for the day. You'll keep yourself from overspending.
Cut Extraneous Expenses
The best way to start saving money and avoiding debt is by cutting your household expenses. Start with cable television. Do you really need it? How many shows do you really watch per week? It rarely makes the expense worthwhile. A subscription to Hulu or Netflix costs less than $10 and provides far more shows and movies than you could possibly watch in a month.
Cell phones are another good place to slash bills. There are monthly, no-contract cell phone plans for less than $40 a month. Prepaid phones are great if you rarely use your phone. Using coupons when grocery shopping, dropping your thermostat by 5 degrees, turning off power bars when nothing is in use, and making minor home repairs yourself are other great ways to save money.
Exhaust Options Before Borrowing Money
After all that, if you're still in a tight spot and absolutely need extra cash, exhaust other options first. Start by selling unused items. Do you only use your snowblower once or twice a year? You can get a few hundred for a used snowblower, putting money in your pocket. The same is true of unused kitchen items, recreational vehicles, jewelry, toys, electronics, and more.
If you have nothing worth selling, talk to your church, friends, and family about a loan. Make sure you sign a contract and pay the person on time. If all else fails, shop around for a cash advance loan with terms you know you can manage. Pay that loan back on time and avoid rolling it into a new loan when the payment becomes due.
Seek Help From a Debt Counseling Company
If you're in over your head and don't see a way out, talk to a company that specializes in debt relief. They can work with lenders, credit card companies, and debt collectors to get you back on your feet and debt free.
Living from paycheck to paycheck is definitely stressful, but it doesn't have to be your way of life. Follow the above tips and start taking back your finances and living a financially savvy lifestyle.