How To Make Your Money Last When Living Pay Check to Pay Check

Money management isn’t something that comes naturally to everyone. In fact, many people struggle with it their whole lives. It doesn’t matter how old you get or how much money you earn, if you can’t manage your personal finances, it will only get harder as time goes on. The sooner you start thinking about money and planning for the future, the better off you’ll be in the long run. Living check to check is a taxing financial situation to be in. Many of us are in this position because of rising costs of living and stagnant wage growth which has led to an inability to save money and put aside funds for future expenses such as retirement or buying a house. It is not something anyone wants to continue doing indefinitely, but fortunately there are ways to make your money last until things get better — fast.

Make A Budget And Stick To It

This might feel like the most basic tip, but it is the most important tip. If you don’t have a budget, you don’t know how much money you have, so how can you plan to make your money last? The first step is to make sure you know what you have coming in each month and what you have going out each month. You can use a budgeting app or spreadsheet, manually write it down in a notebook, or join an online budgeting community for extra accountability, but you must have this information. Once you know how much money you have coming in and how much goes out each month, you can start creating a budget. It is important that you stick to your budget as closely as possible. Keep in mind, though, that a budget is not a one-time thing. You need to review and update it regularly — at least once a month if you want to keep on top of things and avoid going over budget.

Emergency Fund

Emergencies are a regular part of life, and if you don’t have an emergency fund, they can cause you to go into debt and make it even harder to make your money last. You never know when an emergency will happen, and if you don’t have an emergency fund saved up, you will have to make a difficult decision every time one pops up. When you have an emergency fund, though, you’ll be prepared to handle anything life throws at you without having to rely on debt or credit cards. An emergency fund should be about six months’ worth of expenses saved up in case of an unplanned expense. Other people prefer to have three to six months’ worth of mortgage payments saved up in case they lose their job and can’t make their mortgage payment. It depends on your personal situation, but it is something everyone should have.

Pay Off Debt

There are plenty of arguments for and against paying off debt versus investing, but if you are living check to check, you typically don’t have the luxury of being able to pay off debt and save at the same time. Debt payments are likely the biggest outgoing on your budget, so it is essential that you pay off any debt you have as quickly as possible. Credit card debt is the worst kind of debt because the interest rate is often so high. The sooner you pay it off, the sooner you can stop paying those outrageous interest payments that are literally eating away at your money. If you can’t pay off your debt in a single go, you should at least try to pay more than the minimum payment every single month. Even if you can only pay a little extra, it will help get you out of debt faster and save you money in the long run. It is important to remember that you don’t have to pay off your credit card debt with your emergency fund money. Instead, you can use money you’ve saved up in a separate savings account so that you don’t have to go into debt to pay it off.

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Monitor Your Credit And Equity

Your credit score is important because it impacts almost every aspect of your financial life. It can decide if you get a loan, what interest rate you get on that loan, and even if you get hired for a job. It is something you should monitor regularly to make sure you have a good credit score, and you can do that for free at CreditKarma.com. There are several other free credit score websites out there, so pick one and make sure you check it regularly. Your credit score can also impact how much money you can borrow against the equity in your home. If you want to take advantage of this option, you should check your credit score first to make sure it is good enough to qualify.

Save For The Future

It doesn’t matter how much debt you pay off if you don’t save for the future. If you have the money to do so, you should be putting money into a 401k or Roth IRA account to save for retirement. If you don’t have enough money to contribute to these accounts, you should at least be putting money into a savings account. Since you are living paycheck to paycheck and might not have enough to put money into a retirement account, this is the best place to start. It can be difficult to try and make your money last when living check to check, but there are ways to do it. Hopefully, this guide has given you some helpful tips on how to make your money last.

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