Yesterday, we got to see an encouraging post about a family who, by age 30, were debt free (including their house). Well today, we are going to get a little more basic and see 5 easy steps on how to stop living paycheck to paycheck. This is blog post is from askawayblog.com.
Well, maybe you do... maybe you just don't realize how you are spending all that you make. And if you don't make enough then there's still a way to pinpoint how much more you need a month.
So here are 5 easy steps to start the process of financial freedom and stop living paycheck to paycheck.
1. Write down all of your monthly bills/expenses.
These would include rent, mortgage, car payments, credit card bills, utilities, memberships, etc. Subtract the total of those monthly expenses from your monthly take home pay.
2. Check your spending from the past month.
Pull up all your bank statements and any receipts you have for a whole month and see where all the rest of your money goes.
3. Analyze your spending.
You'll need to figure out which of those expenses can be deemed necessary or which are able to be reduced. Starbucks every morning can be reduced. Even a grocery bill can be reduced if you shop smart. Then break all of the expenses into categories like this:
Entertainment - movies, etc.
Restaurant/Dining Out - Lunches you buy during the week, fast food, date night dinners.
Miscellaneous - Random things that really don't have a category at all!
Groceries - Food and toiletries.
4. SPLIT!Look at the number you got from subtracting your monthly expenses from your income. And then look at how you can divy that number into all the categories you made in step 3.
5. Create a cash envelope/ budgeted spending system.
You can refer to my post on a cash envelope system in order to discipline your spending to only a certain amount for each category This way, you aren't depriving yourself, you're just living frugally. And this post has ways to actually make a fun envelope system!