Feeling Stressed About Living Paycheck To Paycheck?
You’re out with a family member, a close friend, or maybe even a particularly trustworthy co-worker. You’ve met to catch up on the holidays over tapas and wine. It’s all going well until the conversation turns to finances, as it usually does. Someone brings up their mortgage rates or someone else mentions their vacation plans, and before you know it you’re admitting your finances aren’t where you thought they’d be at this age.
At this point, you may feel like you were Jeff Sessions giving his testimony about Russia before Congress. A little sweat collects at your hairline as you try to answer their pointed questions about what you do with your money. And just like Sessions, you don’t come out of their interrogation totally unscathed.
It’s because, like most Americans, you don’t have savings set aside to help you with that mortgage or exotic trip away. Roughly 60 percent of the country isn’t prepared to take on unexpected household bills, repairs, or medical emergencies amounting to more than $500. That’s because the number blinking in their account balance is too low.
This isn’t just a problem of the lower-class. Ask anyone and they’ll tell you pain-free finances are a myth — even if you make a 6-figure salary. In 2015, the research company, MaritzCX, polled people with investable assets of $100,000 to $10 million. One in five of those with assets measuring between $100,000 and $1 million and one in ten with assets measuring between $1 million and $10 million thought they had too much debt. Nearly half of all respondents worried they won’t be able to support themselves through retirement.
It’s proof that it doesn’t matter how much you make. If you spend beyond your means, you’ll live paycheck to paycheck with no way of preparing for retirement or covering emergencies.
It sounds grim, doesn’t it? So let’s gain some perspective. At least your “trial” over tapas happened in a private setting with a trusted loved one. Though stressful and a little embarrassing, it doesn’t relate to treason, nor does its results pose any significance to the country at large. Phew! That can take some of the sting off your financial situation.
But not all of it. It’s still a reality that you must face. Whatever your lot in life, you have your hurdles to clear. The important question is how you face certain obstacles and vault over them.
You won’t clear a single hurdle without a budget. A household budget is an indispensable tool that draws the clear boundaries of your means. It tallies your total income for the month, so you’re aware of how much cash you have to work with. If you spend time figuring out your average expenses, you can also uncover where you’re wasting your cash.
Too few people go without a budget. A Gallup poll revealed nearly 60 percent of Americans don’t use one. It’s no coincidence that the results match up with the number of people who aren’t prepared for an emergency exceeding $500.
It’s time you see what a budget can do for your financial situation. Don’t worry if you’ve never made one before. It won’t be easy or fun, but it’s not any harder than the uncomfortable conversations you’ve had in the past. You can also make it easier on yourself by looking for help online.
There’s a lot of advice out there. People who were just like you before they started a budget often share the ups and downs of their journeys towards financial security. Reading their experiences can bring relief to your own, as you learn you aren’t the only one struggling to make ends meet. As you scroll through Instagram, seeing everyone’s extravagant travels and bougie brunch dates, it’s hard to remember this fact!
You can temper their advice with the help of established financial advisors and direct online lenders, many of whom, like MoneyKey, offer practical financial assistance alongside tested budgeting methods, savings tips, and other financial information. MoneyKey offers easy solutions for people who have to rely on payday loans or line of credit personal loans, with budgeting methods that fit limited financial capabilities.
It may not be simple, but neither is living paycheck to paycheck. Take the time to find solutions. Not only will you find a way to cover life’s surprise bills and repairs, you’ll also finally be able to set aside cash for investments and vacations. Best of all, you’ll be able to avoid the third-degree the next time drinks with a friend devolves into a discussion about money.