Living paycheck to paycheck
Do you deposit money in your savings account regularly? If you had an emergency now, do you have an emergency fund that can help you get through for at least 3 months? Even when we’re doing well and the economy is prosperous, we can’t consistently answer yes to these questions because we just love to spend.

In my post about “things you should never do with money” I mentioned that we as consumers have many distractions and our attention is often diverted to the popular trends causing our “want list” to grow. It really is a matter of discipline and a willingness to break bad habits. No one likes to be pessimistic about their own finances and some do not even like to talk about them with their spouse or relatives. But denying yourself the reality of your situation will only worsen the outlook of your future.

Throughout the country more and more people are living paycheck to paycheck, and there are of course circumstances in which you simply do not have any control over this because of other larger and more serious debts that are sometimes acquired through unforeseen events. But for the spendaholics, you do have some control over what you get into debt for and that’s where you would need to begin to fix your bad spending habits.

Economize on everything
Take a look around your home and try to think about what in that house you’re still paying for. Obviously your furniture is a necessity, but what purchases did you make that are not really that practical and yet you impulsively bought. Perhaps that fancy mirror above your fire place, or that decorative set of vases you couldn’t resist. These are all impulse buys, and you probably have more on your list that you eyed last time you were at the mall.

Outside of these impulse buys, which you need to stop doing, there maybe other things that you consume that you don’t really need. Do you pay for premium channels? You may want to consider bringing your cable service to a more basic level. Do you have every little feature the phone company offers on your phone service? How often do you use them and do you really think they’re beneficial? How about just cutting the land line out completely and using your cell phone instead?

Do you really need a low deductible on your car insurance? Many people think it’s a good idea to have a low deductible, when they have had a good driving record almost all their lives. If you’re a responsible driver, you should not be worried about this. Your insurance company is going to encourage this because they make more from you this way. It’s a good seller and a lot of people are doing it benefiting mostly their insurance companies.

Does your credit card company contact you often to offer you savings programs? They will tell you that if you buy through their programs you can save enormously when using your credit card. The program of course costs $29 a month charged to your credit card. Don’t take the bait, it’s all another way for them to make money off of you. You’re better off cutting coupons for savings. As a matter of fact stop using your credit card as much and use it only for things you need when you’re out of cash. Everyone sometimes forgets that that’s what credit cards are for and not to buy the latest gadget you just have to have.

To some people having a social life is everything and this means going out to dinner with friends, going to public places for drinks and company, it’s all fine and great, but how often do you this? If you’re out every weekend “socializing” in public places more than likely you’re shelling out $50 to $100 dollars a night depending on where you life. If after paying your bills, you use whatever you have left of your paycheck to party, you’ve got some serious deficits building up.

Utility bills are always up and down and it’s hard to regulate especially if you have a large family, so cutting down on utilities can be tough, but if you concentrate on regularly cutting down on everything above your paychecks should start making their way into your savings account more often.

What other services do you subscribe to that you hardly ever use? This includes magazine and newspaper subscriptions, newsletters etc. Make it a priority to start growing your savings account balance. If it’s difficult for you to break the habits, try increasing your contributions into your 401k, IRA or sponsored savings account, that way you only have enough to spend on bills you must pay.

Whatever approach you choose is fine as long as you begin sending more of your paycheck into an account where it will serve you better in the future, and as long as you begin now.

Related Posts

• March 1, 2008 -- Are you considering bankruptcy? (1)
• June 13, 2008 -- Bankruptcy filings continue to skyrocket (0)
• May 2, 2008 -- Things you should never do with money – Part II (0)
• April 22, 2008 -- The subprime crisis is already here (0)
• April 2, 2008 -- Things you should never do with money – Part I (0)