It's often not easy to strengthen your financial position, but these strategies can lead you to a less stressed-out life.
If you find yourself living paycheck to paycheck, know that you're far from alone. In fact, you're in the majority in America. A recent survey found that fully 61% of U.S. consumers report living paycheck to paycheck -- waiting for their next work payment in order to cover their expenses.
It's a stressful way to live, and changing that situation is definitely easier said than done. Still, there are some strategies you might employ to try to get yourself to a better financial position.Acting on only a few of these strategies might make a positive difference in your life. Acting on many could make a big difference.
Here are some ideas.
Image source: Getty Images.
Use a household budget
The thought of budgeting doesn't excite many people, but it can transform your financial life. To build a budget, you'll need to take stock of exactly how much money you have coming in, and then plan how it will all be spent -- on housing, food, transportation, savings, and investments. I mean everything.
Tracking all your spending (such as by going through bank and credit card statements) can be eye-opening, helping you see how much you spend on various categories, and perhaps inspiring you to cut back on some. You can also use a budget to save for upcoming big expenses, such as a new car or a new roof.
Automate your financial life
Automating your financial life means setting up as many autopayments as you can. You may be able to automatically direct a portion of your paycheck to go to certain savings or investment accounts, for example, and you might have certain bills paid automatically, too.
Consider downsizing parts of your life
Living paycheck to paycheck often means that some of your expenses are just too big. It might make sense to downsize in one or more ways. For example, you might shed one vehicle from your household, if possible, to save on insurance and repair costs. You might get a housemate or apartment-mate for a while, too, to greatly reduce housing costs. You might even consider relocating to a lower-cost home.
Get out of high-interest rate debt
Lots of us are saddled with debt. Some of it, such as mortgages, is kind of unavoidable, but at least that tends to be lower-interest rate debt. If you're carrying high-interest rate debt, such as that from credit cards, it's vital to pay that debt off as soon as you can. Once you have, you'll likely be able to keep more of your dollars in your pocket instead of spending them on interest.It might be worth looking into refinancing or consolidating some debt, too.
Ask for a raise
It can be hard to ask for a raise, but it can be well worth it. Per a report by the folks at Payscale.com, while only 37% of survey respondents had asked for a raise, among those who did, a whopping 70% got one -- with 39% getting as much as they'd asked for.
Train for better-paying work
If you have a lot of working years ahead of you, consider spending some effort making yourself eligible for higher-paying jobs. That might require earning another degree, certification, or professional designation -- for your current career or a new one.
Take on a side gig or two
Many people are working side gigs these days, and you may be able to bring in valuable extra income by doing so, too. Spend some time researching side gig ideas, and think about which of your skills might be the most satisfying and lucrative to employ.
You might, for example, give music or language lessons, make and sell things, start walking a lot of dogs in your neighborhood, or drive for a ride-sharing service.
Set up an emergency fund
Be sure that you have a well-stocked emergency fund that can support you for at least a few months. If you don't, you can end up facing a financial expense you can't pay for. Many people lose jobs or suffer health setbacks unexpectedly -- or they simply need a new transmission for their car. Be prepared for such events with an emergency fund.
Live below your means
If you're not already doing so, aim to live below your means -- which means spending less than you bring in. It can help to seek out coupons and discounts for items and services you need to purchase.
Consider some out-of-the-box strategies
A little creative thinking and/or online research can turn up all kinds of ways to save money or make money -- such as renting out a parking space in your driveway or learning to give your family haircuts. You might try playing games with yourself, too, such as only allowing yourself to spend money every other day, having occasional no-spending weeks, or only allowing yourself to eat out once a week or once a month. It can help to carry little or no cash on you and perhaps no credit card, either.
Shift your mindset
Some folks can benefit by shifting their mindset to one that values saving over spending. If you often shop for fun, whether online or in stores, find other ways to unwind. Seek free or low-cost forms of recreation, such as reading library books, playing board games with friends, or gardening. If you like working out, you might quit your gym and use exercise equipment at home -- or just take up biking or running. Learning to be happy with less can pay off handsomely.
Start thinking about your future and retirement
Finally, no matter your age, start thinking about your future financial needs, and as soon as you're able, start investing for that time. Otherwise, you may end up living Social Security check to Social Security check, which won't be pleasant.
These strategies may not be easy, but if you can implement one, two, or more, they may help you stop living paycheck to paycheck and start living a less financially stressful life.
