Struggling to manage your money? Or maybe you’re just trying to get ahead of your paycheck to paycheck lifestyle. There are a lot of guides out there with tips on managing your money, but it’s nice when it comes directly from a professional, such as Pine Advisors.
- Make a budget. You’d be surprised how many people wing it when it comes to budgeting their money. There are many free budgeting worksheets available online. You can even just sit down with a pen and paper and write out everything you owe, everything you make, and anything extra to account for. Don’t forget to include things like gas, food (and use realistic numbers, especially if you dine out a lot), car maintenance, and medical purchases (such as prescriptions and over the counter meds you buy regularly). These items are often overlooked and sneak up on you.
- Start or add to your savings account. If you don’t already have a savings account start one. Once you’ve gotten your budget worked out, choose an amount that you can add each payday that won’t hurt you in the current month and religiously stick to it. The general rule of thumb is to have 3 months of pay stored in your savings should an emergency come up. The hardest part is DO NOT TOUCH IT UNLESS YOU REALLY NEED TO. One of the hardest things for people to do is not tap into that “buffer” on a whim (such as wanting a new tv or other non-necessity) because you know it’s there. That way of living will never get you past living paycheck to paycheck.
- Drop what you don’t need. Call your cable and phone company and negotiate cheaper rates. Drop things you don’t need. Not watching that HBO subscription? Not using nearly as much data as you’re paying for? Drop it to a lower plan!
- Meet with a financial advisor. The counselor may advise you on things you haven’t thought of and resources you didn’t know you had, such as finding lower interest options on your loans or credit cards or improving your credit score by disputing negative, outdated or incorrect marks on your credit report. Check your credit report yearly through your bank, credit card company, or even a free site like Credit Karma and make sure it is accurate. Most financial advisors will help you through this process and may even help dispute negative marks, which will boost your credit score and, in turn, get you better interest rates.
- Consider a retirement plan. When you’re living paycheck to paycheck, it’s hard to put away money for your future. Look into what your job offers for IRA or 401k. Many companies offer great matching policies (matching dollar to dollar to a certain amount). A financial planner can also help with things such as college funds, life insurance options, and disability insurance.
Most of money management is a lifestyle change, but you will be much more comfortable in life with the peace of mind that having financial stability provides.
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