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  • Writer's pictureTerry Banks

How to Get Out of Living Paycheck to Paycheck - 3 Strategies

The past year has been challenging and eye-opening in many ways including financially. As these experiences get added to our collection of lessons learned, we can use the new knowledge to be prepared for the future. Here are 3 ways to celebrate Financial Literacy Month to help get you out of the paycheck to paycheck budget begrudging mindset and into taking pleasure from adulting.

A cup of coins with a plant

Create a Spending Plan that honors your true priorities.

It’s likely that self-reflection increased during this time of reduced access to theatres, concerts, eating out and frolicking in general. What questions did you ask during those times when you wondered how to support yourself financially if your income was affected by the pandemic? What did you realize had more meaning than you thought? What did you find that no longer brought you as much joy as you once thought. Only you can know what is true for you. Use these revelations to design a budget that supports living a life that’s in alignment with your true priorities.

“Create and use a budget.” is one of the answers to the question, “How do I start being financially responsible”? Actually knowing when and how much money is coming in and when and how much is going out provides clarity. A key piece of the cash flow puzzle is using the difference between income and expenses to your advantage. The difference can be used for many things that propel you like an Emergency Fund, paying down debt or saving for things on your bucket list.

Leonardo DiCaprio from The Great Gatsby raising a toast with the text, "The face you make when you pay yourself first"

Create a Savings Plan that unlocks your dreams.

Now that you have a grasp on the flow of your income and expenses, use your new budget to do more than live paycheck to paycheck. Beyond the Emergency Fund that can replace a loss of income, you can also save for things that bring you joy. Cabin fever may have you feeling like you need to go outside and play. Vacations, road trips, and long weekends give us something to look forward to. Imagine how a savings account dedicated to travel would make you feel. Imagine that same account growing enough to pay for your getaway before you even make a final decision about your destination. With your travel fund in place, it’s easier to resist the temptation to throw caution to the wind and just put it on the credit card and pay later. Not paying high interest is just one of the many benefits of being financially responsible.

A lizard on a car window with the text "YALL TRYNA SAVE FIFTEEN PERCENT OR NAH"

Create a Debt Elimination Plan that will free you from the burden of obligation.

Use the clarity of your Spending Plan and the hope from your Savings Plan and use debt elimination advice to experience debt free living. Indebtedness is in the way of living the financially sound life that we envision. There are many debt elimination strategies that can be used to accelerate your debt free date. Imagine what could change for you if your credit cards had a zero balance. What you allow yourself to dream about and save for if your current credit card payment could go towards your Savings Plan instead? How would that affect your travel fund?

A picture of Jesus peeking by the side with the text, "You still owe Columbia House for the 30 CD's you got for 1 cents in 1995"

How would your life be different if you implemented these strategies? Would getting the mail and checking email feel different when you saw a bill? How would having the option to set your bills up on autopay free your mental energy and time? What else would change that would improve your quality of life?

Utilizing a Financial Coach is like having a personal trainer for your money. Find out if a mentor, accountability partner, guide or cheerleader is right for you by scheduling your FREE 30-minute Q&A call.


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