A recent survey shows more than half of U.S. consumers are struggling to pay their bills, with several contributing factors including rising living costs.
54% of consumers are living paycheck-to-paycheck, according to an inaugural report from LendingClub Corporation. Additional findings reveal 21% of respondents “have little or no money left over after spending their income.”
Read more: 5 tips to teach your military kid about money
As a financial coach, I help many struggling to cover expenses and build their savings. Here are some of my tips to help you start.
1) Save automatically
My number one tip to save money is to make it a priority. If you’re not already in the routine of saving, you must build the habit. Setting up automatic savings will ensure you save first instead of putting it last in line.
Start a monthly transfer from your checking to savings of $25. If you can save more later, awesome. But if you can’t, you’ll save at least $25 per month. It may not seem like a lot, but remember — slow and steady finishes the race.
2) Review your income tax
Your current income is the first place to look to find more money. Do you know exactly how much taxes are withheld from your pay? Sure, a tax refund is nice to have, but that’s money you could be receiving each month instead of the end of the year.
Look at your LES or pay stub, then use the IRS Tax Withholding Estimator to determine if you have too much money taken out in taxes. If that’s the case, you can adjust it to start getting that cash in your pay.
3) Cut or reduce excess expenses
Don’t let “cut expenses” scare you. Reducing your costs doesn’t mean you have to give up your quality of life. No, cutting or reducing expenses means removing the unused and unloved things you’re spending money on. For example, if you rarely watch Disney+, why pay for it? Cancel your subscription and save the money. Other expenses you can reduce, include:
- Cell phone plan
- Storage units
- Eating out
- Grocery costs
- Service expenses (lawn care, car washes, cleaning)
4) Get a side hustle
When money’s tight, but you want to save and get ahead, sometimes the only way to do that is to earn more money. A side hustle is a way to generate extra income with more flexibility than a part-time job. Side gigs can be anything from driving for Uber to walking dogs on Rover to mowing lawns.
It’s up to you to pick a side hustle that helps generate the money you need and works with your schedule. Your side hustle money can help you pay down debt and build up savings.
5) Keep paying down debt
If you’re living paycheck to paycheck, you’re probably making the minimum payments on your debt. Keep it up! Paying off your debt will free up cash to increase your savings and quality of life. Not to mention, ridding yourself of debt early saves you money in interest payments. The sooner you get out of debt, the sooner those payments can go into your savings account.
Don’t let living paycheck to paycheck stop you from improving your financial situation. Take one tip and start working to build your savings.
Want more financial readiness tips? Download our complimentary 2021 Military Money Guide.
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