Are you still living paycheck to paycheck even if you are earning a good salary? If yes, then, you are not alone.
Surveys revealed that a staggering 34% of Americans today don’t have any savings, while 69% only have $1,000 set aside for emergencies.
Why do Americans still live paycheck to paycheck, then? Here are the most common reasons why many Americans still suffer from a broken budget:
They Don’t Pay Their Bills on Time
Yes, many Americans don’t pay their bills on time. Sadly, it will cost you more down the road if you don’t pay your bills right on schedule.
Paying your bills after their due date will lead to additional fees and surcharges, not to mention that it can also affect your credit over time. It means that your future loans may incur a higher interest rate as a result. It also means you will shell out more for your mortgage payment or car loan.
Once you receive your bills, make sure you pay them right away. Automatic payments can also be set up so that the money will come out of your account before its due date.
They Don’t Pay the Minimum on Their Debts
Every time you prepare your monthly budget, you might be tempted to reduce your debt payments in the hopes of getting extra cash for future expenses. But this decision will only make you spend more on interest payments and harm your credit score at the same time.
Paying more than your minimum balance can help you save more money and get out of your debt much faster than doing otherwise.
They Try to Keep Up with Other People
Unfortunately, a lot of Americans are still living paycheck to paycheck because they are too busy trying to keep up with the Joneses. They buy the latest smartphones, the flashiest cars, and the most luxurious designer clothes, all in an attempt to show that they can also do what others do. But doing so can harm your finances. Instead of keeping up with others, try to live within your means.
They Don’t Have a Budget
Do you have a budget in place? Do you calculate the amount you have allotted for food, housing, personal expenses, and transportation as well as for your emergency fund and college savings? if you don’t have a budget and a financial plan, it would be impossible to stay out of debt or build up your debt.
They Have Impulsive Expenses
With all those sparkling displays in malls, it can be very enticing to grab something even if you don’t even need it. From sales promos to markdowns and discounts, you might feel tempted to make an unnecessary purchase.
But buying something you don’t need just because it is on sale doesn’t help you save money. Instead, it will only make you spend your cash on something unimportant. Try to refrain from these impulsive buys and save money instead for future and more important purchases.
Living paycheck to paycheck may still be rampant among Americans but hopefully, a day will come when this trend comes to an end once and for all.