Are you tired of living paycheck to paycheck? Do you cry yourself to sleep because you’re in so much debt? Do you hate your job and/or your boss? Then this post is for you.
First, you’ve got to get a sense of what you’re spending each month so take out a piece of paper and a writing tool and write down all your fixed expenses (expenses you must pay each month) plus include any miscellaneous expenses like beer Friday or daily Starbucks; or you can use our template. Retirement contributions should also be included. After you complete your list, you should see what you can cut.
Second, you’ve heard this before and I’m going to emphasize this is the main thing you should do, INVEST IN AND PAY YOURSELF FIRST! Set up automatic withdrawals from your checking to savings account and Roth IRA. You can start off by saving $50 a week. Now that you know your monthly expenses you can multiply this by 12 to get your total yearly expenses. You should have a minimum of 2 years worth of living expenses saved in a high yield savings account. Keep learning new skills relative to your desired job and industry as this will increase your salary. Consider Coursera which is an online education portal that offers affordable courses, degrees and certificates. Know your worth. Ask for a raise when you make significant impacts at work like improving a process or reducing expenses. As you increase your salary you should try to max out your retirement accounts. Need help with investing see our how to guide here.
Third, pay off debt with the highest interest first and consider refinancing if that is available to you per your credit score. Do not use retirement savings to pay off debt.
Fourth, focus on multiple sources of income. Always be on the look out for making more money. You can’t depend on just your day job because that is foolish.
Fifth, use coupons and bargain shop. Focus on buying what you need. It is better to make money while you sleep by investing it than getting into debt by buying things you are not really going to use or to keep up with the Jones’s.