Do you feel like you’re living paycheck-to-paycheck, struggling every week to make ends meet? If so, you’re not alone. Almost half of Americans have less than $3,000 in the bank and report feeling financially vulnerable.
So what’s the cure for the paycheck-to-paycheck blues? Everybody’s situation is a little different, but small steps and a little planning moves you in the right direction.
First, assess your situation. How much money comes in every week, bi-weekly, or monthly? Gather all your bills together. What are your monthly expenses? Be realistic. Computers are nice, but all you need is a piece of paper and a pencil. Do you have money left over after the bills are paid, or do you run out of money and still have bills to pay? What can you do about it?
Develop a habit of conscious spending. When thinking about spending money, ask yourself these questions: Are my basic expenses covered? Do I really need this? What is truly important for me and my family?
If you find you’re short on money each month, figure out what to do. Do you need to increase your income? Cut expenses? Find a new job? Work more hours? Go back to school to improve your skills?
You have heard of “pay yourself first.” A quick and easy way to get a jump start on saving is to save part of your tax refund. Do you have an emergency fund for unexpected expenses? Even $500 in the bank can make a difference. Can you put $500 of your tax refund into savings? What about $1,500?
Another option for saving money at tax time is to get your taxes done for FREE at tax sites operated by IRS-trained volunteers. Tax returns can be filed electronically, and direct deposited to a bank account or debit card. If your family makes less than $52,000 a year, you may qualify. Call the United Way’s 211 information and referral line to find out about eligibility, what to documents to bring, and where to find a free tax site near you.
To encourage Americans to save, the Doorways to Dreams Fund (D2D), a non-profit organization, is sponsoring a weekly drawing with $100 prizes, for people who save at least $50 of their tax refund using IRS Form 8888. Ten people will win $100 prizes each week. To learn more about the drawing, go to www.saveyourrefund.org.
Whether you start saving at tax time, or start saving $5 a day, $5 a week, or $50 a month, you will be on your way to easing the crunch of paycheck-to-paycheck stress. Best wishes and happy saving!
Debbie Irwin is Community Economic Development director at United Way of Greater St. Louis, and co-chair of St. Louis Money Smart Week, April 5-12, 2014, with over 100 free personal finance classes and events offered throughout the St. Louis metro area. For more info go to www.moneysmartstlouis.org.
