t can be daunting. The well looks deep and doesn’t seem to have a bottom to it, when you owe money and the incoming doesn’t meet the outgoing. Living paycheck to paycheck will be a lifelong struggle for some people. It’s hard to get ahead when you can never raise your head above water! And life is expensive: rent/mortgage payments, food, school and/or car payments, gas for the car and heat for your home, utilities and the like eat up what little you probably have, leaving you very little left over at the end of each paycheck. It seems like a losing battle most days.
If you are tired of the grind – work, get paid, pay the bills, have no money left over, work some more and continue to drown in debt – try making some changes to improve your financial situation. Believe it or not, there are things you can do to get your head above water and maybe even start swimming toward a more financially secure life:
- Consider ways you can make additional money. Sometimes stemming the outflow is tough, so consider increasing your top line (your income). In this economy, there are a myriad of things you can do as a part-time gig without having to work tons of additional hours or kill yourself with a backbreaking job. Many people make money buying and selling things online; do you have nice, gently used goods you could post for sale, or could you be a middleman/woman for friends who have things to get rid of? Put up flyers, or talk to people you know to find the things for sale. There are also part-time jobs like dog walking, babysitting, house cleaning, lawn mowing and the like. Many older people need rides to doctors’ appointments or to buy groceries. And then there are organizations like Rover.com, Wag.com, Care.com, Lyft and Uber where you can become a member and have opportunities come your way. See what additional sources of income you can generate if you just can’t seem to have anything left over.
- Once you have a little bit extra to spare, pay down debt. There are few loans today where the interest rate is as low as what the money would yield in a checking or savings account. In fact, credit card debt is sometimes at interest rates ranging from 14-21%! This means if you are paying the minimum each month you are actually losing money. That beautiful pink shirt you thought would change your world, that cost $25 when you bought it, could actually cost you $60 over time once you pay the interest on the purchase! Most items will eventually run 2-3 times more than their original price after you factor in the interest you are paying if you aren’t careful.
- And speaking of that pink shirt – do you want it or do you really, really “need” it? Need is such a relative term, but when you are in financial difficulty needs should be limited to food and heat. Yes, you want to give your children a nice life and go to the amusement park; yes, you need to dress well for that upcoming interview; yes, you would like to go out with friends and forget about your financial troubles for one evening. All of these things are fine and good, but you have to be very judicious about what you choose to spend your money on. Do not make any purchase you do not absolutely have to make without thinking about it overnight. The sale is ending today? Well, you probably will find another pink shirt somewhere else. You do not want to buy anything that isn’t a necessity without giving yourself time to think about the purchase, checking your balances to see how much debt you currently have, and allowing yourself the space to determine whether or not the answer is “yes, it is worth it”. You will find that most things are not worth it in the end!
- Consider working with a (free) financial counselor. Talk to your church or synagogue for recommendations, or go to the local library to find resources, or your workplace if you have an EAP (employee assistance plan). There are often more free or very low-cost resources around than you might think, and having someone to hold you accountable can help keep you on track. They may be able to negotiate with your credit card companies, too, and possibly help you find higher-paying savings accounts and lower-interest credit cards as well.
- Set goals. If you don’t have clear goals, with numbers and timelines, you won’t move in the right direction to get to your end state. Make sure the goals are reasonable; it’s important to set something measurable, but realistic. What determines “realistic”? You do. Make sure you will be able to stay on track, keep focused and do not get discouraged. And reward yourself when you reach a milestone. Don’t reward yourself by buying something – “Retail Therapy” is only a temporary fix that leaves a hangover when the bill comes. Reward yourself by doing something you enjoy that doesn’t cost money.