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The best
way to begin your escape from the paycheck to paycheck cycle is to save first
before you do anything else with your money. Set up a savings account with an
automatic transfer to send a little there right away.
You might miss the money, but if it’s out of your hands, you’ll be less likely to spend it.
If you don’t have high interest rate debt that needs your financial attention immediately, give yourself a goal of saving at least 3 months’ worth of expenses. One of the reasons people end up living paycheck to paycheck is that they encounter an unexpected event like large car repairs, a big medical bill, or a job loss.
To avoid going back to the paycheck to paycheck cycle ever again, establish an emergency fund.
Eventually, you’ll want to invest for retirement. If you have access to a 401(k) or an IRA at work, take advantage of it. Since the money comes out before it even hits your paycheck, you’ll barely notice that it’s gone.
You might miss the money, but if it’s out of your hands, you’ll be less likely to spend it.
If you don’t have high interest rate debt that needs your financial attention immediately, give yourself a goal of saving at least 3 months’ worth of expenses. One of the reasons people end up living paycheck to paycheck is that they encounter an unexpected event like large car repairs, a big medical bill, or a job loss.
To avoid going back to the paycheck to paycheck cycle ever again, establish an emergency fund.
Eventually, you’ll want to invest for retirement. If you have access to a 401(k) or an IRA at work, take advantage of it. Since the money comes out before it even hits your paycheck, you’ll barely notice that it’s gone.
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