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Let's talk money.

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According to a career builder survey, 78% of American workers are living paycheck to paycheck. That's over three-quarters of the working population seemingly not having anything left over after paying bills and attaining their necessities. That, presumably means, much isn't left for personal savings and any debts they have aren’t being paid down much or at. Does this seem familiar to you? How did we get to this point? Some of it may be due to housing debt, credit card debt, but overarching, it's simply the high cost of living. So what can be done about it? While we'd love to be able to tell you there's an overnight fix, there isn't one. However, there are some financial habits you can adopt in order to feel your money belt loosen over time.

First, establish a budget. Could you see this one coming? No Invested blog would be complete without the mention of establishing a sold budget. It's 2019, so if you can't create one on your own, there are available templates and examples on the internet. The most important components are your itemized expenses, take home earnings per check and debts per month. Seeing these numbers will give you a great picture of where you should end up at the end of the month (Assets minus Expenses= Net worth). Did you break even or did you go over your income? If you broke even, you know that your income allows you to cover your essentials. What you’ll need to look at is what expense can be shaved down some and also factor in your common non-essential purchases to see what's taking you over the edge each month. If you went over, it's a sign that you're not making enough for your essentials and you really need to rethink your living situation. From this exercise, you should be able to see what you're able to manage. After that, decide to stick to a comfortable specified cash amount for each category of your expenses and discretionary spending each month and be discipline to not go over it.

Next, you want to decrease spending and increase savings. We all know it, but are we doing it? Decreasing spending takes discipline that comes with time, but the first step is to identify the non-essentials. Pick a day to look at slashing every non-essential purchase and even reducing the cost of your bills. We like to say slash that morning coffee as a common purchase, but what about the weekly happy hours? After work outings add up after drinks and shared apps. Eating out for lunch every day? Plan a menu for the upcoming week and cook so you can brown bag it to work. Looking to reduce gas usage? See if there's a carpool option between coworkers at your job or pick a few days that you'll use public transit. Speaking of transportation, you should think about if having a car is worth it at all if having a car isn’t crucial to getting to work or getting about your community. Would it be cheaper to get rid of it and get a zip car as needed? Think about your personal situation and be honest about what you can be comfortable with and reexamine whether to keep those conveniences we think are essentials that are actually just convenient. Also, take a look at your insurance coverage and other bills to see what you're paying for and if you can reduce payments by removing features you don't use.

When you can decrease your spending, you’re able to repurpose that money to go towards saving and reducing debts. If you have debts, decrease them by first focusing on paying down the debt that has the highest interest rate. Simultaneously, you should also be adding funds to your savings and building an emergency fund.

To stop living paycheck to paycheck, you should also try to increase income. Duh! Right? Now to be fair, it’s improbable that you can go ask for a raise at work and expect to get it, but by all means try. “The squeaky wheel gets the oil.” If that doesn’t work, take our intended approach- a side income. When you've created a budget and decreased your spending, give yourself further breathing room by creating a new stream of income. Now, this may be easier said than done and possibly not-practical if you work full time and have a full plate of personal commitments, but if you can find the time, exploring other options can be beneficial. We're not saying create a whole new business; that's a new set of expenses you can’t reasonably handle right now. We're referring to things you can do that require little capital, like Lyft driving, doing a data entry job from home, or selling old items from the comfort of your home. Create a side hustle from an activity that comes naturally to you like doing hair, graphic design help for startup companies, content editing, house cleaning, babysitting for new parents, or be a personal shopper for a busy family. There are options out there and there could be one right up your alley. “Necessity is the mother of invention!”

Also, it's a good idea for increasing your take-home paycheck to review your tax withholdings. If you typically get a refund at tax time, you can change your allowances to get you to the appropriate withholding that won't give you a big refund or have you owe, thus allowing you to have more money in your paychecks during the year. Would you like to have more of your money upfront than wait to get a lump sum once a year?

Lastly, we'd be remised if after successfully navigating your journey of escaping the paycheck-to-paycheck hold, we didn't suggest that you include investing in your plan. With a little more money back in your pocket, you've definitely earned the chance to buy some wants, but just as the high cost of living had you in a bind in this time around, it will continue to increase in the years to come, so you want to make sure your buying power stays on par later in life. The best way to do that is to invest as early as you can. You'll have money that is growing at a higher rate and more consistently than your savings account. Look to include these steps in your financial plan for a month or two and see where you end up. Remember, you’ll have hiccups along the way. Decreasing spending cold-turkey is tough, but when you can achieve small goals like having $5-$10 more left a week than before, you can rest assure that your efforts will continue to compound and get you to your financial goals. Stick with it and feel free to ask for help from a fiduciary advisor. Let’s decrease that 78% statistic together.

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