Do you find yourself staring at the calendar and counting down the days until your next paycheck? Is your paycheck already spent before it’s even deposited? Do you wonder how you’re going to pay your bills? According to a recent study, 65% of Americans are currently living paycheck-to-paycheck. Challenging economic times have not helped as more workers are feeling the added financial stress from layoffs, furloughs, or pay cuts. However, there are strategies you can use to help break free from the cycle and finally stop living paycheck to paycheck. Below are seven ways to help you save more and worry less.

1. Start a Budget
Starting a budget can help you control your spending, track your expenses, save more money, and stay accountable. Budgeting provides a roadmap on how to spend your money and can help you make better financial decisions, prepare for emergencies, get out of debt, and stay focused on your long-term financial goals. Begin with income and be conservative when it comes to bonuses or overtime. Track your income on a notepad, spreadsheet, or use an app like Credit Karma® or EveryDollar. For more insight about tracking your spending, see our blog post, How to Track Your Spending in Today's Modern World.

There are a few popular budgeting methods you can use, such as the 50/30/20 budget, zero-based budgeting, the pay-yourself-first budget, and more. Learn about budgeting from our blogs at sdccu.com/blog.

Next, list all your expenses for the month, including rent, phone, food, internet, and everything in between. For annual expenses like car insurance premiums, memberships, or subscriptions, simply divide by 12 to ensure they are accounted for. Since expenses change from month-to-month, you’ll need to be sure you adjust your budget before each month begins. Once that’s calculated, subtract all your planned expenses from your monthly income. The goal is to ensure that you are spending less than you are making. You will want a cushion of a few hundred dollars for your checking account to avoid overdraft fees in the event you underestimate your expenses.

2. Live Below Your Means
Now that you have a clear picture of your total income, it’s time to reel in the spending so you can save more. Adjusting to living on a budget can be challenging in the beginning as spending money is often fun and can feel good. However, tracking your spending and practicing sound personal finances can help you no matter how much money you make. Often, a bump in pay can make you spend even more. It’s tempting to spend more money when you’re making more of it, but it’s important to ensure you are saving. Pay attention and stick to your budget no matter how big your raise. Think about cutting services you hardly use or negotiate with your service providers for discounts to save extra money, or cancel subscriptions altogether if you truly don’t use them. 
 
Paying with cash can also help you save money when you live paycheck to paycheck. It will help you think twice when you physically have a limited amount of cash to spend, which can reduce impulse buying. Research shows that people are twice as likely to spend more money when using a credit card than they would using cash. Eliminate unnecessary fees on checking accounts by looking for free checking accounts that don’t require minimum balances and have no monthly account fees. SDCCU offers Free Checking with eStatements with no monthly account fees. Additionally, stay on top of your loan payments to avoid paying unnecessary late fees. Revisit your credit score for opportunities to improve your score since higher credit scores can translate into lower loan rates.
 
3. Start a Temporary Job or Side Hustle
If you still need more income after cutting expenses, you may want to take on an extra part-time job, if possible. This could give you extra income to cover expenses, save for big-ticket items, or pay down debt. Finding other ways to increase your income is the most effective way to stop living paycheck to paycheck. Ideas to make extra money include driving or delivering for rideshare apps or seasonal retail work. There are plenty of work-from-home jobs that can be done after hours or on the weekend, or you can do odd jobs around your neighborhood, like cutting grass, picking up leaves, babysitting, or dog walking. There are also apps that allow you to sell items you don’t use, like OfferUp! or Poshmark. This doesn’t have to be a permanent side hustle, but you’ll want to work at least until you pay off some bills and have a stronger financial situation. 
 
4. Set Aside Money from Your Paycheck
When you get paid, redirect 10 percent of your direct deposit into a savings account automatically. If 10 percent feels like too much, start  small, even with as little as $20 a paycheck, and the savings will add up over time. Mark the account as your emergency fund, with the first goal of saving one month's paycheck. Then, keep increasing the percentage of your paycheck that you save and if you get a bonus or a gift of cash, divert a big part of that into savings, too.
 
5. Stop Using Your Credit Cards
If you’re carrying a lot of debt, it’s likely eating up a big portion of your paycheck which can hold you back from doing the things you want to do. Of course, it’s more difficult to get out of debt if you continue spending money on your credit cards. Consider not using your credit cards altogether until you are completely out of debt. If it proves too tempting, cut up or remove them from your mobile wallet except one and put all credit purchases on the remaining card. Pay that credit card off each month. While you're doing this, avoid taking on other types of debt like an auto or home loan until you have gained better control of your finances. Your emergency fund can help you pay for car repairs and cover other unexpected expenses so that you no longer have to rely on credit cards to get out of a tight situation.
 
6. Learn to Cook
Food expenses can take up a significant portion of your budget, and it’s cheaper and healthier to cook at home than to eat out. If you don’t know how to cook, don’t worry. If you only have a small amount of basic ingredients, you can still whip up a delicious meal for yourself! There are many free recipes and videos online, that can help prepare you to cook and provide direction on what ingredients to buy. Learning to cook will save you a lot of money on dining out, it's relaxing, and you get to enjoy the fruits of your labor!
 
7. Refinance Your Mortgage or Auto Loan
If you have a home mortgage, it may be time to talk to a lender to see if you qualify for a refinance. This will depend on various factors, including your income, current interest rate, debt-to-income ratio, and credit scores. If you can secure a lower rate, crunch the numbers to make sure the savings outweigh the costs. If your credit score is preventing you from being able to take advantage of lower rates, plan to spend a few months on improving your credit score before. When mortgage rates are low, you may be able to save hundreds of dollars a month with a lower interest rate. SDCCU offers low rate conforming home loans in California.  

You can also consider refinancing your auto loan with a lower interest rate, which can help you pay off your loan faster or lower your monthly payment depending on the term you select. Make the smart choice and start with SDCCU to find an auto loan that’s right for you. 

Visit our Financial Knowledge Blog to learn more tips on setting up a solid financial future or join us for Financial Wellness Wednesdays.