Taking Steps to Financial Freedom
We can show you how in just 4 easy steps.
“Can I get a new toy?” a little boy asked his mother while at the store. His mother replied, “Not today, we have to wait till Friday when I get paid.”
Does this sound familiar? Before the pandemic, approximately 49% of Americans were living paycheck to paycheck. Now, just one year later and that number has increased to 78%. Investopedia.com defines living paycheck to paycheck as “an individual who would be unable to meet financial obligations if unemployed because his or her salary is predominantly devoted to expenses.” Part of becoming financially successful is taking steps to end the paycheck-to-paycheck cycle.
Here are four ways to start taking control of your financial situation:
- Budget: Budgeting is the first step for getting out of the cycle of living paycheck to paycheck. Why? Because without a budget, you may be unaware of any personal overspending trends. Giving your money a job puts you in financial control! A budget will also allow you to see what your biggest expenses are and possibly where you may need to make some adjustments. It is important to remember that when you are creating a budget that you list all your expenses accurately. This allows you to see exactly how much money is needed in order to pay all your bills on time.
- Debt: Not taking on new debt is as important as paying off current debt and we’ll tell you why. Eliminating monthly debt payments will increase your cash flow and give you more financial freedom to save for purchases you might have otherwise put onto a credit card. By paying off debt the increased money you can save will eliminate the need to use credit cards to help make ends meet.
- Save: Speaking of saving, by working toward establishing healthy savings, you’re setting yourself up for success and lowering the stress of worrying about how you’ll pay your bills. Did you know that 38% of Americans use a credit card or must borrow money to cover an unexpected cost of $1000?
- Extra Income: An increase in income, even temporarily, can help end the cycle of living paycheck to paycheck. Take on a part-time job or look at selling unused or unwanted items you are no longer using. Use the extra income to pay down debt or put it into your savings.
Make 2021 the year you get ahead financially! We can help get you started by showing you how to take these steps in a way that works for your lifestyle. Contact Carrielyn Reynolds, Financial Education Coordinator at (207) 660-6267 or at Creynolds@newdimensionsfcu.com to schedule your personalized one-on-one session.