of Americans are living paycheck to paycheck. But while
around one-third of Americans, or 38 million households,
are living hand-to-mouth, they arenít technically
poor, according to the Brookings Institute, a nonprofit
that conducts independent research. In fact, nearly
one-third of households earning $75,000 or more annually
live paycheck to paycheck at least sometimes, according
to a survey by SunTrust.
this data suggests is that while you might climb the
proverbial corporate ladder and make more money, poor
financial habits can follow you, continuously sabotaging
your finances over the years. If youíre living
paycheck to paycheck, here are three common money
mistakes you might be making.
in five Americans spend more than they earn, according
to a Federal Reserve Board report. And 44 percent of
those surveyed by SunTrust agree that spending on
lifestyle purchases, such as dining out and
entertainment, is part of the reason they live paycheck
to paycheck and save less than they should each month.
few years ago, Michelle Schroeder-Gardner was living
paycheck to paycheck because she was spending about
$1,000 a month on restaurant meals and about $500 a
month on clothing. "At the time, I didnít realize
what kind of problem I had," said
Schroeder-Gardner, who now blogs about personal finance
at MakingSenseofCents.com. "I was young and not
very smart about money, plus it seemed like everyone
else around me was doing something similar."
broke her cycle when she realized she had a spending
problem and made a conscious decision to reign in her
DONíT HAVE A FINANCIAL PLAN
20 percent of adults have developed a written financial
plan, according to Northwestern Mutualís 2015 Planning
and Progress Study. Brian Brandow was among those
without a plan for his money. As a result, he was living
paycheck to paycheck.
finally had a rock bottom moment and had accumulated
$109,000 worth of debt," Brandow said. So he and
his family built a budget and created a plan to pay off
their debt. They are now debt free, and he blogs about
being responsible with money at DebtDiscipline.com.
you donít have a plan for your money, one use of it is
as good as any other. Without a plan, you invite
reckless spending in your life and create new hurdles
for getting ahead financially. Learn how to create a
spending plan so you can align your expenses with your
DONíT HAVE A FINANCIAL CUSHION FOR EMERGENCIES
than 60 percent of Americans have less than $1,000 in
savings, according to a recent GOBankingRates survey.
This survey suggests that the majority of people likely
donít have enough set aside to cover unexpected
expenses or emergencies ó which could deal a major
financial blow to anyone living paycheck to paycheck.
should create an emergency fund to help you avoid living
paycheck to paycheck when unexpected expenses arise,
said Bethy Hardeman, chief consumer advocate at Credit
Karma. You can find extra money in your budget to set
aside by looking for expenses you can cut, such as
subscription services or a gym membership youíre not
using, she said. Also, look for fees you can eliminate,
such as bank account charges you can avoid by switching
to a financial institution with no-fee checking.
can also come up with extra cash in your budget by
negotiating lower rates with your service providers,
said Nicole Lapin, a financial expert and author.
"Do a yearly housekeeping call to all of your major
bill generators ó your cable, phone and internet
companies ó and see if there might be a better deal
available," she said.