Did you know that no matter how much money you make, no one is immune from living check to check? In fact, according to financial studies, almost half of the adults in the US with six-figure salaries are living paycheck to paycheck. You never know what unexpected expenses could come your way and affect your bank accounts.
Personal finance expert Anthony O’Neal stops by the Get Up! Church to give us some tips on how to control your finances and end living check to check.
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ERICA: According to reports, almost half of the adults in the US with six-figure salaries are living paycheck to paycheck. How is this possible?
O’Neal: Man, you know, here’s the first thing is they’re not really getting down to really understanding the importance of money and the importance of understanding where your money is going. So, a lot of people think if I have more money then I can do more things when really, if you don’t have a plan of vision for your money, then you can be making $1,000,000 and you’ll be living paycheck to paycheck. So, the very first thing we got to get an understanding and grasp on, OK, this is how much money. I have this is the vision I’m going towards and I gotta operate with inside that vision.
Tip #1: Get real with your budget
O’Neal: A budget is a vision for your money because inflation is very much a reality. But it’s important to assess our overall spending behaviors too. So things cost more right now, so your budget should reflect just that. The cost of basic needs has gone up like in groceries. We can’t maintain the same spending habits for things we want when the cost of our needs changes. So my basic thing is to cut out unnecessary spending to accommodate your needs, right now. Things like eating out, traveling, and monthly subscriptions, these things aren’t must have. These are the ones. Let’s focus on things that we need until we can. Comfortably afforded things that we.
Tip #2: Fix your financial situation
O’Neal: I’m often telling people, “hey, cut expenses, cut expenses,” you know. Cut out subscriptions but. the truth of the fact is we only could do that to a. Certain point because money flows in and it flows out two ways, right? So, you’ve already cut out a lot of your expenses. You need to actually have more money coming in and sometimes changing jobs or getting an extra job, it’s not an option for some people, but here’s the thing. from a spiritual perspective, Erica, that I really land on is that everyone has gifts and talents, and I don’t think that we’re utilizing our gifts and our talents and so like this Wednesday for example, I’m going to be teaching people in a free master class on hey, how can you be a school teacher then come home and create a tutoring business online and make an extra thousand, $5000 a month. How can you be a content creator online that’s making an extra $5000 a month? So, if they want to learn how to do this? Bring you some extra income. Just go to anthonyoneal.com/savemyseat.
Tip #3: Don’t use debt
O’Neal: It’s tempting to add things to the credit card especially when living paycheck to paycheck. But think about it, why are you adding things to your credit card if you already can’t afford that item? So, let’s not stack that up. Let’s run away from debt. Let’s pay for cash as much as we possibly can and here’s the truth. If you can’t afford to pay for it in cash right now, don’t put it to your future. Just walk away from your present right now until you can afford it.
Tip #4 Save, save, save. Do not dip into your retirement funds
O’Neal: Because of inflation, many Americans have already dwindled into their statement account and a lack of savings and mounting debt has led to people dipping into their retirement funds and this is not a good strategy. You’ll get hit with taxes and fees. Not to mention you’re stealing from your future to pay for your present. So, the order of these steps matters. You know, we talked about cutting expenses and fixing your income and then you’re usually going to be focusing on paying off your debt right now. Once you pay off your debt, all that money is free to prioritize saving your money. And I want you to set aside at least three or six months of expenses into an emergency fund, right? And here’s a good bank that I want people to check out because they’re giving you 4.25% on interest and there’s bankpurely.com. An amazing bank where I parked my savings account and literally just last month with my emergency fund. They paid me $100 for money just sitting there, so there are some ways where we can save and be rewarded for saving at the same time.