5 Ways to Stop Living Paycheck to Paycheck

Posted on April 28, 2007

So many of us fall into this trap. As our income level rises we quickly raise our standard of living. I know in my brief financial career I have caught myself doing this. When I first got a steady paycheck ten years ago or so I went out and bought a car slightly beyond my means. I could afford it, but I was tight. It was a sports car, and I definitely could have purchased something more affordable. Anyhow my point was to give a few ideas to begin to get out of this situation:

Do you get an income tax refund each year? If so, visit your company’s HR and adjust it to reflect more accurately the taxes you’ll actually owe this year. You should get very little back at the end of the year.
Price out auto and homeowner’s insurance policies to see about lower rates elsewhere. Then if you get a lower rate ask your present company to match or beat it.
Downsize your automobile. I think this is the major problem for 20-something professionals. They get the good, stable job and the first reward, even before a house, is an awesome new car. I want an Acura TL or BMW 3 series as much as the next guy, but it can wait.
Increase your income. If your current job is not paying you want you should get then make changes. Set up Careerbuilder and Monster to send you daily job listings. Get your resume out there. Update your LinkedIn account and network.
Have a talk with your credit card companies. They will negotiate. Simply put immediately call them and attempt to lower the rate, especially if you have a large balance and are only making the minimum payment.