Tag: saving
3 Most Common Money Mistakes When You’re Living Paycheck To Paycheck

3 Most Common Money Mistakes When You’re Living Paycheck To Paycheck

By Cameron Huddleston, GOBankingRates.com (TNS)

Millions of Americans are living paycheck to paycheck. But while around one-third of Americans, or 38 million households, are living hand-to-mouth, they aren’t 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.

What 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 you’re living paycheck to paycheck, here are three common money mistakes you might be making.

YOU OVERSPEND

One 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.

A 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 didn’t 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.”

She broke her cycle when she realized she had a spending problem and made a conscious decision to reign in her spending.

YOU DON’T HAVE A FINANCIAL PLAN

Only 20 percent of adults have developed a written financial plan, according to Northwestern Mutual’s 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.

“We 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.

If you don’t 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 goals.

YOU DON’T HAVE A FINANCIAL CUSHION FOR EMERGENCIES

More 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 don’t have enough set aside to cover unexpected expenses or emergencies — which could deal a major financial blow to anyone living paycheck to paycheck.

You 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 you’re 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.

You 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 — your cable, phone and internet companies — and see if there might be a better deal available,” she said.

GOBankingRates.com () is a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.

© 2015 GOBankingRates.com, a ConsumerTrack web property. Distributed by Tribune Content Agency, LLC.

Photo: 401(K) 2012 via Flickr

 

Five Ways To Save On Labor Day Road Trips

Five Ways To Save On Labor Day Road Trips

By Caroline Hailey, GOBankingRates.com (TNS)

Many of us don’t want to admit it, but the end of summer is just around the corner. With the three-day Labor Day weekend coming up, now is the perfect time to plan a road trip and have one last great summer weekend.

Although air travel is expected to be very popular this year – more than 14 million people are expected to fly during the seven-day Labor Day travel period, according to Airlines for America – you might decide to travel by car instead. While it’s true that road trips can be much cheaper than flying, expenses can still add up if you aren’t careful with your money.

To ensure your road trip stays budget-friendly, follow these five road trip tips:

GET YOUR CAR CHECKED OUT FIRST

First thing’s first – you can’t have a road trip without a car. Get your car checked by a technician before embarking on any road trip. The tires should be checked to make sure they have the right air pressure. And if you’re almost due for an oil change, get it done before you leave. Check that all the lights are working properly and take an extra minute to clean dirt off the headlights to make it easier to drive at night. You would much rather find out about a problem while you can still fix it before your Labor Day trip.

FIND A GOOD GAS CREDIT CARD

Another great step to take before you hit the road is to get a credit card that specifically rewards you when you fill up on gas. Since gas is one of the main expenses for any road trip, having a card that gives you cash back or other rewards can be an easy way to save money.

AVOID TOLL BOOTHS

There are few things more annoying to pay than highway tolls, especially when they can cost $15 or more over the course of a one-way trip in some areas, according to CostToDrive.com. Your smartphone, GPS or even Google Maps can help you find ways to navigate around the tolls.

PACK YOUR OWN FOOD

Planning ahead when it comes to food can help you save a lot in the long run. Instead of stopping every few hours to eat at a restaurant, why not pack easy to eat items like muffins or cereal bars for breakfast? For lunch, fill a cooler with cold cuts and bring along nuts and granola bars. Not only will you be saving money by not eating out for breakfast and lunch, but you’ll also save time by not having to stop as frequently and wait for your food to be prepared.

FIND LOCAL DEALS

Being cheap while traveling doesn’t always mean you have to skip out on nice restaurants and pricier entertainment. There are many ways to find coupons for local attractions that are great for the summertime, such as boat rides, Segway tours and fancy restaurants. Browse sites like Groupon and Living Social a few days or weeks before you leave to see what deals are available in your planned vacation destination. Just pay attention to any expiration dates, rules and limitations.

Photo: Drivers can improve fuel economy by traveling at steady speeds, anticipating stops and making sure tires are properly inflated. (Photo courtesy Fotolia/TNS)