3558: Break the Paycheck-to-Paycheck Cycle and Start Saving by Vicki Cook and Amy Blacklock of Women Who Money

[00:00:00] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all-night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto-update throwing off your momentum.

[00:00:22] That's why Dell builds tech that adapts to the way you actually work. Built with long-lasting batteries so you're not scrambling for the closest outlet. And built-in intelligence that makes updates around your schedule, not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at dell.com slash dellpcs. Built for you.

[00:00:47] This is Optimal Finance Daily. Break the paycheck-to-paycheck cycle and start saving by Vicki Cook and Amy Blacklock of WomenWhoMoney.com

[00:01:03] You're not alone, but being part of this crowd isn't comforting. And it makes sense when you look at the statistics. Just a few years ago, about 60% of Americans reported having less than $1,000 in savings. And a full 20% admit that they had nothing saved at all.

[00:01:21] Let those numbers sink in. More than 3 out of 4 full-time workers admit to living paycheck-to-paycheck. Living this way is a frustrating reality for many women. This is a serious problem. But don't give up hope, even if you've lived this way your whole adult life. Here are 5 things you can do to break the paycheck-to-paycheck cycle and take control of your finances. Number 1. Total your debts.

[00:01:50] When you have to spend a significant portion of your paycheck paying off debts, it's tough to get ahead. The paycheck-to-paycheck cycle is even harder to break if you're deep in debt. But the cycle will never end if you don't face the numbers and understand just how much debt you have. To total your debt. Add up the balance on every credit card you have. Total any outstanding loans, like student loans, car loans, or lines of credit for furniture or appliances.

[00:02:20] And add in your mortgage if you own your home. Good debt is still debt. Number 2. Record your expenses. Mindless spending may be the reason you run out of money at the end of the month. While the occasional morning latte, lunch out, or toy for your child in the checkout line may not bust your budget, mindful spending decisions matter as you work to break the cycle.

[00:02:45] If you haven't carefully tracked how much money you're spending, you might be shocked to see the total at the end of the month. Use a spiral notebook or try out tools like Excel or Google Sheets. You can even use free apps to track where you're spending your money. Before you try to make any spending changes, record your spending for at least one month. When you know where your money's going, you can do something about it. Number 3. Make small changes.

[00:03:14] A recent MetLife study shows that almost half of the workforce reports feeling concerned, anxious, or fearful about their money situation. And you probably feel this way too. Taking small steps to clean up a money mess can be a real challenge. But starting small can lead to big results. After tracking your purchases for a month, you should be able to find a few places where you can cut back, even if it saves you just a few dollars a day.

[00:03:42] Maybe it's bringing your lunch to work or making coffee at home. Or it could be dropping takeout once a week. You might be surprised how quickly you could save $10 or $25 a week, maybe a lot more. That money can then be used to start building an emergency fund and paying off your debt. After you've made a few small changes, you can take on new areas you've identified as problems. Consider things like changing cell phone carriers and reducing or eliminating cable TV.

[00:04:12] Make a call to your service providers to ask if you're getting the best deal they can offer. You might be surprised at how quickly the price drops if they're worried you might cancel service. Keep track of what you're saving each month. Even though you may not be able to save a big part of your paycheck right away, remember that you're making progress. Number four, start now and stop living paycheck to paycheck. Just start. Don't wait for a new week or next month.

[00:04:41] And don't make taking control of your finances a resolution for next year. Take action now. Consider your tax refund or your next raise as a bonus to grow your emergency fund or to pay down big chunks of debt. Time is your friend. This is not a get-rich-quick scheme and there's no magic formula to follow. The more time your savings has to grow, the more quickly you can pay off your debts and build a cushion of money for emergencies.

[00:05:09] And number five, stay the course. It's incredibly frustrating to know that your paycheck will barely cover your regular expenses for the month. But keep in mind that almost everyone gets trapped in the paycheck-to-paycheck cycle at some point. So don't give up. Getting a clear picture of your financial situation will allow you to take control of it. But it'll take time and patience. If you stray off course, just start again and ask for help if you need it. You matter.

[00:05:39] Your future matters. Total your debts. Record your expenses. Make small changes. Get started now. And stay the course. You just listened to the post titled, Break the Paycheck-to-Paycheck Cycle and Start Saving. By Vicki Cook and Amy Blacklock of WomenWhoMoney.com. Summer's almost here. And honestly, I want to be planning a vacation. Not stressing about whether I can actually afford it.

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[00:07:02] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all-night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto-update throwing off your momentum. That's why Dell builds tech that adapts to the way you actually work.

[00:07:29] Built with long-lasting batteries so you're not scrambling for the closest outlet. And built-in intelligence that makes updates around your schedule, not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at dell.com slash dellpcs. Built for you.

[00:07:54] Getting out of the paycheck-to-paycheck slog is such an empowering step on anyone's financial journey. I think the first step is increasing your awareness around where your money's going now. The idea of tracking expenses might make you cringe, but it was game-changing for me when I decided to clean up my finances. The reason why it's so powerful is because you need to come up with a plan for how you're going to increase the gap between your income and expenses if you're ever going to break free from living paycheck-to-paycheck.

[00:08:24] And you can't come up with a plan if you don't have a sense of where you stand right now. Once you have a clear picture on where you're at now, you get to play the game of optimizing all your expenses. Where can you cut costs? Where are you spending money and not getting enough value from that spending? Well, of course, I think we should all prioritize saving and pay ourselves first. You can only do that when you live below your means. If you track every dollar and optimize all your expenses,

[00:08:53] and there's still no gap that would allow for savings, you likely need to focus more of your efforts on increasing your income. I know it can be scary to take a deep dive into your finances and look closely at where your money's going. I have been there. But I would encourage you to let your curiosity be bigger than your fear or shame about this, because you absolutely can put an end to the paycheck-to-paycheck cycle.

[00:09:19] And it all starts with a willingness to take a look at the numbers with a can-do attitude. That brings us to the end for today, though. Thanks so much for listening all the way through. And I'll catch you tomorrow on our next episode, where your optimal life awaits. Thanks. Thank you.