3161: How do You Start Saving Money Living Payday to Payday by Misty with Women Who Money

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[00:00:36] Living Daily.

[00:00:38] This is Optimal Living Daily, episode 31-61.

[00:00:42] How do you start saving money living payday to payday?

[00:00:46] By Misty with womenwhomoney.com and I'm Justin Malik.

[00:00:49] This is the show where I usually read to you kind of like an audiobook but on Sundays

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[00:01:15] your life.

[00:01:21] How do you start saving money living payday to payday?

[00:01:24] By Misty with womenwhomoney.com

[00:01:28] Do you ever feel defeated when it comes to saving money?

[00:01:31] You want to save but you find yourself waiting for the next payday so you can cover monthly

[00:01:36] expenses.

[00:01:37] Are you tired of living paycheck to paycheck?

[00:01:40] The Paycheck Spending Cycle

[00:01:43] According to a survey from Career Builder, 8 out of 10 American workers say they live

[00:01:48] paycheck to paycheck.

[00:01:50] A constant cycle of never getting ahead with savings.

[00:01:53] When you do start to save some money and see progress with your savings, the car needs

[00:01:58] new tires.

[00:01:59] What if you had enough money and savings to buy new tires and still have enough left

[00:02:03] to cover other expenses that pop up?

[00:02:06] Having money built up for emergencies means less stress, less worry and more peace

[00:02:11] of mind.

[00:02:12] It means having enough money to survive and thrive past Friday and ending the

[00:02:17] paycheck to paycheck cycle.

[00:02:20] Stop the cycle.

[00:02:22] Many of us can relate to the feeling of where do I start when it comes to saving money, wondering

[00:02:27] how do I save if there's nothing left to save?

[00:02:30] It creates major stress because the debt continues to grow while savings do not.

[00:02:35] Below are six changes you can make to control your finances and save more money.

[00:02:39] A few small changes in your financial habits can make huge impacts on your savings.

[00:02:45] Taking Control of Your Finances

[00:02:46] 1.

[00:02:48] Tracking Expenses

[00:02:50] Just get caught up in the cycle of living paycheck to paycheck because of not paying

[00:02:54] attention to where our money is going and then it's gone.

[00:02:58] Sometimes you may even take on more debt like credit cards to manage the monthly

[00:03:02] expenses.

[00:03:03] To stop the cycle of paycheck to paycheck living and eliminate your credit card debt,

[00:03:08] you need to figure out where your money is going.

[00:03:10] Your best bet is to track expenses.

[00:03:13] For one month, make a list of where you spend your money and how much you spend.

[00:03:17] This can be as simple as just keeping a list on a piece of paper.

[00:03:20] You could also put all the bills and receipts in one place until the end of the month and

[00:03:24] then make your list.

[00:03:26] It's amazing how much you learn about your spending habits once you start tracking

[00:03:30] expenses.

[00:03:31] This step is critical to start on the path to saving money when you live paycheck

[00:03:36] to paycheck.

[00:03:37] 2.

[00:03:38] Create a Budget

[00:03:40] Once you see where your money is going, you'll start finding ways to keep more

[00:03:43] of it by creating a budget.

[00:03:45] A budget does not limit your spending, it just guides it.

[00:03:49] You'll begin to see what items can be cut or reduced such as dining out.

[00:03:53] You can take a look at your bills and see if you can change to a smaller cable

[00:03:57] package or cell phone plan.

[00:03:59] A budget puts you in control of your finances.

[00:04:02] It lets you determine how much is coming in and decide where it's going out.

[00:04:06] Then a budget gives every dollar a place at a purpose, starting with your savings.

[00:04:11] 3.

[00:04:12] Prioritize saving

[00:04:14] Save first, then spend.

[00:04:16] Make it your mission.

[00:04:18] Usually savings comes from what's ever left over, if anything, at the end of each month.

[00:04:23] This needs to be just the opposite.

[00:04:25] Before you pay the first bill, pay yourself first, even if it's a small amount at

[00:04:29] first.

[00:04:30] Make a savings deposit before paying everyone else.

[00:04:33] When the focus is on savings and you prioritize saving, it improves over time

[00:04:38] and becomes a habit.

[00:04:39] These small savings add up over time and grow into healthy savings started by paying

[00:04:44] yourself first.

[00:04:46] 4.

[00:04:47] Start small and set a short term goal

[00:04:50] When it comes to your initial savings goal, set a short term one such as $100.

[00:04:55] You could possibly achieve that goal in a few weeks and gain some momentum.

[00:05:00] You'll need to set aside a specific amount each week to achieve your goal.

[00:05:04] Where will you find this money?

[00:05:06] By tracking your expenses.

[00:05:08] You'll find areas where you can spend less and save instead.

[00:05:11] You could make a simple money savings goal thermometer for motivation or create a vision

[00:05:15] board.

[00:05:16] At the least, writing down your savings goal and putting it in a place where you will

[00:05:20] see it every day is a great strategy to help reach your goal.

[00:05:24] 5.

[00:05:25] Develop a money saving mindset

[00:05:28] If you tell yourself it can't be done, then you feel defeated before even trying

[00:05:31] to save more money.

[00:05:33] Your money mindset is critical to stop living paycheck to paycheck and to meeting

[00:05:37] your savings goals.

[00:05:39] Whatever we think finds a way of turning into our actions.

[00:05:42] When you think positive thoughts about saving money, that will turn into taking steps in

[00:05:46] the right direction.

[00:05:48] Change is hard but these kinds of changes are going to impact more than your finances.

[00:05:53] Having savings to help in case of an emergency helps reduce stress.

[00:05:57] Having savings that continue to grow as you set and achieve your new goals creates

[00:06:01] peace of mind.

[00:06:03] Automate your savings

[00:06:06] Automation is a powerful tool that can transform your finances by growing your savings on autopilot.

[00:06:11] Most employers as well as banks or credit unions offer options when it comes to setting

[00:06:15] up a direct deposit to automate your savings.

[00:06:19] Take advantage of these options to save money, save time and set your savings on autopilot.

[00:06:25] Automation is one of the best ways to watch your savings grow and scale.

[00:06:29] First, for your emergency fund and next for several months worth of living expenses.

[00:06:34] Setting up automation for bills also helps your savings by avoiding late fees.

[00:06:38] Credit cards depend on our mistakes to make money and automating reduces that risk of mistake.

[00:06:44] Break the living paycheck to paycheck cycle and start saving money now.

[00:06:49] These changes will help break the cycle of living paycheck to paycheck and instead

[00:06:53] give you more control over your finances.

[00:07:00] You just listened to the post titled How Do You Start Saving Money, Living Payday

[00:07:04] to Payday by Misty with womenwhomoney.com

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[00:08:17] Getting out of the paycheck to paycheck slog is such an empowering step on anyone's

[00:08:22] financial journey.

[00:08:23] And I totally agree with Misty here.

[00:08:25] The first step is increasing your awareness around where your money is going now.

[00:08:31] The idea of tracking expenses might make you cringe, but it was game changing for me and

[00:08:36] I continue to do it to this day.

[00:08:39] The reason why it's so powerful is because you need to come up with a plan for how

[00:08:43] you're going to increase the gap between your income and expenses if you're ever

[00:08:47] going to break free from living paycheck to paycheck.

[00:08:51] And you can't come up with a plan if you don't have a sense of where you

[00:08:54] stand right now.

[00:08:55] Once you have a clear picture on where you're at now, you get to play the game of optimizing

[00:09:00] all your expenses.

[00:09:02] Where can you cut costs?

[00:09:03] Where are you spending money and not getting enough value from that spending?

[00:09:06] Well, of course I think we should all prioritize saving and pay ourselves first.

[00:09:12] You can only do that when you live below your means.

[00:09:15] If you track every dollar and optimize all of your expenses and there is still

[00:09:20] no gap that would allow for savings,

[00:09:22] you likely need to focus more of your efforts on increasing your income.

[00:09:27] Pay yourself first sounds great, but it's not really practical to save money if that

[00:09:32] forces you to have no money for groceries.

[00:09:35] I know it can be scary to take a deep dive into your finances and look closely

[00:09:39] at where your money is going.

[00:09:41] I have been there my friend, but I would encourage you to let your curiosity

[00:09:46] be bigger than your fear or shame about this because you absolutely can put an

[00:09:51] end to the paycheck-to-paycheck cycle.

[00:09:53] And it all starts with the willingness to take a look at the numbers with a can-do attitude.

[00:09:59] And that's a wrap for the Sunday show.

[00:10:01] Have a great rest of your day and I'll be back tomorrow for Minimalist Monday,

[00:10:05] where your optimal life awaits.