If you are struggling to make ends meet, you’re definitely not alone. The truth is, most working Americans live paycheck to paycheck. In 2016, CareerBuilder surveyed more than 3,200 full-time workers and learned that:
- 38% of workers “sometimes” live paycheck-to-paycheck.
- 23% “always” do so.
- 15% “usually” do so.
What’s more, the problem spans all salary levels – not just minimum wage.
This situation is very serious. Constantly wondering whether you’ll be able to pay your bills from one month to the next is enormously stressful. The stress can damage your health, your job, and your relationships. The situation can easily lead to accumulating debt that eventually proves to be in unmanageable, or failing to save for retirement.
If you have been living paycheck to paycheck, you know things need to change. But, having been stuck in survival mode for so long, you probably feel burned out, exhausted, and overwhelmed. You may feel trapped and helpless – as if simply hanging on is the best you can do. If this sounds like you, it’s time to pause, take a step back, and reset your feelings and expectations when it comes to dealing with your money. This fundamental shift within you is what will make other important changes possible.
- Dare to hope. It takes a leap of faith to imagine that a better financial situation for yourself and your family might be possible. Times are hard, you’ve been putting out fire after fire – it’s understandable that you may not feel like you have any courage or energy left. But hope is an essential ingredient to building a better financial picture. You don’t have to know how to get there; that can come later. For now, just allow for the possibility of making things work. This is how you break through the paralysis that fear, hopelessness, and exhaustion have built around you.
- Tune in. This is the hardest part for many of us. No more looking away; it’s time to really face your financial situation. Instead of avoiding the things that stress you out – credit cards debts, student loans, etc. – map them out and shine a bright light on them so there’s nowhere for the ugly facts to hide. Need help? A good financial planner can help you create a complete picture of your finances. You may be surprised to discover that things aren’t as bad as you imagine. Regardless, a map of your complete financial picture will give you the foundation you need to move forward.
- Make time. The change you want won’t happen overnight. It will take time and commitment. Set aside time to deal with your money on a regular basis, so you can deal thoughtfully with questions that come up and address problems before they become crises. Plan family meetings to talk about money related issues. The idea is that everyone should be on the same page and work together towards your family’s goals. If you choose to work with a financial adviser, you’ll need to meet regularly as well – as your circumstances change, your adviser will be able to guide you and help you course-correct as needed. Another thing: if dealing with money has been anxiety-provoking for you in the past, creating a schedule to handle money questions regularly can defuse the intimidation factor. Eventually it will just be another part of your routine.
- Re-envision your future. It’s time to get real. For most of us, “retirement” won’t involve a private jet and sipping cocktails while sitting back in an Adirondack chair. And that’s fine. Your retirement needs are probably simpler than we are often led to think. Chances are, you need a place to live, plus enough money to meet your living expenses. Be realistic about your needs and honest about the resources you have to work with, including unconventional sources income in retirement. Once you’re free of false and cliche ideas about retirement, you’ll find that you have more options than you imagined for securing your own future. Let that knowledge empower you to act.
- Find your next steps. It’s a misconception that you have to have all the answers or become a financial expert before you can improve your financial situation. The truth is, at any given moment, all you need to know is what to do next. A good financial planner can help you identify the most important next steps for you to take. Just focus on those, and you’ll find it surprisingly easy to move forward. You’ll feel better immediately – and the momentum of completing one set of next steps will propel you towards the next.