How to Stop Living Paycheck to Paycheck

Living paycheck to paycheck: For many, this act of using most or all of your monthly income to cover your monthly expenses — with no money left over and none for savings — is a fact of life

Start saving now. It doesn't have to be a lot each month, but just getting started is a great first step. If you have the option, set up a direct deposit to a separate account. By paying yourself first, you eliminate the possible temptation to skip a deposit or two.

Pick the right place to save it. Keeping a certain amount of your savings easily accessible is a critical part of your emergency response. Investments and retirement accounts are a key piece of your overall savings plan, but they take time to liquidate and sometimes come with penalties. Look for demand deposit options like money market or traditional savings accounts that let you access your money whenever you need it.

Leave it alone. Your emergency savings should be set aside for just that: emergencies. If you are also saving to buy a car or make a down payment on a house, consider opening a separate account for those savings goals. This will ensure you have the money you need when you need it.

Protect your credit. While this isn't a savings tip, it is always a good idea to keep an eye on your credit score and do what you can to maintain it. Good credit can be a big help if your financial situation requires you borrow money or use credit cards to cover monthly expenses.

Though it may be impossible to protect yourself from unexpected financial emergencies, you can take steps to make sure you're better prepared. Look for opportunities to build and protect your savings, so you can remain in control of your financial future.

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