Have you noticed how people frequently define their financial success by the type of car they drive or by the size of their homes? Don’t get me wrong. Having nice things is not bad, but true financial success is found in achieving financial peace of mind.
Financial peace of mind is that secure feeling, knowing you don’t have to worry about meeting day-to-day expenses, that your bills will be paid on time, and that you’re making steady progress toward achieving your financial goals. It’s knowing that you can easily cover the unexpected financial emergencies life will throw your way.
True financial success is found in achieving financial peace of mind.
Unfortunately, too few of us can enjoy this luxury of financial peace. According to a 2016 Northwestern Mutual study, 85% percent of Americans report feeling anxious when it comes to their finances, with a whopping 28% of Americans worrying about their finances every day.
So how do you stop living paycheck to paycheck and begin bringing financial serenity into your life?
1. Change it up
The definition of insanity is doing the same thing over and over but expecting different results. You can’t continue to do what you’ve always done and expect things to turn out differently. You can’t continue with your current habits, but expect your financial life to turn around. If you’re tired of living paycheck to paycheck, do something about it. Change your behavior and your actions.
2. Spend with purpose
Understand where every single dime of your money is going. Until you track and know exactly how you spend your income, you’ll never escape the paycheck to paycheck trap. Trim aggressively where you can by eliminating all the dead financial weight in your life.
3. Build your own financial life line
Peace of mind begins with knowing that you can withstand the unexpected financial storms that come your way. Unfortunately, according to a survey by the Federal Reserve Board, only 47% of Americans have enough money on hand to cover an unexpected $400 expense.
Once you understand where you spend your money and eliminate unnecessary expenses, your next financial task is to build an emergency fund. This may mean foregoing life’s little luxuries for a while or eating more meals at home. But, the peace that comes with having an emergency fund in place is well worth the small sacrifices you’ll be forced to endure.
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4. Make a commitment to pay down debt
High interest debt is a cancer decimating your finances. Think about it. Interest is money you’re literally throwing out the window. Make a commitment to pay off your debt. Start by paying the minimums on all but one of your debts. Throw all your extra income at paying down this one debt. When this debt is paid, move on and begin throwing all your resources at the next debt. Rinse and repeat. It may take a while but slow and steady wins the race.
5. Earn more
Earning additional income is one of the surest ways to escape the paycheck to paycheck quagmire. Take a close look at your current situation. Could you earn more? Ramp up that side hustle of yours. Learn a new skill or earn new certifications that will allow you to demand a higher salary. Consider searching for a better paying job.
The feeling of financial security is priceless and it’s one of the best gifts you’ll ever give yourself. Remember, if you want something different you have to do something different. Take control of your situation and obtain the financial peace you deserve.
BMWK, what have you done to secure financial peace of mind? If you’re tired of living paycheck to paycheck, let us know in the comments below.