Different studies have shown that between half and two thirds of people live from salary to salary. That is quite an alarming statistic! This can be explained in part by the performance of the current economy, our own attitudes about money, and our failure to adapt to a changing world.

change your attitude

The place to start is with your mindset. Regarding the paycheck to paycheck life, you may well think that “that’s the way it is” or “everyone does it”, both of which are false. Maintaining these attitudes will ensure that your situation will never improve.

Take some time to think about what led you to your current situation. In a Celebrating Financial Freedom article titled “4 Steps to Escape the Paycheck to Paycheck Life for Good,” the author identifies the following mental and behavioral impairments detrimental to financial health.

• You’ve come to the conclusion that debt is just a part of life: Contrary to what some may think, you don’t have to be in debt to survive in today’s world. You must decide to make paying your liabilities your number one priority!

• Luxuries have become necessities: Certain luxuries, such as cable TV, an expensive car, and going out to eat, have often turned from extras into necessities. These extras will bleed your budget.

• You’re not earning enough: You may be underemployed and doing little to maximize your employment situation.

• You’re spending too much: You could also be spending more than you earn, a common trap for some people. This needs to be controlled.

• You have no plan: You basically spend your money until it’s gone with no idea where it’s going. You really need a plan.

• Money is so easy to spend – Those credit cards feel so easy to swipe and sign — it doesn’t feel like cash. However, it is, and then comes the interest.

• You have a problem with spending: You have no self-control when it comes to spending, and you may even be a shopaholic.

• The labor market has changed: indeed, the labor market has changed and continues to change. You must learn to deal with those changes. On this topic, the author recommends a book by Dan Miller titled “48 Days for the Work You Love: Preparing for the New Normal.”

With a greater awareness of how you got to where you are, are you ready to begin your journey to financial health? Here are some specific steps to take along with some helpful links.

Get out of debt

You must realize that debt is a choice. Interest and fees depleted the money you’ve earned. Eliminating your debt is the best place to start to reverse your situation.

Here are some areas where you can save money.

1) Food: Reduce the number of times you eat at restaurants. Pick up some healthy ingredients at a market and prepare your lunch. This can result in significant savings for you. More food saving tips for you. Use coupons.

2) Car: Another category of expensive expenses. If you can, download your car payment. Maybe even trade it in for a used car. Other ways to reduce care expenses include changing your oil less frequently, signing up with an Auto Club for roadside assistance, researching repair costs, and delaying your car trade-in. Consider carpooling to get to work. Evaluate your auto insurance needs. If you have an old car that is paid off, consider forgoing comprehensive and collision insurance. Keep a clean driving record and be aware of discounts for low mileage, combining multiple lines with other types of insurance, and group auto insurance plans from employers, professionals, alumni, and other groups.

3) Entertainment – ​​Consider ditching your cable TV for Netflix or Hulu. Here are some fun things to do for free. Go to the library for books and DVDs. Take advantage of free music and museums.

4) Clothes – You don’t need fancy clothes if you are in debt, Shop on sales, go to thrift stores and discount racks, buy second hand, order clothes as gifts, take care of the clothes you have and sell the clothes you no longer wear.

5) Eliminate credit card debt: Start by calling your credit card companies to see if they lower your interest rate. The average interest rate for credit cards is around 15 percent, but some can go as high as 30 percent. A study was conducted in 2002 that found that half of the participants who requested a lower interest rate received one. Consider transferring that debt to a lower interest account or obtaining a loan to consolidate your debt. If these options aren’t feasible, prioritize your debts to pay off the ones with the highest interest rates first.

6) Medical Debt: You can start by offering to pay cash, if you have it, while you are still in the hospital or doctor’s office. This can save you 5, 10, or 25 percent up front. If you end up paying more than the total bill, you’ll get a refund. If it is less, you will be responsible for the rest. When you get a bill in the mail: The part of your bill that says you “may (should not) owe” can be negotiated. Compare what the bill says your insurance didn’t cover with what your insurer’s policy says it does. If there is a discrepancy, call the doctor’s office to have it fixed. Your provider may also put your bill on hold for 30 to 60 days to prevent it from going to a collection agency. Notify your provider of any secondary insurance you may have. If you already have medical debt, ask about any partial forgiveness programs or request a 0 percent interest payment plan. Sometimes you can get a payment plan for a year or more.

7) Student Loans – There is a Public Service Loan Forgiveness Program that can allow those in the military, teachers, non-profit organizations, or public service jobs to get full loan forgiveness. There are other programs, like Pay Based on Income, that will allow you to pay less than your regular pay if you don’t earn enough income. If you want to pay off your balance faster, start making biweekly payments.

8) Mortgage and IRS Debt: Reduce your mortgage debt with bi-weekly payments. For IRS debt, try to arrange an installment plan with them.

In an article titled “The #1 Way to Stop Living Paycheck to Paycheck” by Alex Thomas Sadler, he offers three useful apps for getting out of debt. They are Pay Off Debt, Ready For Zero, and DebtTracker Pro.

Increase your income

Even with reducing your expenses as much as possible, you still may not be able to cover everything. Now you need to change your focus to earn more money. Think about improving your current situation and income at your current job, getting a part-time job or a side job, or some combination of these. Take a few job related classes and possibly get a certificate to increase your income. Your work will often fund your tuition and books. Some other ideas for you: You can do freelance work (and that doesn’t include just writing), become a virtual assistant, bookkeeping, design, and more. You might enjoy tutoring on a subject you enjoy. Sell ​​items you don’t need on eBay and Craigslist. Some more ideas to earn money for you.

Prepare and stick to a monthly budget

By preparing a monthly budget, you can keep track of where money is coming in and going out. Start by looking at your expenses from the previous month for necessary items like your mortgage or rent, car insurance, groceries, gas, etc. Then calculate how much you want to spend each month. Post that number somewhere, pay cash whenever you can, and even consider starting automatic deposits from your paycheck that will go directly toward reducing your debt. Do this so you are not tempted to buy unnecessary luxury items.

The following is a link to more valuable budgeting articles: http://www.cfinancialfreedom.com/budgeting-budget-excuses-overcome/

Here are five apps that can help you create a budget and track your spending/savings goals.

• Level Money tracks your spending and gives you an idea of ​​how you’re doing. It’s free and will probably work best for those who have relatively simple and linear financial lives.

• Mint is a very popular app that helps you create a budget and then track your spending, monitor your credit score, and keep up with potential fraud by automatically downloading transactions from bank, credit card, and investment accounts. The service allows you to combine all your finances in one place, giving you a constant overview of your financial status. You can also set up alerts and automatic bill payment.

• Budget Boss is a highly visual app that uses graphs and charts to keep track of your budget and goals. It also calculates your future account balances, based on your current spending habits.

• HomeBudget (iPhone only) is an application that allows you to manage account balances, budgets, and bills. You can set up credit and debit accounts and keep track of balances, and it syncs data with other iPhone users and can export it to a desktop computer. Users can take a photo of the receipt and associate it with a “family sync” feature that allows household members to exchange information and work together within a single budget.

• Wally is a tool that shows you what is coming in, what is going out, what you have saved and what you have budgeted for. Wally helps you gain a better understanding of exactly where your money is going, and then helps you set, as well as track and achieve, various financial goals.

Make a plan

In addition to budgeting, come up with a more macro-level plan for how you can stop living paycheck to paycheck. Find out what their top priorities are for their short- and long-term future. These may include buying a home or car, taking a big vacation, building an emergency savings fund, or saving for retirement. Remember that paying down debt will improve your credit score for those larger purchases. Stop wasting money on the little things you don’t need so you can buy the bigger things you need later. Make your goals realistic so you don’t get discouraged. Spend time with similar people, people with a prudent and responsible mindset; spendthrifts can put you off. Finally, celebrate your successes in eliminating your debt!