You have a job, maybe even a good one, but you live paycheck to paycheck and have nothing in savings. How did that happen?
you don’t set goals
You won’t get anywhere unless you set goals. This goes for your career, your life, and of course your money.
Set a goal to have x saved in 12 months, y saved in 5 years, and z saved in 10 years. Sure, life throws us a curveball from time to time, but you need to know what you should have saved at each stage of your life, even if you have to catch up every once in a while.
If you’re 25, you should aim to be worth $1 million by age 50, including your home. If you’re 40 and still have nothing, try starting by saving $500 a month (increasing $100 a month each year) to have $1 million worth by age 65.
You don’t have a budget, or you have a budget but you don’t stick to it
Budgets may sound boring, but believe me, it’s much more boring to have no money. Set a budget and stick to it. Your savings come first, then manage the rest, whatever it takes.
you waste money
Any money you waste is gone forever. Eliminate cigarettes, dinners out, drinks at the bar, brands… It is much more important to be on the right track financially. Invite your friends over for dinner instead of going to the latest expensive restaurant, open a cheap bottle of wine at home instead of drinking at wine bars, learn to cook instead of ordering takeout, buy cheaper things, have a 6 month Freeze spending, renegotiate your mortgage, talk to your bank about eliminating or lowering fees, finding free things to do on weekends instead of spending hundreds of dollars.
You don’t earn enough or you don’t work enough
Even if you’ve cut your expenses to the bare minimum, you may simply not be earning enough. Duplicate your work and try to get a promotion or two. Find something that pays better instead. Sometimes you have to move to get ahead. Make your CV look professional. Start a side gig to earn some extra cash. If you only work the bare minimum at your day job and then party after 5pm, you will never be financially secure.
you are in debt
If you have bank debt or just pay the minimum on your credit cards, you’re working for them, not for you. The only debt you should have is your mortgage. Make a plan to pay off everything else, starting with the most expensive debt in terms of interest rate, and set some target dates. Try adding all of your short-term debt to your mortgage and promise yourself it will never happen again.
you are in the wrong group
Your friends spend money like there is no tomorrow and you try to keep up. Maybe they are earning more than you, or maybe they also have debts that are dragging them down just like you. Don’t be afraid to say no to the latest idea on how to waste money. Find new friends by joining cheaper activities like book clubs, hiking groups, cooking classes, etc, etc. You’ll soon be walking in with a better crowd.
you live with the wrong person
Your partner is a spendthrift and you are too afraid to put your foot down after so many years. But why let a spender make the money decisions? Has no sense! Take the control. Close the joint account and cancel those joint credit cards. Okay, you didn’t fall in love with someone because of their spending habits, but come on! Are you going to work like a donkey for the rest of your life for nothing? Divorce is expensive, but many people say it saves them money in the long run, so don’t be afraid to make some responsible decisions and draw red lines.