When you don’t have to live paycheck-to-paycheck, and yet cannot seem to stop struggling at the end of the month, the only culprit involved is you. Specifically, it is your spending habits and penchant to live beyond your means that is hurting you in more ways than one. If you do not put your money towards the future, you will always struggle. You won’t be able to dig yourself out of the pit and start to see a bright future that includes a retirement you can actually afford. Stop struggling, stop the stress, and instead follow these five steps to get your life together financially.

Understand Where Your Money Is Going

Before you can do anything more with your money, you need to understand where it is currently going. High food costs can seem unavoidable, for example, until you carefully look at what you buy and realize most of the expenses are towards ready-meals and eating out.

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Separate Fixed from Variable Expenses

Once you have a comprehensive list of where your money is going, you can then start to make sense of your personal budget. Separate fixed expenses (your rent or mortgage payment, for example) from variable expenses (like food). Once you have done this, you can work out your exact budget, and then proceed to reduce your living costs so that you can live within what you actually have every month.

Reduce Your Living Costs

Making lunch at home and bringing in to the office will save you a lot of money. Taking public transport instead of wasting gasoline stuck in traffic will save you a lot of money. Looking at cheaper alternatives for how you live today, and slowly reducing what you buy can help you easily live within your means and have money to save.

Start Saving an Emergency Fund

Before you worry about big savings strategies, start first with an emergency savings fund. There is an incredibly high number of people who do not have more than one month’s paycheck in savings, meaning they won’t be able to afford an unexpected emergency and will end up in debt afterward. Save up enough to weather any storm, and you can then finally live without financial worry and can start thinking about your future.

Be Serious About Your Retirement

Everyone should ideally start their retirement savings as soon as they have a steady income. This plan should have a variety of different systems so that you can boost your pay out as much as possible. Relying solely on an employer pension plan, for example, is a mistake. It was created to supplement your retirement savings, not be your retirement savings. This means you will need to develop other plans. A good option is a LIRP, otherwise known as a life insurance retirement plan, which works as a retirement savings plan with the exception of unexpected death, where your beneficiaries will receive up to double what you have paid into it. Perfect for families and great for your retirement.

It can seem almost alien to plan for your retirement when you only just got your first job, but that is how you make your money go further. Afford these savings by creating a budget, living minimally, and of course, being committed to saving, and you will be amazed at how bright your future can be.  

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