The sad reality is that most of the people in our nation tend to live paycheck to paycheck. If there is some money left in their account, they just can't wait to spend it. It's like they have a hole in their pocket. This situation often helps to fuel our consumer-driven economy but also does severe damage in other areas.
Why Are People Living Paycheck To Paycheck?
They are not living paycheck to paycheck as they earn less; many people who earn significantly good amount even prefer to spend their entire paycheck. If you don't stay in your financial lane and plan ahead, this will be you as well.
Most people love to spend; you can say, no point in making money if you don't spend it. You are working hard to get whatever you want. There is no point to work hard and live a cheapskate's life. Yes, you have a point; money is for spending, but I have a point too; there should be a balance in it.
What Does It Mean To Live Paycheck To Paycheck?
It means your financial life is not balanced if you are making a good money and still living paycheck to paycheck. After working hard and earning a fat paycheck, your spending is more than earning and your saving score is "zero".
How Does Living Paycheck To Paycheck Impact Finances?
Living an extravagant financial life can force you to live an unsecured financial life. Not saving money and spending the entire paycheck can also force you to work more and no savings for your financial future. Having no added money in the bank account can drive you to fall into debt. Most of the time, people who don't have saving cushion fall into debt to combat with an unexpected emergency. They either take out a costly loan with higher interest or use their credit cards to meet the expenses that come their way uncertainly. This kind of expensive debt cost them dearly and they just fail to achieve their other financial milestones. The benefit of living a frugal lifestyle: A frugal person is always a winner A frugal lifestyle is always a winner in achieving a secure financial life. A person who leads a frugal lifestyle have a better financial life. A frugal person has better savings than a person who lives an extravagant lifestyle.
How Do I Live A Frugal Life?
A frugal person always prefers to keep an emergency fund to avoid accumulated unexpected debts in life. On the other hand, a spendthrift person doesn't value an emergency fund and depends on the credit cards to meet any kind of financial need. A frugal person spends money mindfully; he/she follows a budget and tries to stick with it . Thus, the person can successfully set aside a certain amount each month to build a saving cushion. A reckless spender hates to follow a budget and always ends up with no money at the end of the month. This kind of person loves to live paycheck to paycheck and is not able to save money. A frugal person always makes monthly payments on all the bills including mortgage payments, debt payments (if any).
A spendthrift person either forgets to make the monthly payments or pays the bills using the credit cards. Sometimes, this kind of person takes out a payday loan to pay off the debts and bills. A person, who is inspired by frugalism, knows the importance of a retirement fund. Frugal persons don't like to carry debt to their retirement. They start saving money for retirement as soon as they start earning. They know the earlier they start saving for retirement, the earlier they can achieve a secure financial future. But, spendthrift persons always love to spend their entire earnings; they only depend on their Social Security fund for their retirement expenses.
Break the myths of frugality and become a champion. Well, whether or not you will adopt frugal life is your choice. But, I will love to tell you the truth of following a frugal lifestyle. Because most of the people believe in some myths and prefer not to follow a frugal lifestyle, like that preached by Frugal Fitness.
Some people believe that living a frugal lifestyle means living a cheapskate's lifestyle, which is a wrong way of thinking. Living a frugal lifestyle means spending money more meaningfully instead of saving money by buying a cheap item. Adopting frugal lifestyle doesn't mean depriving yourself. Frugal people enjoy a happy and fulfilled life by making more of their money. They spend on an item that is a worth of their money. They enjoy and reward themselves in a more meaningful way instead of losing their hard-earned money on useless items meaninglessly. Living a frugal life means to appreciate all the things you have in your life. A spendthrift person always craves for new things that are pricey instead of taking care of their existing possessions. Frugal people value their possessions and avoid wasting money on showing off their lifestyle to others. They prefer to put the money towards something more important like debt payments, investment, retirement savings, making extra mortgage payments, saving money to buy an important thing, saving money for a trip, etc.
Lastly, I would like to say that by living a frugal lifestyle, people can get a happy and secured financial life. People who are in painful debts can pay them off by following a frugal lifestyle. They can start a fresh financial life and can get a grip on it. People who are already managing their financial life responsively can achieve all the financial goals by adopting a frugal lifestyle. They can soon win a secured financial future and can become financially independent early.
Amy Nickson, a passionate writer on finance, is a professional blogger whom has started her own blog Working Moms Word. Connect with her on Facebook & Twitter.
I hope you enjoyed this article about the art of frugal living and how it can improve your financial situation.
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