Armchair Millionaire Community Bulletin: Get Out of the Paycheck-to-Paycheck Rut

Strapped and struggling? It doesn’t have to be that way. Take the concrete steps that will get you out of the paycheck-to-paycheck rut and on the road to financial security.

New York, New York (PRWEB) December 6, 2005 -- According to the Commerce Department, the personal savings rate of Americans is in negative territory, at 0.4 percent as of September 2005.

This should make it of little surprise that many Americans are living paycheck to paycheck. In a survey conducted by A.C. Nielsen this summer, 28 percent of respondents reported having no spare cash. In other words, once they’ve paid for essential living expenses, there’s just no more money. And of those who do have spare cash, their first priority for that money is paying off debt. Plain and simple, we’re living beyond our means.

But it doesn’t have to be this way, as two recent stories from the Armchair Millionaire community attest:

“I don't live paycheck to paycheck because I live within my means. I have a nice home and a decent vehicle

--I don't need to buy new every year or two to impress anyone. I look for deals--I don't buy on impulse and I don't buy things I don't need.” --Milo

“I used to live paycheck to paycheck. It took about eight years to change bad spending habits and pay back mistakes, but now we live way below our means, save automatically and enjoy the rest.” --YJ

If you’re one of the millions of Americans who does live paycheck to paycheck, take heart: You can get out of the rut. My checklist will show the way.

The Armchair Millionaire’s Checklist for Getting Out of the Paycheck-to-Paycheck Rut

Think different. Yes, it may seem like everyone around you has plenty of cash and is buying the latest consumer goodies. First, don’t believe the part about them having plenty of cash--chances are, like you, they are struggling from one month to the next. Second, just because everyone else is spending like there’s no tomorrow doesn’t mean that you have to join in. Instead of being a compulsive spender, you could become a compulsive saver.

Build a budget. No one likes budgets, but they’re one of the most effective tools you have for getting out of the rut. Only when you have a realistic idea of where your money is going will you be able to make wise spending choices. You’ll make your budgeting a bit less painful by leveraging technology--the popular personal finance software packages all include budgeting tools.

Go for the low-hanging fruit first. Sure, you’ll save a few bucks by skipping that $3 latte. But go for the big-time changes that will really make a difference. Slash your interest costs by consolidating your high-interest credit card debt. Buy used cars, not new, and drive them longer. And when you buy your next home, don’t get the biggest mortgage you qualify for.

Rein in the rest. Think about how much you spend every month on cable TV, subscription radio, cell phones and the like. Not so long ago, these things were considered luxuries, and truth be told, you probably don’t need them.

Remember that you’re in control. For most people, living paycheck to paycheck isn’t about how little they earn but about how much they spend. Don’t set yourself up to need every single nickel you earn. Deliberately make the spending choices every day that will leave you with a cushion at the end of every month.

THE BOTTOM LINE: Strapped and struggling? It doesn’t have to be that way. Take the concrete steps that will get you out of the paycheck-to-paycheck rut and on the road to financial security.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Mutual funds: Love ‘em or hate ‘em? Log on to www.armchairmillionaire.com and let us know.

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Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at www.armchairmillionaire.com.

CONTACT INFORMATION:

Lewis Schiff

Armchair Millionaire

877-833-2823

http://www.armchairmillionaire.com

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