In January of 2019, statistics were published by numerous news outlets suggesting that fully 78% of U.S. workers are living “paycheck to paycheck.” For those who may be unclear, this means that these workers’ expenses exhaust their incomes nearly every pay period.

A person who is living paycheck to paycheck is one who literally must receive each new paycheck simply in order to pay his or her costs of living.

Two Consequences of Being Paycheck to Paycheck

Firstly, if you’re living paycheck to paycheck, then it’s difficult to find the budget to purchase things such as life-insurance coverage.

But, secondly, if you and your family depend on a consistent paycheck just to meet basic living expenses, then what happens if the breadwinner dies or becomes disabled?

There’s a tremendous pressure, then.

The very families that desperately need life-insurance protections for their families are often the families that cannot afford the coverage.

Living this way is unsustainable in the long run. It’s a disaster in the making.

How Can You Avoid Tragedy?

If your expense-to-income ratios are unfavorable, you have only four basic options.

(1) Do Nothing

Obviously, this option will leave you and your family in the same precarious situation you’re already in. In this position, it’s not a matter of if the bottom will fall out from underneath you; it’s simply a matter of when it will happen.

(2) Increase Income

Indeed, this is a possibility in “logical space,” as it were — meaning, it is at least an abstract possibility. But, it can be extremely difficult to implement in practice. Maybe your industry is saturated or on the decline.

And perhaps you’re faced with the prospect of having to spend money just to get ahead. This might be because you need to relocate to find work, or because you require higher levels of education or training.

(There are numerous “side hustles” and other ways that you could try to make a few extra bucks if you find yourself in immediate need of cash. See HERE for ideas.)

(3) Reduce Expenses

For those who can see no instant way to bump up their incomes, this may be the only game in town.

Everything begins with a budget.

Start tracking every single penny that you earn and every single penny that you spend.

Your goal will be to get a handle on your cash-flow situation.

You’ll be dividing your spending into two general categories: necessities (or needs) and non-necessities (or wants/extras).

The idea will be twofold.

Number one, you want to reduce — if possible — spending on needs to bare-bones levels. These will be your mortgage, utilities, and groceries, or your “M.U.G.” expenses.

How do you cut these down?

On the one hand, some things are easier to do. Maybe you clip coupons or join a members-only store — such as Costco or Sam’s Club. Perhaps you shop at budget supermarkets. You might buy deli meat and make your own lunch, rather than eating out every day.

Utilities-wise, you might turn the air conditioner up a bit (to make it warmer) in the summer. You can wear fewer clothes while in the house. Similarly, you could turn the furnace down a bit (to make it a littler chillier) in the winter, and then just dress in more layers of clothing.

If feasible, you can look into adding insulation in the attic or even in the walls to further slash heating-and-cooling bills. If you have a little money to make the investment, you may look into solar paneling.

Cutting living or mortgage expenses can be multifaceted, depending on your situation. One thing might be refinancing and trying to secure a lower interest rate on your home loan. You may also look around for less expensive housing or rental options.

(4) Increase Income AND Cut Expenses

Of course, there’s always the composite strategy of doing both.

How Can You Get Started?

Maybe some of these random suggestions sparks something in your imagination and sets you down a better path.

But if you’re a bit unsure of where to begin, we can help.

Contact us today for a no-cost, no-obligation review of your financial situation. We are trained to help St.-Louis- (and surrounding) area families get themselves on track for their futures.

(636)447-1169