INDIANAPOLIS — Millions of Americans are struggling financially with increased prices on just about everything due to inflation.
64 percent of Americans are living paycheck-to-paycheck, and about 48% earn six figures. Financial experts say the way to get away from that is exercising discipline when it comes to money, which comes down to several key components.
Create a budget
A budget is key to financial security. You can reduce a lot of stress by knowing how much money you have coming in and how much is going out.
The best way to do this is by looking at all your expenses. Don't forget your utility payments, cellphone bills, groceries and entertainment. Then, compare those expenses against how much you make. If your expenses outweigh your income, you're going to have to take a hard look at where you can cut.
If you're struggling with your budget, take a step back and track your spending to figure out where your money is going. Save receipts, or if you participate in online banking, you may be able to download your transactions into a software program.
Put your purchases into categories to see where you're spending the most money. That will tell you where you need to cut down.
This is the hard part. Now that you see where the money is leaking, you can start plugging the cracks. This might require some lifestyle changes, like giving up cable TV or gym memberships, or cutting down on coffee runs and eating out.
You may be surprised how these little changes can make a big difference in solving your money problems.
Increase your income
If you typically get a tax refund, you might be able to change your tax withholding and get more money each month. Of course, that means you’ll get a smaller refund — if at all — next tax season.
There might be opportunities for a part-time job, or making money with a hobby on the side.
If it is possible, switch careers to a higher paying position.
Consider situations like when you want to retire, how often you want to travel, and how you can afford that dream house or your kids' college education. It makes it easier to save for things when you can really picture them.
The best way to stick to your goals and save more money is to break your goals down into quarterly and yearly numbers that are attainable for your specific situation. However, experts say if you really want to see improvements, the big key will be maintaning discipline.
"Take time — 30 minutes each week — look at everything and manage it as if you were the chief financial officer of your wealth and be cold-hearted. Be a businessperson. 'What can I cut? How can I take care of myself?' All of these different things. Track your spending," said Casey Marx, CEO of Crown Haven Wealth Advisors.