The 10 Reasons Why You’re Living Paycheck To Paycheck
Amon and I once read a statistic that shocked the both of us: In America, roughly one in four families that earn over $150,000 a year are living paycheck to paycheck. You might be thinking, “how is that possible?” We asked ourselves the same thing. $150,000 should be more than enough for a family to live on per year.
But, you might also be one of those families. And you might be wondering why you’re in such a confounding situation. Well, today I’m going to show you why many of these people are living paycheck to paycheck, and hopefully give you something to think about if you’re in this situation yourself.
1. You Don’t Know Where Your Money Is Going
It’s kind of common for people who earn a lot of money not to pay attention to how they’re spending it. This is a pretty basic one, and can easily be solved by making a budget and tracking your expenses.
2. Keeping Up With The Joneses
If you don’t know this saying, it all comes down to one thing: Class. People want to show the world that they belong to a certain class, and doing that involves spending their money on expensive, materialistic things. Whether it’s a car, a watch, a piece of jewelry - whatever it is, it’s draining your bank account.
And often the only reason to do this is to flex on others and keep up appearances, which is nowhere near as important as having assets and financial stability. This kind of mindset is always toxic to financial growth.
3. Too Many Gadgets
I get it. It’s tempting to want the newest iPhone, or whatever technological toy catches your fancy. But more often than not, that fancy espresso machine is taking a significant chunk out of your paycheck. Do you really need that $1,000 juicer that you’ll probably only use for the first few months before stuffing it in the back of your kitchen cabinet?
Eating out four times a week isn’t helping you. From fast food to expensive restaurants, any time you’re going out for food and drinks you’re spending more money than you think. By making your own food, you could be saving hundreds of dollars a week. Learning to cook is one of the best financial hacks you can incorporate into your everyday life.
5. Clothing And Fashion
Ahhh, clothes! The silent killer. The problem with clothing is that shopping for it can sometimes be more of a pastime than a necessity. If you’re the kind of person who has so many clothes that you have to rotate them through the seasons, and put half of your wardrobe in storage while you wait for hot/cold weather, you have too many clothes!