How Long Can YOU Live Without A Paycheck? 3 Questions To Get Your Finances In Order
The beginning of the year is a perfect time to do a check up on your finances. Prepping for tax time, dreaming or planning for vacations, there’s never a WRONG time to get your money right.
I’ll spare you my soapbox speech about how angry what is shaping up to be the longest government shutdown in history makes me. But let’s just say the impact this has on thousands of workers and by ripple effect even more Americans, I woke up thinking about that question.
So what’s your answer, how long could you go if your paycheck just disappeared? Over 2/3 of American women don’t have a savings plan that would cover them for the recommended 6 months of expenses that an emergency fund should cover. But since a whopping 80% of us are living paycheck to paycheck, it’s quite possible that you couldn’t survive more than a couple weeks before you’d need to dip into savings or worse yet, borrow money to stay afloat.
I know that scenario all too well.
I thought I could handle just about anything. Having a husband whose job included periodic layoffs had convinced my that I knew how to survive. I used to call myself the discount duchess for good reason, I know how to save money and stretch a small budget better than most, so I was able to make my salary cover most of our basics. But when my husband lost his job, and was unemployed for months, our family ended up saddled with debt that I had no idea how to get free from.
But then I had an idea. I had already started by side hustle and even had some success. But what if I could turn my side hustle into a real business? One that was profitable and consistent and took me from being worried about how far I could stretch the groceries to choosing where to invest. And you know what? I had the right idea. I invested my time, and some money, in growing my after hours activities into a sustainable business and now I’m well on my way to that perfect credit score that I want and the financial stability that my family needs.
But if you’re just starting out, realizing that you couldn’t go very long without a paycheck or maybe just deciding that this is the year you’ll take control of your finances, here are three questions to get you started.
What are my dreams for the year? Money is simply a means of movement. Being specific about your dreams will let you set achievable goals. Most people feel some anxiety around money so if you begin with positive intentions, thinking about how extra money or less debt can help you live your dreams, you’re more likely to put in the effort needed to make progress. So let yourself dream and then decide how much money you’ll need to earn to bring them to reality.
What is my income? This may be simple, but you’d be surprised how many people are surprised at the end of the year by their actual annual salary. A few years back when most companies went to electronic processing of payroll, people stopped looking at their checks. Many people are happy if they get a few dollars more or will review it if they think it is wrong, but the average salary worker doesn’t know their actual hourly rate. Pull up your paystubs, look at any interest you may be earning on your accounts, check how that 401k is growing, get clear about your money, even if it means acknowledging that you’re not earning what you need.
Where is my money going? How many of you just pay bills when they come due without actually going through the bill? I mean open it up and read it line by line? I had a friend who realized after 6 months that she had been double billed for a charge on her cell phone plan and by the time she noticed it, the company said they could only credit her for a 60 day period. Sometimes you are double and triple paying for services or added benefit plans just because you haven’t looked at where your money is going. Saving your money gives you the capital to pay down debt, invest in yourself and reach your goals. Start by writing down every bill you can remember, then pull up that bank statement and look at every single transaction so you can see where your money is going. Think your bills are too high? Grab my book, 20 Ways to Save $20 in 20 Minutes or Less, and learn how I cut expenses to maximize my families resources.
Knowledge is power so once you have this info you can decide if and where changes are necessary. I help families make the changes they need to live the lives they deserve every day. Need some help, let’s get on the phone and talk about it.