It’s estimated that ~78% of workers are living paycheck-to-paycheck. Scary, but not surprising. People from all walks of life are scraping by and struggling through life – regardless of gender, education or income levels.
49% of all employees say they find it difficult to meet household expense on time each month
Only 31% would be able to meet their basic expenses if they were out of work for an extended period of time
59% consistently carry balances on their credit cards, with 37% finding it difficult to make their minimum payments each month
35% of Millennials and 30% of Gen X employees are using their credit cards to pay for monthly necessities which they could otherwise not afford
Most worryingly of all is that 45% of people surveyed have less than $1,000 saved for unexpected expense. Unfortunately this situation is worse for women, with 51% not having this relatively small amount of money put aside vs. 38% of men.
The situation is dire and getting worse. It’s time to do something about it, because living paycheck-to-paycheck is a disaster not only for your immediate finances but also your general wellbeing, happiness and future living standards.
I’m an aspiring frugal minimalist, working towards Financial Independence. Given that, saving should be second nature and easy for me, right? Well normally we are are pretty good and put money away like clockwork, but this week was a reality check as my monthly budget went up in flames. The budget collapse wasn’t due to any unforeseen disaster, medical emergency, or car problems. I simply overspent and purchased what could be classified as an unnecessary, luxury item.
So what went wrong and how do I avoid overspending in the future?
As a family we LOVE to travel overseas. We get that invigorating feeling of adventure and excitement heading into the unknown. We are also grateful for the opportunity to visit amazing ancient monuments, incredible thriving cities and places of breathtaking natural beauty while experiencing new cultures and languages. Best of all we get concentrated time together as a family in inspiring, interesting and new environments. Exploring the world has resulted in some extraordinary experiences and lasting memories. Needless to say but we have a bad case of wanderlust!
For us, planning and preparation lays the groundwork for a successful holiday. As we’re in the process of working out details of our next trip, I thought it would be useful sharing our top tips for overseas travel preparation.
We have only just started on our journey towards financial independence (see my previous post for a quick overview of FIRE) so we haven’t yet built good and lasting habits or found a sustainable level when it comes to balancing saving and spending.
Reflecting on last month it feels like we often took one step forward and two steps back. It’s been a struggle at times. It’s also been exciting as we saw the impact of our decisions.
Overall though I think we made great progress in April and are off to a great start.
Moved to a smaller home, which will hopefully cost less to heat, cool and maintain
Changed banks and received a $500 signup bonus in the process
Cancelled our cable subscription and home phone line
Reviewed our auto insurance, changed insurers and saved ~50% in the process
As a result of lowering our expenses we’ve now set a new baseline for living costs and will be able to save more each month going forward. The pleasing thing is that we’ve stopped drifting through life and now are much more intentional about our finances.