Living paycheck-to-paycheck is a disaster – why you need to escape the cycle NOW!

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.

PwC’s 8th annual Employee Financial Wellness Survey, 2019, also notes that more and more people experiencing financial difficulties:

  • 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.

There is a better way to live, than paycheck-to-paycheck
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Financial mistakes, yes we made lots!

I’m a regular listener of the Choose FI podcast and a question they ask their guests each week is “What is your biggest financial mistake?”. This got me reflecting on my own life and, guess what – I’ve made quite a few!

I didn’t think we were “bad with money’, because we have always had a pretty good grip on the small stuff like managing day to day budgeting, avoiding credit card debt and saving regularly.

However we have made some pretty stupid decisions regarding the bigger material expenses. Needless to say these have been more impactful and damaging to our finances than, say, buying lunch at work each day.

I’ve read and listened to an enormous amount of material on personal finance and the FIRE movement over the past 12 months. As a result, I now have new role models, frames of reference, case studies and solid advice highlighting a better, more sustainable way forward.

Of cours,e it is easy in hindsight to say I would have done things differently. Instead of beating myself up about all the things we did “wrong”, I’m instead celebrating that I’m now more informed. Knowing what I know now, I wouldn’t make some of the same decisions. Hopefully sharing my big errors helps you avoid similar mistakes.

Financial mistakes aplenty
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Ways to combat overspending on impulse buys and save more money

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?

There goes the budget….

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