5 REASONS WHY YOU SHOULDN’T LIVE PAYCHECK TO PAYCHECK
Saving can be said to be income put aside and not spent. Or the reduction of payments for recurring obligations, so money can be saved and used at a later date. And not live paycheck to paycheck. Our saving has always been one sure way towards a sustainable tomorrow. Saving money has always been watchwords spoken by various financial institutions Government agencies, and even our parents. Now, one who lives life through the incessant need for ‘pay’ after a days’ work usually termed “PAYCHECK” will not be able to understand the need or even the long-term importance of saving.
This article will provide you with reasons why you should consider saving instead of you depending entirely on your paycheck to survive.
Living your life through the “live paycheck to paycheck” syndrome is not a good thing. You have to invest at least a little portion of your pay so you can become financially secure. But if you fail to save then you will be faced with numerous financial challenges, some of which I have listed below.
Don’t Live Paycheck To Paycheck
With the advent of such an occurrence, your paycheck will stop. Then you will be left with nothing to fall back on.
Unemployment insurance will be there, you say. Ok, but it is usually far less than your regular pay, and it’s only temporary.
But when you’ve got savings, you can quickly pick or better still manage the funds you have saved up until you get another job, or you might even choose to invest a part of the saving into something productive.
If after reading this article, you still plan on living paycheck to paycheck, at least update your resume. This way you are ready for that day you hope never happens.
In cases of urgent needs or emergencies, your saved income can help you out of such situations, but when you prefer to live your life from each paycheck as they come, you have a significant problem. No money to get you through these situations. In addition to your savings, it is also advisable to have an emergency fund to cover such emergencies.
Apart from saving for emergencies, purchases, and other things, you will need to save for retirement.
When thinking about your retirement, there are many things you have to consider. The most important is will you have enough money to maintain your current lifestyle? You don’t want to outlive your money.
A good rule of thumb is that you will need about 80 percent of your current income, in retirement, to continue your current lifestyle.
The sooner you start saving; the more substantial your retirement fund will be.
People living paycheck to paycheck very rarely save for their golden years.
Here’s a great retirement article, I recently read on MoneyTalkNews.
4. Dependence on credit cards:
If you have no saving and you already went through your check by Monday morning, and you are in line at Starbucks, you will be reaching for your credit card.
This habit has the downside of possibly leading to overspending and credit card debt. Without any savings and building credit card debt, you may be headed for late or missed credit card payments.
5. For purchases:
Saving for a big purchase is one thing that you may want to do. Let’s say for example you wish to purchase a house; your savings will be able to cover the down payment and closing costs.
Without savings, the “American Dream” will never happen.
If you fall into this category of living check to check, one reason could be you have no idea where your money is being spent. Maybe you need a budget. A budget can help you determine where your money is going and will help you decide what’s essential and what’s not.
Your constant dependence on a paycheck will not help you when it comes to critical adverse situations, which is why when you have savings, money will always be there to save the day, but this will not happen if you live paycheck to paycheck.