Deep Dive
Shownotes Transcript
Do you feel like you never have enough money? Yep. Like you're always one paycheck away from a financial disaster? That is exactly...
Well, you're not alone. 78% of Americans feel like they live paycheck to paycheck. And here's the deal. Those people will just stay broke unless they make some major changes. What kind of changes? I'm glad you hypothetically asked. Now, you might think the solution here is just to make more money. But half of people earning over $100,000 say they live paycheck to paycheck. So clearly, there's something else at play here. You see, getting control of your money is less about how much you make and more about what you do with what you make.
So in today's video, we're going to cover eight things you can do to break that stressful cycle so you can create some financial breathing room in your life and finally get ahead. All right, first things first, do you even know what you spend your paycheck on every month? Like down to the penny, do you know? If not, it's time to get on a budget.
More specifically, a zero-based budget, which is where your income minus expenses equals zero. Not because you're spending all your money, but because you're giving every single dollar a job, something to do. So some dollars will be for buying groceries, some will be for saving, some will be for grooming your Dalma doodle. Listen, I don't judge. You do you. And once you do this, I bet you'll notice some spending habits you didn't even know you had. Which is great, because then you can make some money-saving adjustments, like cutting back on your trips to Bojangles. Nine times a week?
It's a little much. It's 1.3 times a day. And yes, I did the math. I like fried chicken. To set your budget up and track your spending, I highly recommend and personally use the EveryDollar budgeting app. And you can get started for free at everydollar.com slash george or click the link in the description below. Now, when you first set up your budget, you're going to start with your income. Then you'll subtract your expenses, starting with the essentials, which I call the four walls.
That brings us to number two on the list. Take care of your four walls first. That's food, utilities, housing, and transportation. These are the biggies. So make sure your budget can cover those before you move on to paying for anything else. Now, you might be wondering how this helps you stop living paycheck to paycheck.
Well, by starting with the four walls, you can be sure you're keeping your family fed, the lights on, the roof over your head, and gas in the car to get to work. And also, Bojangles. I will have my fried chicken. And here's what most people do, which is why they're stuck in this cycle. They get to the end of the month, they realize they don't have enough to cover the necessities, and then they use credit cards to make up the difference. But that credit card debt is just going to drag you down and keep you in this vicious cycle even longer. So you've got to start using your own money, cut up the cards, and stick to the money you have right now.
Now, once you've got your zero-based budget, you got the four walls covered, you can move on to the next thing on the list, which is cut extra expenses. Look over every line item in your budget and try to find things you can cut back on or cut out completely, like Paramount+. I mean, why would you keep paying for that if you've already seen every episode of Zoey 101? Twice. And it's okay, no judgment. We all had that face. Ooh!
I know you see me standing here. For real, though, cutting things like this from your budget might not sound fun right now, but think about what you could do with that money that you save. 50 bucks here, 20 bucks there, here a buck, there a buck, don't go near a Starbucks. Seriously, you can save some coin just by brewing your own coffee instead of paying for that usual venti, ice, quad shot, extra hot, extra wet, caramel macchiato with whipped cream, three and a half pumps of vanilla, and a dusting of matcha powder. And you know what? Don't call that coffee. Call it self-hatred.
I bet you were that kid who went to the soft drink station and just filled up everyone and called it a suicide. Don't do that. You're an adult. I don't know why you always have to be judging me. There are all kinds of other ways you can cut back and save money. You can meal plan, buy generic brands, pack your own lunch, eat out less, try a no spend month, get a library card, and shop for cheaper insurance rates with an independent broker instead of sticking with your old standby, the emu, the gecko, the duck, or whatever avian or amphibian mascot you've been rolling with.
Now, all of these things might seem like small potatoes, but I'm telling you, they can add up to hundreds of dollars every month, giving you thousands more a year. That's margin, baby. That is freedom. That's breathing room. And remember, this is a short-term sacrifice for a long-term gain. We're practicing good money habits now, so later you can do as much of the fun stuff as you want. But first, we've got to break this paycheck-to-paycheck cycle. And another way you can do that is by starting an emergency fund.
And here's why. If you're living on the edge of broke, chances are you're only one layoff or busted HVAC away from a full-blown crisis. So you need a financial safety net. Start by saving $1,000 as fast as you can. Now, that might seem like a lot right now, but once you've cut some fluff from your budget and you sell some stuff lying around the house, you'll be able to save that up faster than you can heat up a... I've never eaten a Hot Pocket and then afterwards been, I'm glad
- Oh, I hate that. - And this thousand doll hairs is just a little buffer between you and life to help you sleep better at night knowing you could pay cash for a small emergency. The key here is you don't wanna fall off the wagon because of some ankle bite or emergency. Eventually, you wanna move on to having a fully funded emergency fund of three to six months of expenses. But before you worry about saving that much money, do the next thing on our list.
And that is ditch debt. Debt holds you back and it's got you paying off last year's Christmas presents in June. And then you're stuck paying off your beach vacation in December. So hear me say this. You can't build for the future while paying for the past. And debt these days is getting pretty...
sneaky. I've seen buy now, pay later options on food delivery apps. Look, if you have to break up your crispy cuppy roni papadilla into four payments of $3.43, I hate to break it to you, but you can't afford those curly, crispy cuppy pepperonis, that dreamy, creamy tomato sauce, those ooey gooey cheeses folded into that fresh, never frozen original dough, forming a convenient handheld flatbread style sandwich. Great.
Now I'm starving. But in all seriousness, living with debt of any kind is one of the biggest things keeping you and America paycheck to paycheck because those payments are eating up your hard-earned income and you work too hard to feel this broke. So here's what you gotta do. First, stop taking on any new debt. No more car loans, no more afterpay, no more opening up a Petco credit card so that you can save 10% on a non-slip pet ramp. Trust me.
Not worth it. Then pay off whatever debt you already have using the debt snowball method, which means you're paying off the smallest to largest balance and ignoring the interest rate. Why? Because we need some momentum here, not math. If we were doing math, we wouldn't be in credit card debt. Let me tell you, this is the same method that I used to pay off my debt years ago. And guess what? It worked. Look, Ma, no debt.
Now, once you've got your debt demolished, you can take that money that you were putting toward the debt payments and use it to actually save some money and make some progress. Let's talk about you for a second. How are you doing? How's your savings doing? What are you storing them these days? Let me tell you, if you're not storing them with a high yield savings account, you're doing it wrong. Because with these accounts, like the one offered by our sponsor, Laurel Road, you're making money while you sleep, while you REM.
which is science for sleep good. Because your savings earns interest just for taking up residence in your account. And specifically with Laurel Road, your account balance earns 5.15% APY right now. Plus, there's a ton of other great perks. No minimum balance required to open an account, no minimum deposits, and your deposits are FDIC insured, plus no bogus maintenance fees.
So start making money off your emergency fund by going to laurelroad.com slash george or by clicking the link in the description below. Today's episode is also brought to you by Tello, a mobile service provider designed to save you money. They've got some sweet savings on the same high-speed nationwide coverage you thought you could only get from the big guys. We're talking $25 a month for the unlimited everything plan and plans as affordable as $5 if you don't need all the bells and whistles. And if single-digit prices are not enough, you can also upgrade or change plans whenever you want.
because contracts and fees, not the Tello vibe. So go to tello.com slash George and get an extra five bucks off the unlimited data plan for your first month of service, or check out the link in today's episode description. Okay, so at this point, if you're sticking to a budget, you've dialed back your spending, you're debt-free, but you're still living paycheck to paycheck,
then you probably need to increase your income, which is number six on our list. Now, one way to increase your income is by taking on a side hustle like dog sitting, car detailing, or delivering people packages and food with Uber, Lyft, Amazon Flex, and DoorDash. But it might just be time to find a better paying job. You gotta get that core income up, especially if you're still making six bucks an hour training emotional support ferrets not to steal jewelry. A noble goal, I will admit.
but you gotta do better. I will never give up my dreams. Now, once you've got some extra money coming in, you'll have more margin to help you stop living paycheck to paycheck. But keep this in mind, earning more money doesn't automatically make you a better manager of that money. And if you're making more than you ever have before, it's easy to start spending more than you ever had before. Which brings us to the next thing on the list, live below your means. Lifestyle creep is a real thing. Now, I'm not saying you have to live like a broke college student for the rest of your life. I'm just saying you can't spend more than you make.
And your every dollar budget is going to really help you with this. Remember, the goal here isn't just to make more money so that you can increase your lifestyle. You're trying to create some financial margin so you can make progress toward your goals, like investing, giving more, saving up for that vacation, or even saving up a down payment on a house.
And speaking of saving, the next thing you can do to help you get out of the cycle is save for big purchases. Nothing makes you anxiously count down the minutes to payday more than blowing a ton of money on new tires, a jet ski, or a meet and greet with the guy who played the pizza boy in Home Alone. And what's the charge for the pleasure?
That's $122.50. So if you see any big spending in your future like Taylor Swift tickets, start a sinking fund to save up and pay in cash. And that way, you're putting away a little bit each month instead of blowing a huge chunk of your income all at once. P.S. If money's a struggle right now, maybe hold off on the T-Swift tickets until you're in your wealthy era. Now look, I know this is all easier said than done.
This little list we've gone over includes a lot of big lifestyle changes, and that can be really hard. And honestly, some days you're going to want to give up. So when things get hard, you got to remember your why, why you're doing all this in the first place. Maybe it's big future goals you're working toward, like traveling during retirement, giving your children a better life or buying a condo on the beach. Or maybe it's just a life where there's no fear of overdraft fees or card getting declined at the grocery store. Whatever keeps you motivated to take the next step.
This is going to help you when you're working that extra shift, hustling to pay off the debt, or being your own barista at home.
And whatever you do, don't lose hope. The stuff I teach on this channel has worked for millions of people, including me, and I know it can work for you. And if you need proof, check out this video to see how my friend Jade Warshaw stopped living paycheck to paycheck and paid off nearly half a million dollars in debt. And don't forget to like, subscribe, and share this with your friend who trains emotional support ferrets. They need to hear this. It's time for a new job, Ethan. I don't know why, but I'm 100% sure his name is Ethan. Thanks for watching. We'll see you next time.