How To Stop Living Paycheck to Paycheck When You Make Plenty of Money

According to MarketWatch , the majority of Americans feel like they live paycheck to paycheck. This isn’t limited to low- or moderate-income households. Almost half of those earning six figures feel the same way, PYMENTS found .

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If you’re struggling to make ends meet and feel like you never have enough money to meet your financial goals — like saving up for a down payment or paying off debt — you’re not alone. But neither are you stuck.

GOBankingRates reached out to several financial experts about how to stop living paycheck to paycheck when you earn enough money not to. Here’s what they said.

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Make a Budget or Spending Plan

Sean Fox, president of debt resolution at Achieve , suggested making a spending plan or a budget.

“Most people don’t want to ‘budget’ because it sounds hard, tedious and complicated. It’s not. It’s just a way to understand your finances in simple terms, with an eye on goals you’ve set,” Fox said. “That means taking time to consider what you really want in your life, both in the long run (e.g., retirement, vacations, buying a house) and short run (e.g., a new piece of furniture, clothing, time for your favorite hobby or pastime). Then you can build your spending plan around what it will take to reach those goals.”

Track Your Expenses

No matter how much money you earn, you should always keep track of your spending. It’s all too easy to fall into the trap of lifestyle inflation, something that occurs when you start spending more because you start earning more.

You could be earning $100,000 a year and still have very little to show for it at the end of the month…if you’re not tracking your expenses. Knowing how much money you spend and on what can help you figure out where the problem areas are and fix them.

“Keep a record of every single expense (online and off) you and everyone in your household makes for a couple of weeks,” said Fox. “Most people have some surprises, and are then in a better place to make some decisions on smart spending that’s in line with the budget.”

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Pay Off Your Credit Cards

The Federal Reserve found that 82% of American adults have a credit card, while over 40% regularly carry a balance. While not a guarantee, if you’re living paycheck to paycheck while earning a decent income, chances are you have some credit card debt, too.

If that’s the case, Fox suggested paying off this debt first.

“With interest rates over 20%, this is a huge expense — both in terms of what you’re paying to the credit card issuer and the fact that you’re effectively paying much more than the purchase price of what you bought,” Fox said. “Plus, if you are carrying debt and paying all that interest, you have no opportunity to do something positive with that money —  like saving for retirement and other goals you’ve set.”

If possible, increase your monthly payments to pay off your debt sooner. If that’s not an option, see if you can get a balance transfer card or a low-interest debt consolidation loan instead. Depending on the new interest rate and term, you could end up paying less in interest and getting rid of your debt sooner.

Try To Live Below Your Means

There are a lot of reasons why people who make plenty of money live paycheck to paycheck. One of the big ones is that they don’t differentiate between wants and needs.

“Whether it’s about ‘keeping up with the Joneses’ or just preferring to not do so, the lack of thinking about whether a given purchase will meet a ‘want’ or a ‘need’ fuels overspending and credit card debt,” said Fox. “It is much easier to simply buy what you want than to develop the habit of stopping to consider each purchase, and whether you really need it in your life.”

All of this leads to overspending and living beyond one’s means. If you’re living beyond your means, take the time to distinguish between your wants and needs. Once you’ve done that, see if you can take it one step further by living below your means.

Living below your means “provides some cushion, a way to save and insurance that you are not living paycheck to paycheck all the time,” said Fox.

Limit Discretionary Spending

Similarly, find ways to limit your discretionary spending.

“Cutting back on nonessential purchases is a great way to stop living paycheck to paycheck,” said a Quicken spokesperson. “It is important to consider how many nonessential purchases [you are] making each week that you could either go without or make more cheaply at home.”

You don’t have to do it all at once. You can use a budgeting app or expense tracker to see where your money is going. Or, once a month, you can look through your bank and credit card statements to find out what you spend money on — and start finding small ways to cut back.

Set Financial Goals

Having goals, whether they’re short or long term, can help motivate you to get a hold of your finances.

“By prioritizing your financial goals and having a time frame in mind, you can maximize your savings, stay motivated and move closer to the finish line,” said the Quicken representative.

But don’t fall into the trap of trying to achieve those goals all at once. Having that time frame is key. With it, you can avoid taking too long for a certain goal while also keep yourself moving toward it.

For example, say you want to save your first $1,000 in an emergency fund. If you don’t have quite that much money at the end of the month, that’s OK. Start with a smaller sum — like $100, $200 or whatever you’re comfortable with. If you know you want to save that amount within three months, break down your monthly savings goals accordingly — $1,000 divided by three.

Once you’ve achieved a few short-term goals, you can start thinking about those long-term goals — like retirement.

Joe DiSanto, a financial expert, consultant and the founder of Play Louder , suggested making a “financial independence roadmap.”

“This is a long-term plan to reach your retirement goal, which includes a savings plan and required levels of investment return,” he said.

Be Consistent

As you work on your spending and savings habits, it’s important to be consistent.

“You need to be consistent and make it part of your life,” said DiSanto. “You can’t ‘wing it’ or ‘go with your gut feelings.’ It’s like going to the gym or maintaining a healthy diet. I use those examples specifically because most people struggle with that, too.”

You can go about this in many different ways. For example, you could get an “accountabili-buddy,” someone who can help you stay on track financially. Or you can do things like automate your savings or use a budgeting app. Whatever works for you, do it and be as consistent as possible.

This article originally appeared on GOBankingRates.com : How To Stop Living Paycheck to Paycheck When You Make Plenty of Money