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6 Ways to Break the Paycheck-to-Paycheck Lifestyle

By U.S. News & World Report

If you’re stressing about your finances and living paycheck to paycheck — for yet another month — it’s time to set some new limits on your spending. No matter how much you earn, understanding how to manage those dollars will get you further than simply earning more. It’s one reason why some lottery winners find themselves facing bankruptcy within a few short years — those millionaires didn’t adjust to their new lifestyles by living within their means.

Fortunately, you don’t have to be the next financial tragedy. Here are some things you can do to break the paycheck-to-paycheck cycle, starting this month.

[See: 6 Ways to Treat Yourself on a Budget.]

1. Assess your resources. You need to have a clear idea of exactly how much money you have access to each month. This does not include access to credit. Make sure you are working with estimated earnings only, whether that’s from one or more paychecks, passive income or side business income. If you are earning passive income or extra cash on the side, take an average of the last six or 12 months so you have a realistic idea of how much is hitting your bank account each month.

2. Track your spending. This should be a no-brainer, but you’ll be surprised by how many people don’t track their spending until they are already in trouble. Get into the habit of tracking every dollar spent using the Mint smartphone app or other budgeting apps, such as You Need a Budget or PocketGuard that make it easy to log those expenditures in real time. You can keep a running tally and review everything in detail every few days or at the end of the week. This will make it that much easier to cut out wasteful or mindless spending.

[See: 12 Ways to Be a More Mindful Spender.]

3. Pay one month’s bills ahead of time. This may not be realistic for you if you don’t have any savings right now or are still waiting to get paid. However, if you have the cash available, this is one of the smartest ways to stay ahead of the financial game. Paying all of your bills early — or at least updating your budget as if those dollars are out of your hands — can help you feel more secure that your bills are covered and allow you to shift your focus to earning money for next month all month long. If you work on a commission basis or are earning money with a side job, this can motivate you to earn more so you can take care of next month’s bills and enjoy the surplus, or stash that away in another savings account.

4. Set realistic spending limits. If you’re having a hard time staying within budget, maybe your spending limits are too strict. Like with dieting, depriving yourself of spending money on things you enjoy can trigger a spending spree or justify spending more on something unplanned. Be realistic when creating your grocery budget, entertainment budget, clothing budget and other spending categories so you aren’t sabotaging yourself just to reach your goals.

[See: 10 Money Leaks to Shut Down Now.]

5. Become a bargain hunter. You don’t have to be cheap to be frugal but you do have to be frugal to save money. Make bargain hunting fun, so you don’t feel like you’re missing out just because you’re spending less these days. Seek out deals on daily deal sites, such as Groupon and LivingSocial, so you can try new restaurants at a discount or snag deals on tickets to area events. Subscribe to email newsletters from your favorite stores so you get updates about upcoming sales and can take advantage of online-only specials. Save money on groceries by keeping up with in-store specials and limiting the number of trips to the store each week. Every trip can be temptation to spend more than you planned, so consolidating those trips can help you save on food (and gas).

6. Be savvy with credit cards. Eliminating a dependency on credit cards will always get you ahead financially and if you find yourself living paycheck to paycheck, now is a great time to break the habit. However, if you’re making use of rewards credit cards or credit cards with cash back incentives, don’t be afraid to take care of bills, groceries and other expenses using those cards to earn points and cash. Just remember to treat your credit card charges as a short-term loan that you need to pay back every month. This way, you’ll keep your cash flow status current, earn your rewards and avoid the burden of interest charges or late fees.

More from U.S. News

50 Ways to Improve Your Finances in 2016

12 Millennial-Inspired Ways to Spend Less

10 Fun, Frugal Ways to Spend Your Free Time

6 Ways to Break the Paycheck-to-Paycheck Lifestyle originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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