← Get A Grip On Your Money with Damon Carr
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Over 60% of Americans are living paycheck to paycheck, including nearly 49% of six figure earners, according to a 2023 Wall Street Journal and a Lending Club report. If you're stuck in this cycle, chances are your habits, not your income, are to blame. And let's break it down and cut through the nonsense. You don't know where your money is going. If you can't measure it, you can't manage it. Not tracking your spending is like driving blindfolded. It's only a matter of time before you crash. Build a it. Every dollar should have a name and a job. Ignorance won't build wealth. Keeping up with the Joneses Keeping up with the Joneses is nothing but adult peer pressure. And let's be real, who are the Joneses anyway? The Joneses are an illusionary model of success created to make you feel inadequate. Focus on your own goals, not impressing people who probably aren't as successful as they look. You're addicted to gadgets. It's possible to be tech savvy and money? Don't believe me? Ask your smartphone. If you're blowing money on the latest tech just to keep up, you're stunting your financial growth. Your wallet deserves better. You're eating out too much. Eating out four times a week isn't just hurting your wallet, it's killing your waistline. Reducing how often you eat out will shrink your waistline and expand the wiggle room in your budget. Win, win. You're overspending on clothes. You want to know what's really Gucci? Fully funding name brand retirement account like 401ks, IRAs, TSPs and 403bs. Your closet doesn't need to be on fleek if your retirement plan is falling apart. You're overspending on cars. You're being pimped by your ride. If you've spent more on cars over the past decade than you've saved for retirement, it's time to rethink your priorities. Payments. Insurance and maintenance on new cars are financial quicksand. Buy used and get back on solid ground. Your house and your house payment are, well, just too big and is busting your budget. Here's the deal. Your monthly mortgage payment should never exceed 30% of your net income. And the purchase price of your home should never exceed three times your annual income. Anything more is setting yourself up to be house rich, Cash poor. You're spoiling your kids. Buying your kids everything they want won't make them better people. The best tools you can give them are a moral compass, a strong work ethic and a constant reminder to make good decisions. Teach them the value of earning what they have. You're wasting money on adult toys. Stop acting like a big baby. You don't get what you want, you get what you can afford. If buying boats, RVs or timeshares is hindering your ability to save and invest, guess what? You can't afford it. Prioritize your future over short term thrills. You're financing your vacations. The best vacations are the ones that don't follow you home in the form of credit card balances or personal loan debt. Plan ahead, save up and pay cash. Nothing ruins vacation memories faster than a 20% interest rate. Credit cards are killing your budget. Here's the cold, hard truth. Only 35% of Americans pay off their credit card balance in full every month. And when you use credit cards, you tend to spend 30% more than if you were using cash. Why? Because it doesn't feel like you're spending real money. Worse, many people use credit cards to supplement their income, which is financial insanity. All financial experts agree credit card debt is bad debt with average interest rates upwards of 20%. Credit cards are straight gangster. Avoid them like the plague. The bottom line Living paycheck to paycheck isn't about income, it's about choices. Cut out the excuses, make better financial decisions and build a life where your paycheck works for you, not the other way around. Financial freedom is possible, but only if you're willing to do the work. I'm Damon Carr, your money coach and tax pro. Please like share and subscribe.