You earn a good living, yet you have nothing to show for it. If this sounds familiar, you’re not alone. Better than two-thirds of the working population in the United States lives paycheck to paycheck. This is a dangerous situation that spells disaster. Thankfully, there are ways to dig out from under it and achieve a comfortable lifestyle.

A Fresh Start

With the new year rapidly approaching, your New Year’s Resolution is to create a household budget. If you have no idea how to begin, there are many free templates available online. It’s really quite simple and, once you get the hang of it, you’ll wonder why you didn’t establish a budget years ago. Grab a sheet of paper and all of your bills and write down each one. Include the monthly payment and the balance. Then add in other monthly expenses such as food, toiletries, gas, school tuition, and any other items you pay for. Lastly, tally up the total and then subtract that number from your total net monthly income.

How a Budget Works

Having a budget helps you to track expenses and keep your debt under control. A budget also includes creating a nest egg for emergencies and helps you plan for a vacation and your retirement. Once you have the numbers in front of you, you’ll begin to see where your money goes and discover areas where you can cut back. For instance, if you spend excessive amounts of money on fast food or purchase big-ticket items on impulse that you really don’t need, these are things you need to get under control.

Ways to Save

Luckily, there are many ways to start saving money today. Take a good look at your monthly bills. In particular, you should look at your utilities, insurance, and cable. When it comes to your auto insurance (for example), not all companies offer the same rates. Here’s a handy link if you’d like more information about that. With cable, even though you want it, it’s considered a luxury item. So, if your finances are tight, a great way to free up some money is to lower your bill. You can contact your cable service provider to see if there are other plans available or you can choose to discontinue the service and opt for Netflix and/or Amazon Prime. With regard to your utilities, doing things like replacing light bulbs with LEDs, turning off lights when leaving a room, and replacing the thermostat will a digital model will all help you save money.

Paying Down Debt

Debt is something that often creeps up on you slowly. And sometimes in a relationship, it can cause a lot of stress. It isn’t until you start to have trouble making all of your monthly payments that you realize you have too much debt. The good news is that there are many ways to work towards becoming debt-free. For starters, stop buying things with your credit cards. Use a simple rule: if you don’t have the cash, you don’t buy it. Initially, you may have a bit of trouble, especially if you have impulse buying tendencies. However, once you see your debt start to go down, you’ll use your money wisely.

Improving Your Credit Score

One of the ways in which people achieve financial wealth is by having a stellar credit score. There are many advantages that come along when you are in good standing. You’ll have access to the lowest interest rates, have buying power, and save money, to name a few. By paying down your debt and creating a budget, you’re putting yourself in an excellent position to work your credit score in an upward direction.

When you respect your money, you’ll automatically try to make the most of every penny you earn. This doesn’t mean that you have to accept a mediocre lifestyle. In fact, by learning how to budget your money, you’ll do the opposite: you’ll achieve a comfortable way of life.