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When your financial life is running smoothly, paying your bills on time and being able to buy the items you want is a breeze. Hopefully, this is your situation. But what if it’s not? It may just mean it’s time for a major change to your lifestyle. Here’s how to know when it’s the right time to act:
It’s important to money set aside for a rainy day or an emergency. But if you notice you’re dipping into your emergency savings to cover everyday bills, such as food or your electricity, then your savings will quickly near its bottom or even “zero out.” A savings account that’s dwindling on a consistent basis is a sign that there is a need of a major lifestyle change now. Take a look at what is causing your savings to dwindle. If you’re eating out every week, now is the time to stop. Instead, set up automatic payments to your savings to watch it grow.
A recent survey by CNBC indicated that more than half of Americans live paycheck-to-paycheck. But living by each paycheck can set you up for financial ruin. It’s a sign that you’re in need of a major lifestyle change, too. The reality is, if you miss one or two paychecks when you’re living paycheck-by-paycheck, you can find yourself struggling to keep the lights. You could even be homeless if you can’t pay your mortgage or rent. Move past the paycheck-to-paycheck lifestyle and consider starting a side hustle to generate extra income. Try delivering groceries, freelance writing, managing social media accounts or even selling courses online.
Even if you aren’t struggling financially, there are still advantages to making a major lifestyle change. You can benefit from a major lifestyle change to stop poor money management habits, such as paying your bills late. Late payments have a huge effect on your credit score, which can affect your interest rates and cost you more in the long run. Get the best possible card for your credit score and take advantage of the perks. Get more help with improving your credit score by hiring a top credit repair company such as Sky Blue Credit Repair or Credit Saint, two of the highest-rated companies.
You can also create passive income to add to diversify your income sources. By making major lifestyle changes now, you can prepare for the future to build your wealth and have money coming in even if any of your income sources fail or stops.
From a dwindling savings account to living from paycheck to paycheck, there are clear signs that indicate a need of a major lifestyle change. But you don’t need to struggle financially to need a major lifestyle change, either. Recognize any poor patterns of handling money and address the issues. Set yourself up with multiple sources of income with side jobs or passive income. This helps keep you out of financial ruin even if your main income source suddenly stops generating money or you get laid off from your job.