The Sunshine State certainly has its perks, but it’s not without flaw. According to GOBankingRates, Florida is one of the top ten states in which residents are most likely to be living paycheck-to-paycheck. In fact, it cracked the top 5 thanks to salaries that just don’t meet the cost of living for many Floridians.
What’s to blame?
In short, low wages and a high cost of living are to blame. The median household income in Florida is $46,140. This means that the average Floridian being paid on a biweekly basis is only bringing in around $1,775 with each paycheck. If you know anything about Florida living expenses, you know that a paycheck like that unfortunately doesn’t cut it for some families. With an average of 60% of that paycheck going to housing, food and healthcare, there’s not much left for anything else.
Break the Cycle
In spite of these facts, Floridians aren’t condemned to living permanently under the stress of a tight budget. Smart financial decisions can help people with limited funds avoid this kind of lifestyle. Even if you find that you are living paycheck to paycheck, there are ways to break the cycle.
- Make a budget, and stick to it. A budget is a necessity in order to abstain from living above your means, and make your paycheck count. Creating a budget doesn’t mean you have to meet with a financial consultant; there are plenty of easy-to-understand budget templates online or on Microsoft Excel.
- Find areas to cut down. It won’t be easy, but if you cut back on even miscellaneous expenses, you’ll see a payoff. Try swapping that daily Starbucks coffee out for one you brew at home, and you could save upwards of $730.
- Set up an emergency fund. Use the cash you save from cutting back to start building an emergency fund. Start setting aside money from each paycheck, and saving it in the bank. It’s okay to start small until you build your way up as you establish financial stability. An emergency fund is sure to help you avoid unnecessary debt in the future.
It’s no surprise to anyone a paycheck-to-paycheck lifestyle can lead to serious debt. Some hardworking people in South Florida are in debt, in spite of their efforts to stay afloat. If you’re facing financial hardship and need assistance dealing with creditor harassment, contact Graham Legal.