If you find yourself counting the last few dollars each month to make sure you have enough to cover your expenses, you aren’t alone. In a recent survey, 7 out of 10 Americans claim to live paycheck-to-paycheck, unable to meet their financial obligations should they face a large expenditure or loss of income. In fact, about a quarter of Americans have no emergency savings whatsoever, according to a report by the Consumer Financial Protection Bureau. So what can you do to avoid being one paycheck away from financial misfortune?

While there are no perfect solutions to every specific financial situation—by finding ways to reduce spending and balance your budget, then setting aside your savings to begin building a cash reserve, you can increase your chances of successfully navigating those periods of financial constraint. Whether you’re a recent college graduate just starting out, a family on a fixed income with growing expenses, or just looking to break the stressful pay-spend cycle, this post will give you some simple tips to cut expenses, pay off debt, and begin working toward your financial goals. First, you’ll need to start by creating a workable budget.

1. Create a Realistic (and Easy-to-Follow!) Budget

A budget is a financial plan that keeps track of all income and expenses (including savings!), to ensure a balance. The best budgets take into account every aspect of your financial picture, set reasonable goals for both savings and restricting spending and include long-term financial goals.

You can budget the old-fashioned way: sitting down with all your account statements, pay stubs, and cash receipts to organize your cash flow by category. Check out the FTC’s simple breakdown of what to do to guide your hands-on budgeting approach. Or you can utilize technology to help track your spending and set goals, integrating your bank and credit card information in real-time and making adjustments to your habits as needed. Some great budgeting apps with free options include PocketGuard and GoodBudget.

2. Make a Plan to Pay Off Debt

High-interest debt, including credit cards, pay-day loans, and certain car payments, can eat up a large and ever-increasing portion of your budget, due to ballooning balances. Making a plan to tackle the debt—paying off the accounts with the highest interest first, can not only bring you relief from creditors but also free up money for other financial goals.

If you only have one or two high-interest accounts, pay off the one with the highest interest or largest balance first. Your monthly statements will show you how long it will take to pay off each account, making minimum-only payments—use this information to guide your decisions. If you have many high-interest accounts, consider a debt consolidation loan. This will simplify your life (only one payment to worry about each month!), reduce money spent on interest, and possibly even decrease that monthly payment amount, as well.

3. Use Autopay

Late fees can add up significantly, and late payments can damage your credit, resulting in higher utility charges, lost rental application fees, and higher interest rates—all things that can cause an additional hit to your wallet. Using autopay for your loans, utilities, and credit cards, can prevent the vicious cycle of late payments and fees. If you are worried you won’t have enough in your account to cover a certain payment, consider these options:

• Set credit card autopay to “minimum payment,” even if you plan to pay more on your own, to avoid fees
• Set reminders on your phone for certain bills you can’t autopay
• Consolidate many debt payments into one loan to lower monthly payments
• Do your own version of ‘autopay’ by paying your outstanding bills with each paycheck first, using the remaining funds to cover your other expenses ‘

4. Automate Your Savings

Just as you ‘autopay’ your debtors, you should do the same for yourself. After your bills are covered—and before any discretionary spending—set aside a little something for a rainy day. See if your employer can automatically divert a portion of your paycheck into a separate savings account to simplify the process.

Don’t be afraid to start small, with as little as $20 a paycheck, working your way to larger amounts over time. But even $20 every other week is more than $500 a year, enough to cover an emergency expense in cash without having to accumulate additional credit card debts. And if you never have to touch that money, over a few years, you’ll have a nice nest egg. Lastly, if you do get any extra income, such as a bonus, inheritance, or a gift, set some aside for savings for a boost.

Saving to buy your first home? Our recent post, 6 Tips to Save for a Down Payment, has even more great ideas.

5. Check Paycheck Withholdings

Many individuals enjoy a nice windfall during tax season, but if you are experiencing a cash shortage during other times of the year, you may want to consider adjusting your withholding to more accurately reflect your income situation. You could even split the extra funds between extra cash for bills and rainy-day savings, for further financial stability.

6. Do a No-Spending Challenge

Set aside one day a week (or one week a month!) where you don’t spend any money. Clean out the pantry instead of ordering takeout or making a trip to the grocery store. Walk, carpool, or use your transit pass instead of filling up your car. Ask a friend, neighbor, or online community group for that much-needed item—whether it’s a pair of shoes for work or a cup of sugar.

Set reminders on your phone for when your regular “No-Spend Challenge” is coming up, to help stand by the plan. If you successfully stick to your challenge for the course of a month or season, reward yourself for a job well done with a small (and affordable!) treat. Or better yet, calculate how much you’ve saved and deposit a nice chunk of it into your savings account, sharing your accomplishment with friends and family.

7. Skip the Car

As we mentioned above, cars can be costly in terms of gasoline, repairs, and insurance—on top of the current high prices for vehicles. When you calculate your budget, you may discover that your vehicle is eating up a significant portion of it. But you can break the cycle of vehicle dependence.

If you have an extra vehicle you don’t use every day, consider selling it, not only for the extra cash but also the income saved on gas and insurance as well. And if one of your vehicles is older, requires more maintenance, or suffers from low gas mileage, that one may be the smart choice for selling.

Whether you are just trying to minimize your vehicle use or cut it all together, there are lots of ways to avoid driving to save money:

• Get a monthly pass to use the Central Illinois Public Transportation for only $35—less than a tank of gas!
• Use ride shares for the certain times you absolutely need a car if can usually get by without one.
• Ask a friend to drive you for the occasional trip across town and chip in for the gas—they may appreciate the extra money, too!
• Walk when you can. Increasing your physical activity has the added benefit of saving money on healthcare costs!
• For longer trips, carpool with a friend or family member or join a carpool group.

8. Eat Out Less

Going out to eat (or even getting takeout) is getting more and more pricey. But simply cutting your takeout or restaurant visits from twice to once a week can save you a lot of money over the course of the year. Consider that if visiting a restaurant costs you and your family $50-75, even choosing to eat at home one more time a month can save you $600 to $900 each year.

Here are some ideas to help you cut your spending on eating out:

• Set a schedule for eating out and stick to it. Pick one day a week for a restaurant or takeout. If you end up going out twice one week, skip it altogether the following week.
• Reserve more expensive restaurants for special occasions only.
• Don’t take the kids. If they spend one night a week with grandma, choose that as your restaurant night.
• Plan your meals in advance. Be sure to have some easy-to-make meals in the mix.
• Make extra portions and eat the leftovers the next day for lunch instead of buying a meal. The average cost of eating out for lunch in Illinois ranges from $8.75-16.30. Even on the low end, you could save over $40 a week (or over $2,000 a year!).

9. Reduce Utilities

Utility bills—especially in the colder months—can be great burdens to your budget. To offset the rising cost of utility bills, here are a few small steps that can save you hundreds each year:

• Turn your water heater temperature down. Turning your water heater down from 140 degrees to 120 degrees can save you $61 a year.
• Using less water can not only save you on your water bills, but if you use less hot water, it can save you on your energy bills as well. Wash your clothing on cold water unless you need to sanitize something, reduce shower time, and only run your dishwasher when it’s full.
• Switch to energy-efficient LED light bulbs when you need to replace a bulb. The average house can save over $200 by switching to LEDs.
• Get a smart thermostat to better regulate your home’s temperature and reduce heating and cooling usage when you’re not at home.

10. Cut Entertainment Costs

According to the Bureau of Labor and Statistics, those living in the Chicago area end up spending almost 5% of their income on entertainment costs alone. But you don’t have to spend a lot of money to have fun and stay socially active. Here are a few things you can do to cut your entertainment spending.

• Cancel unused or little-used subscriptions. Between 51-71% of Americans say they have $50 or more in unwanted subscriptions/memberships each month.  Pick one or two affordable streaming subscriptions as a cheaper alternative to cable or satellite TV (which will cost much more!) and cancel the rest.
• Look for free things to do: opportunities in and around Central Illinois abound. Join the Flanagan Public Library or Bloomington Public Library to rent movies, borrow board games and books for the whole family, and learn about other free events. Get outdoors and enjoy many of the beautiful area trails. Take a day trip to Chicago and take advantage of free museum days.

Put Your Money to Work for You with a Savings Account from Flanagan State Bank

Having a balanced budget is just the first step in your road to financial freedom. To ensure that you’ll maintain your financial stability—no matter what life throws at you—you need to also have a monetary cushion to help you offset unexpected expenses or an unplanned loss of income. And growing your nest egg can also help you achieve your other financial goals, from buying your first home to saving for retirement or education.

At Flanagan State Bank, we’ll work with you to find the right savings product and create a savings plan that works for you and your budget. With a variety of interest-bearing savings accounts, from our free Kasasa Saver to our popular Personal Savings Account with only a $50 minimum balance, there is an account to match every saving preference and need. Open a Savings Account online today, or stop by one of our branch locations to learn more about how we can help you start saving and break the pay-check to pay-check cycle!