The Key to Financial Stability

Updated on April 25, 2020
Alex Berry profile image

Alex is a passionate person with a natural talent of writing and helping others via positive reinforcement and knowledge from experience.

It's time to face your finances head on.
It's time to face your finances head on.

Ever Notice How You Always Make It to the Next Paycheck?

Crazy, isn't it? You run your account completely dry on Tuesday, and you don't get paid until Friday. You always make it to Friday alive! Every week you wonder how you ended up here, and you're always waiting for payday to start this process over again. Trust me when I say I've been there, and I can help you make this pay period, and the next pay period last even longer with just a few simple steps.

Step 1: Identify the Variables

First off, you need to determine what kind of financial help you need. There's always a way out, and admitting to the problem is the first step. Identify where your money is going.

  1. Create a simple spreadsheet of one month's expenses. Be sure to include everything. Doing this creates a visual representation of where your money is divided and helps to identify what needs to happen.
  2. Separate these expenses into 2 categories. What's needed to survive, and what isn't. I prefer these categories because most people think they need things to survive that they actually don't. It's the first step to being back to reality. Do you need your car to survive? No, you don't. Necessities are food, water, home expenses, utilities, etc.
  3. Now, which category has more items? What are the totals of each category? Compare the 1st category (necessities) to your monthly average income. Chances are good, this number is significantly lower than your monthly income. The amount left over, is what we have to work with.

If you don't like your ratio, consider looking into your necessities. Is it necessary to live in your area? Is it necessary for you to have a large home? Trimming some fat in these areas (if possible) can help significantly. For example: Renting or owning a different area, can impact property tax, home values, rental costs, etc! Owning or renting a smaller home can significantly decrease your utilities and average costs. All of which can be done!

Suppose your necessities are on point. You're happy with the ratio of Needs/Income; Great! This is where things get easy.

Necessities vs. Variables

Housing: $1,000
Car Payment: $390
Utilities: $280
Amazon Prime: $60
Groceries: $320
Cell Phone: $120
Total: $1500
Credit Cards: $122
Netflix: $12
Car Insurance: $189
Total: $893

Remember: Necessities! DO YOU NEED IT TO SURVIVE? In the example above, that's $893 worth of things I'm spending money on that I don't necessarily need to survive. Pretty crazy when you think about it like that, huh?

Step 2: Consider If You're Living Within Your Means

Ok I know you're still thinking you NEED a car to survive. But it goes in a separate category because there's a difference between getting to work, and driving a car you cant afford to work. Trust me.

I learned this the hard way. At one point in my life, I was doing particularly well for myself financially. I had a good grasp of what I needed, and what was extra. During that time I convinced myself I needed a new vehicle, and I could afford something a little better; I deserved it! Right? After a period of time I began living paycheck to paycheck. I was making it work, utilizing grace periods, paying late fees, and making it until Friday to buy my groceries. During this time, It never crossed my mind that I had stepped outside of my means. I assumed I was wasting my money on food, or on other things.

Soon enough, something came up and disrupted the process of making it until Friday. I spent my truck payment on an emergency. Each month I continued to pay my normal payment, each month being a month behind. Eventually, this ran its course and ended up being 2 months behind. Then 3 months behind. Feeling helpless, I didn't understand how I couldn't afford this vehicle. It was only 500$ a month. My necessities ratio nets more than that every month! What Gives? I was not living within my means. Although $500 was available within my ratio, I didn't account for everything else. I didn't account for the extra fuel it consumed. The insurance coverage costs, the maintenance costs. After destroying my credit, and nearing repossession, I decided I didn't need the vehicle to survive anymore. I sold it, and paid it off; with very little left over to buy another vehicle.

Back to reality. Hitching a ride to work, borrowing my girlfriend's car. Carpooling. I made it work. Just like you do every Friday. It is possible.

Living within your means is a painful lesson. Ultimately embarrassing explaining why I no longer had a vehicle. An experience I will always value.

Step 3: Break Down the Ratio

So, you're comfortable with your ratio. Now it's time to break it down further. Take every item from the "other" Category. Split them up again into 2 more Categories. Wants, and everything else. Using the same thought process as before, using your "leftover" from the other ratio, what is your ratio now? Leftover from this ratio should be used for saving. Saving for an emergency, or a vacation, a "buffer" if you will.

You'll find that as you build a buffer within your monthly expenses, saving becomes easier. The trick here is trimming the fat from each of these categories, and it should be easy. You don't need these things to survive, remember? You must have a comfortable ratio leftover here for your lifestyle. Trimming these require remembering what you NEED, and creating a comfortable balance of necessities, and things you want, with something leftover. The necessities you choose to balance and draft are up to you. However, you must compromise here. Devise a few plans of what you're going to get rid of with different variables. I'll help you make this decision a little easier. It's the best mindset, and the BEST tool to help you continually stick to your goal.

Be Clear With Yourself! Make the Tough Choice!

Everything Else
Car Payment: $390
Netflix: $12
Cell Phone: $120
Amazon: $60
Car Insurance: $189
New Shoes: $122
Total: $699
Total: $194
Wow! I saved 194$ by deciding what is more important to me. $12 a month for Netflix is nearly $300 a year! Imagine what I could do with that? Is it really that important to me? Could I possibly borrow someone else's account or watch public television

Step 4: Remember the Single Best Way to Save

  • Be Thankful.
  • Be Humble.
  • Be Realistic.
  • Materialistic Things Do NOT Define You.

You require a car for transportation. But could you drive something cheaper? Do you really need that brand new car? Who cares what the neighbors think. Do what's best for you. Be thankful for having extra to afford a vehicle. You can't take it with you. Do you need new clothes? Be thankful you have any. Do you need that lawn service every month to keep up with the Jones'? Absolutely not. Let them have the greener grass! It's not a competition. Who is there to impress? The people in life that are the must humble, are the happiest. Spend money on happiness, not materialistic things. It's new for so long, and eventually will not make you happy. Find happiness in things you cannot buy, and be thankful for the things you can. By utilizing this thought alone, you will find saving extremely easy.

Despite that feeling you always have about wanting to make more money, It will never help any of these financial issues until you identify your needs, and identify reality; who you're trying to impress.

The more money you make, the more money you spend. Making more money will never solve your problem of living paycheck to paycheck. It's all about living within your means, and overlooking materialistic things. They are not valuable. Happiness is valuable, Family is valuable.

It's THAT Easy!

By going through the experience of losing my vehicle, explaining to friends and family that I could not afford it, was the key to finding this out. I realized that after I got rid of it, after explaining why it was gone, after being embarrassed, it wasn't a big deal. No one made fun of me, I still made it to work. I fixed my credit, and I didn't feel the need to have another flashy thing in life. After being without flashy, materialistic things, I've found that people don't treat me any differently. I don't become jealous of the Jones' new Cadillac, because I'm thinking of their payment, not the shiny paint that will eventually fade. The scenario was the exact same when I purchased my vehicle. I loved the feeling of being flashy, but at the end of the day, I'm the same as anyone else. Our ratio's are just different. My happiness did not change with the vehicle in my driveway.

What Do You Think?

Did this article shed new light for your finances?

See results

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)