Hundreds of books, articles and blogs have been written about how to handle money: experts advise saving 10% of your salary, not borrowing, earning more than spending. But the Americans do not always succeed in following these recommendations. We will give you 5 simple tips on how to manage your money.

Tip #1: Work on building up a safety cushion

According to the classic 50/20/30 income distribution rule, every month you need to deduct 20% of income towards savings. But not everyone can afford it: on average 9.2% of working Americans earn less than $1,500 per month. How can you save 20% from this amount if you still need to buy food and clothes, and pay utility bills?

Another common piece of advice is to save at least 10% for the future. But this scenario is not popular either: many Americans still have a negative attitude toward the idea of ​​savings. So it turns out that only 23% of the country’s residents have a financial cushion in case of dismissal.

What should you do? For starters, figure out how much you spend each month and save the surplus. It doesn’t matter how much money is left after paying bills or buying food – 10% of salary or $50. Better little than nothing at all.

Financial experts say you need to save as much as is left after all the expenses. Spending 90%? Save 10%. If you spend 80%, then save 20%.

Tip #2: Live within your means

According to statistics, the median monthly salary for Americans is $3,714 per month, still almost half of working Americans live paycheck to paycheck. To find money for unforeseen expenses or to please themselves with new purchases, Americans often have to take Pennsylvania payday loans. This lending product is one of the most popular in the state since payday loans are easy to access and easy to repay. They are usually short-term, most lenders want their clients to repay their payday loans on the day they got their next paychecks or close to this day. They are also in demand due to the fact that the money can be used on literally everything and there is no paperwork work involved. The process can be completed in 10-20 minutes. If accepted for a loan, the funds are transferred to the borrower’s bank account as soon as the same day or the next day. Since every city has some differences in payday lending, we recommend that you study average loan rates and terms before applying. This can be easily done online. For example, if you reside in Philadelphia, study the lending policies related to payday loans Philadelphia, and if you are a Pittsburgh resident, you will probably need information about payday loans Pittsburgh. These pages also can be sued to find licensed payday lenders in your city, check their ratings, read user reviews, and apply for a cash advance loan online.

At the same time, more and more borrowers are taking out a payday loan to consolidate another debt or make a mortgage payment: in 2020, 5.5% of all payday loans were issued in this way. Although an apartment is not the only reason for taking payday loans, 32% of Americans take out apayday loan to renovate an apartment or summer house, 18% – to buy household appliances, 9% – to pay for medical treatment, and another 5 % let money to buy a wedding gift. And only 1% of borrowers invest in business or education.

What should you do? Soberly assess your ability to repay the loan. Basic Rule 28/36 recommends spending no more than 28% of monthly income on paying for housing (including, for example, mortgages) and no more than 36% on all loan obligations. If the debt load indicator is higher after taking out a new loan, try to abandon it or find another source of money.

Tip #3: Improve financial literacy from childhood

The level of financial literacy is growing in the USA, but nevertheless, for 30% of the country’s residents, it is still low. And in many ways, this “failure” is formed in childhood.

For example, Germans talk a lot about money with children, in detail and from an early age: the European Consumer Payment Report says that 65% of children learn the basics of financial literacy in the family, 45% improve their knowledge in thematic lessons at school. Here they even celebrate the World Savings Day every year, when children can take their small savings to the bank and open a personal deposit, and in return receive souvenirs. And this is another way to foster financial literacy in the younger generation.

In the USA, the family often does not become a source of financial literacy: a recent study showed that 41% of Americans do not involve children in planning the family budget, and the topic of money is not discussed at all with every fourth child.

What should you do? Drawing, biology and fine arts are important, but financial literacy lessons are also important. Parents should take care of homeschooling with the help of available resources. You can even play online games that teach kids about money.

Tip #4: Keep track of income and expenses

Monthly accounting of income and expenses is the basis of financial literacy. However, not all Americans keep a family budget. Instead, many people prefer to simply save money: 70% of the 2021 study participants admitted that they are squeezing in spending.

Financial experts explain this by the psychological attitude of the “poor relative”: a person saves just out of habit – simply because his/her mother and grandmother always saved too. But the need to constantly save is depressing: you want to live well here and now, which in the end can form a request for another loan.

What should you do? Start small and install a personal or family budgeting app. The programs allow you to keep records in several categories, count debts, analyze expenses, etc. An even simpler option is to keep records in a regular Excel spreadsheet.

Tip #5: Have multiple sources of income

This idea is promoted by Western businessmen and billionaires. According to a recent study, only 10% of Americans have an additional source of income. People simply lack time and energy for an additional job. For example, American teachers earn about $5,000 per month but depending on the state and the teacher’s qualifications, the amount may be even less. Teachers have to work all day long so that they have enough money, and the load includes not only lessons but also preparation for them, checking tests, classroom guidance, methodological work, and so on. After this, many teachers do not even have time for family and tutoring.

What should you do? Improve your financial literacy and start investing – albeit small amounts, but on a regular basis – this will become an additional source of your income.