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Do you postpone trips to the dentist or mechanic because your checking account is running low? Perhaps you start counting down the days to your next paycheck so you can go grocery shopping.

Living paycheck to paycheck is a way of life for more than three out of four Americans. It may seem like an endless cycle you can’t break out of, with money going out the instant it comes in. But with a few lifestyle changes, you can stop living paycheck to paycheck, avoid bankruptcy, and finally get where you want to go.

Create a Budget

Use an app or create a spreadsheet to list everything you spend each month. Some of these expenses are fixed, such as your rent or mortgage, insurance premiums, loan payments, medications, internet bills, and subscription fees. Others change a little each month but are still predictable, including your utility bills, cell phone bills, gasoline, and groceries. Then, there are the extras like eating out, buying clothes, and entertainment.

All of these items should never exceed your monthly income. If you have less than 10 percent left over, start looking for places to cut back.

Stick to Your Budget

With a financial plan in place, you may realize that you haven’t been tracking your spending carefully. You may have no idea how much you spend on gas per month, or what amount you should budget for groceries. For starters, look over your credit card history and add up your expenditures in different categories. Perhaps you didn’t realize how much your morning coffee run adds up each month, or that eating out every weekend is a splurge you can’t afford.

This is the key to pinpointing where you can shave off unessential expenses so you can live within your means and break the paycheck-to-paycheck cycle.

Never Make Large Purchases on a Whim

Impulse purchases are budget killers, especially when you give in to a big-ticket item without saving up first. If you want to go on vacation, contribute to a fund once a week until you’ve built up the necessary savings. If your laptop is showing signs of giving out, start saving and looking for deals.

With a little foresight, you can make big purchases without going into debt, which is the key to avoiding bankruptcy.

Build Up Your Savings

When creating your budget, don’t plan on spending every dollar you bring in. This may work when things are going well, but when unexpected costs arise—such as a car breakdown, medical problem, or broken washing machine—you need to have a savings account ready to cushion the blow.

Plan to put away at least 10 percent of your earnings to build an emergency fund. Then, maintain a savings account of at least $1,000 for a rainy day.

If you’re still in dire straits after attempting these changes, it may be wise to speak with a bankruptcy attorney in Chicago. Call Cutler & Associates at (773) 360-5802 for a free consultation to analyze your situation.

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