Here are steps you can take to stop living paycheck to paycheck

What would happen if you lost your job or your next paycheck was late, or didn’t arrive at all? For most of us, the answer is frightening.

A CNBC and SurveyMonkey poll found that 63% of middle-class American adults feel they live paycheck to paycheck, with less than $500 remaining each month after expenses. The lack of cash reserves leaves many households vulnerable during unexpected income losses.

Sam Fernandez, a consumer who experienced an extended period of unemployment, struggled when his savings failed to cover his recurring bills.

“I was out of work for probably close to a year,” Fernandez said. “It just snowballed, you know, and it got completely out of hand and then, just kinda ran out of funds.”

To help build a cash reserve, Consumer Advisor Clark Howard recommends starting small by setting aside one cent of every dollar earned. For an average Pittsburgh worker earning about $1,000 a week, setting aside one cent equals $10 a week, or $40 a month. That strategy generates $240 in six months, and after six months, stepping up the savings rate to two cents per dollar increases monthly savings to $80, yielding over $700 in a year.

“If you have never been able to save any money, start by saving one cent of every dollar you make,” Howard said. “If you do it in baby steps... It’s amazing how much change you can bring into your wallet.”

In addition to saving income, Howard advises drivers to adopt a half-tank rule for vehicle fuel management. Refueling when the tank reaches half-empty allows consumers to shop around for lower prices rather than filling up in a panic. “Instead of waiting until you’re past empty. You stop once you hit half a tank,” Howard said. “When you see gas that’s a deal somewhere, fill up then.”

Howard also recommends trying a cash-only approach for one month on all purchases. Eliminating credit cards, debit cards and tap-to-pay options helps consumers reduce discretionary spending. “No credit, no debit, no tap to pay and you’ll be surprised how much less money you spend when you’re having to spend actual money,” Howard said.

For home utilities, Howard suggests reducing home heating temperatures during the winter. Lowering the thermostat by two degrees cuts monthly heating bills by about 3%, producing roughly $75 in savings over the winter season.

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