Do you spend all or more than you earn?

Some people reading this might wonder how that's even possible, while many others can relate. And here's why so many get it. It turns out that HALF of Americans spend their entire paycheck or even more. That means one out of every two people are living paycheck to paycheck or are accruing debt just to live and are at risk of financial crisis at any given moment. Even if this doesn't hit home for you, it's likely that you have family or friends in this situation. So here's what to do next:

Keep calm

Panicking and stressing out even more won't help. You realize now that you're in a tight financial spot and it's time to take back control of your finances. So stay calm and create a plan.

Create a budget / get free financial counseling

Because finances can be overwhelming when you're already stressed, it can be difficult to get a plan in place without a little help. And that's okay because LSS provides FREE financial counseling. You and your counselor will come up with realistic options and steps to take to get your budget balanced. Call 888.577.2227 to schedule your free session or GET ALL YOUR SUPPORT ONLINE.

If you choose to do it on your own, that's okay, too. Be sure to create a budget and include ALL of your expenses. Don't forget about ongoing periodic expenses like vet bills, vehicle tabs/maintenance, memberships, etc.

Trim expenses

Whether you work with a counselor or not, trimming expenses is the quickest way to start getting back on track. Go into crisis budgeting mode until your situation is stable. Look through your budget, determine needs vs. wants, and start reducing or cutting those non-necessities. For instance, start bringing coffee from home and skip the coffee shop or cancel cable.

Determine long-term plan

Once you've made cuts and you're no longer spending as much as or more than you make, figure out what changes need to be permanent. Perhaps you only needed to temporarily suspend cable service because you were able to trim other areas indefinitely. Be sure to find a healthy balance so that you don't feel like you have no wiggle room in your budget for fun things.

Pay off debt

If you've been supplementing your income by charging, it's time to break that cycle ASAP. So don't spend what you don't have. Even if you had credit card debt from something else, getting rid of that debt will be life-changing. So stop charging and determine the fastest way to pay off that debt, which could be a Debt Management Plan. DMPs through LSS help people improve their credit with on-time payments, pay off debt faster, and save money in interest. If you meet with an LSS counselor, you'll get enough information to decide if the DMP is right for you.

Start saving

It's important to fit at least a little bit of savings in your budget even while you're paying off debt. So it might be worthwhile to remain in crisis budgeting mode a little longer to building up savings. Without that safety net, you would likely have to rely on credit again if an emergency expense comes up. So do your best to set aside cash in your emergency fund to avoid more charging.

Create a back-up plan

Consider what you'd do if you had an unexpected $500 expense pop up or if your income was reduced. Savings may be the first thing that comes to mind, but there are other options like going into crisis budgeting mode. Then, brainstorm your options. Can you get a roommate or move in with family? Could you sell a large item? Use family/friends for daycare? Find a PT job or get overtime? Make a list of realistic options that you could fall back on if a financial crisis strikes.

Following these suggestions will not only help you stop spending everything you earn (or more); these actions will help you achieve financial stability. Being financially stable helps you get rid of stress so you can live your best life. And maybe even take that trip you've been dreaming about.

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.