Two-thirds of Americans are living paycheck to paycheck, according to a late 2012 survey conducted by the American Payroll Association. That means that more than half of the American population is more than likely unprepared for an financial emergency. Creating a budget, saving money, and making extra money are three simple ways to help prevent you from living paycheck to paycheck and better prepare you for an unexpected financial situation.

Create a Budget

Stifle all your moaning and groaning when it comes to drafting up a budget! A budget is actually a very simple way of exploring your finances to help determine where exactly your paycheck is going each month. Creating a budget will allow you to understand your cash flow, so that you can have a better idea of how much of your money is coming in and how much is going out.

Start by gathering all of your monthly expenses such as grocery and utility bills, and then add them to your non-essential expenses, such as your gym membership and vacation funds. Once you have arrived at a total, subtract that number from your monthly income. Then, tweak your expenses so that you can make it possible to put money toward savings and retirement funds. Do realize that this may mean making small sacrifices like switching to a cheaper gym membership.

If want you to make it easier on yourself, check out the countless budgeting apps for smartphones, like, which will do all the calculating for you. Some sync up with your bank account, while others let you manually type in your expenses. Experiment with various budgeting methods to find the one most suitable for your lifestyle.

Cut Back on Spending

So money might be tight, but are you buying lunch everyday? Are you going out for drinks after work each night? These purchases here and there can rack up, and more than likely after drafting up a budget and figuring out your expenses, you’ll see that there are areas where you can cut back. Once you decide to go out for lunch just once a week, or to only grab drinks on Friday nights, you can put that extra money toward your savings account

Just because you’re not saving up for anything in particular does not mean you should ignore your savings account. If you’re ill prepared for a financial emergency, like an unexpected medical bill, you might be forced to borrow money from friends or to apply for personal loans for extra cash. While payday loans do offer financial help to those in urgent situations, because of the associated high interest rates and fees, it would be much less hard hitting on your wallet if you had a solid savings to pull from instead.

Make Extra Money

If you’re following a budget, and you still can’t make ends meet, it might be time to look into ways to make some extra cash. Can you pick up extra shifts at work? Will your job let you work overtime? Can you ask for a raise? Do you have the time for a second part time job?

When it’s not possible to make more money at your job, don’t be afraid to get creative. You could always consider a yard sale, or you could hop on free websites like Craigslist or eBay to make a little extra dough. Or what about your talents? Do you have a knack for jewelry making or knitting? There are plenty of websites like Etsy, where you can sell your personal creations for some bonus money.

While it is possible to live paycheck to paycheck without living beyond your means, ignoring and dreading your personal finances will only further hinder your savings account. Picking apart and understanding how you spend your money can help you see the ways in which you can spend more wisely and save more efficiently. And if you ever feel as though you can no longer successfully manage your finances, consult a financial advisor for guidance.

Chloe Mulliner is a writer and editor for several websites dedicated to credit cards, emergency cash advances, personal loans, credit and more. She recently moved across the country from Virginia to California, where she currently writes about all things credit.