Wanna Know How You Can Stop Living Paycheck To Paycheck?
Life is hard when you are living paycheck to paycheck but I don’t have to tell you that.
If you are just figuring out how you’re going to manage to pay for your monthly expenses such as transportation, groceries, credit card debt, or rent, all of these things can really have you spinning in a circle wondering how on earth you could possibly manage it all.
If you are living paycheck to paycheck right now read on in this article so you will have the tools you need.
Discover If You Have A Spending Problem Or If You Have An Income Problem
Just like another problem if you want to fix something you first have to know what you are fixing. For this situation, you must recognize if you are living paycheck to paycheck because you have bad spending habits or because you simply aren’t making enough money to live comfortably. So ask yourself and watch your habits that’s the only way to find out.
You must figure out where all of your money is going each month. To do this successfully you first have to know and write down your income for the month. From there you should sit down and list your expenses. Examples. How much do you pay for housing, rent/mortgage? What are your utility costs? What is your grocery bill?Phone/Internet/Netflix costs? You must include all of your expenses right down to the nitty-gritty expenses.
In my personal experience when I sat down to do this exercise, I felt like it was all of a sudden making more money immediately and I bet you will feel similar.
This is because you find out that your expenses aren’t near as costly and close to their actual income as they had thought. This immediately makes you have this realization that they simply should not be struggling with money at all.
So you’re probably wondering where is all the money going that makes us feel like we are broke? Now you probably know the answer but I’ll say it anyway. It is the small $5 here $10 there that are really hurting us (Starbucks, movie, online purchase, eating out.) All these purchases are petty when looked at individually put when they are combined they add up very fast and quickly result in your money problems.
But it is not just you! Those small purchases are the culprit and the reason so many people are stuck living paycheck to paycheck and never find their way out.
1 | Budgeting
If you don’t have a budget as of now it is about time you make one.
I know it. that damn B word again. Budgeting, it gets a bad reputation as being restrictive and of preventing you from having fun. But really that couldn’t be further from the truth. Budgeting really is the best thing you can do for your personal finances.
Personally, my absolute favorite thing about budgeting is that it lets you make a plan for your expenses and allows you to see your financial goals clearly and work towards them.
This will allow you to be proactive instead of reactive when a situation comes up that is less than ideal.
You can plan ahead for gifts, parties, nights out, and vacations all while still being able to pay all of your bills while staying out of debt for good.
- How To Budget With Success On An Irregular Income
- Budgeting Myths You Should NEVER Believe
- 7 Things You Are Forgetting To Budget For
- Budgeting For Success As A Beginner
2 | Pretend You Don’t
Have Any Money
Essentially this is just a way to trick your mind into having better spending habits so you can start spending less.
Having this mindset will greatly increase your ability to be able to save even more money. For instance, if you normally spend $225 on groceries why not try cutting back and spend only $200 or $185 on groceries the next time you go to do your weekly grocery shopping.
Being able to cut your grocery bill back is really an excellent way to save a bit of money each month consistently.
By always pretending to have less money than you actually do, you will be able to save a little extra to go to other expenses you have.
3 | Start An Emergency Fund
So here is why you need an emergency fund. Picture this scenario, you are living paycheck to paycheck and your car needs $700 worth of repairs. Woah right? This can be one of the scariest moments in life when you are living paycheck to paycheck, especially so when you do not have an emergency fund set up.
When something like this happens there really are only 2 possible options.
- You put the amount on your credit card because you don’t have savings.
- You have a $1000 emergency fund in place and you are able to use these funds to cover the cost immediately instead of stressing about going into debt.
I am 100% sure that every single person would choose the second option time after time.
I have written an article specifically to help you build your $1000 emergency fund.
4 | Generate Some Extra Income
Everyone goes through rough financial times that sometimes have us living from paycheck to paycheck. And through those challenging times, a side hustle could really be the answer you’re looking for.
Even if it is only a couple hundred dollars here and there it all adds up and could mean the difference between making end meet and not!
While browsing about looking at side hustle I came across this article and found that more than 35% of adults living in the U.S. have a side hustle. On average those side hustles are paying $700 per month!
Here are some of the most popular side hustles to check out and help stop living paycheck to paycheck. Click here for the list of side hustles.
By finding different ways to add multiple income streams to your bottom line, which will give you the means to live more comfortably.
5 | Organize You Bills
And Be Aware
Maybe you’re no stranger to bill deadlines, but how are you currently keeping track of them? By keeping track you will be able to make smart payment instead of just throwing money around.
First, you should conduct your payee to confirm the amount of the bill and try to negotiate a payment plan if possible.
Explain your situation it may help you in the long run.
If you are unable to get the bill reduced you should wait until you have the money, without missing the deadline and paying the bill in full.
It is always a wise choice to avoid dipping into your savings or by adding the bill onto your credit card. So do the best you can to be precise and plan your deadlines so they are due near your payday.
6 | Pay Down Your Debt ASAP
If you can get rid of some of your debts that are consistently eating your monthly income, you will have more money.
Did you know that debt is the number one reason why many people fall behind on their personal finances and end up living paycheck to paycheck?
You are in good company with me as I am still tackling some big chunks of debt.
But the main point is to do everything you possibly can to get rid of the debt.
No doubt you are really serious about ending the cycle of living paycheck to paycheck and sometimes that means having to squeeze and pinch your budget even tighter. Living tighter for a short period of time could mean the difference of getting out of debt sooner rather than later. Which means creating a budget you can live by.
Break The Cycle
The jist is spent less and make more money. Sounds simple and I know you already are aware that is what you need to do.
If only it was that simple, but it actually takes a string of actionable steps to break the cycle of living paycheck to paycheck and hopefully buys flowing the above 6 steps you will be able to do just that and put an end to it.
Do not feel bad about having to tighten the purse strings you are actually among many as 70% of U.S. workers are living paycheck to paycheck.
With some hard work and smart financial maneuvers, along with some sacrifices you will be able to stretch your paycheck farther than you thought you could. And you will come out the other side with better money management skills.
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