Have you ever wondered how to stop living paycheck to paycheck? Sure, it does seem like there’s nothing inherently wrong with it, especially if you’re able to pay off all your bills and afford the basic necessities, perhaps even a little comfort, every time you get your salary for the month. Besides, it seems to be normal for a lot of people to be living like this, right?
But what if your salary gets delayed due to some unforeseen circumstances? What if you got sick and needed to visit the hospital? What if your plumbing suddenly leaked? What if something in your house broke? What if …
Living paycheck to paycheck can push you to the edge; with just one little mishap and you’re going to fall. Hard.
Table of Contents
How to Stop Living Paycheck to Paycheck: Set Goals
Nothing keeps you motivated like having a goal to work for. It can be whatever you deem important. It can be something as simple as treating yourself and your loved one to a spa or making a large down payment for a car or house purchase. Set a target amount and assign yourself a deadline for completing it.
You may feel more assured today if you know that you are making progress toward the future.
How to Stop Living Paycheck to Paycheck: Create a Budget
It’s easy to completely miss where your salary went if you don’t have a budget. You see several bills in your wallet or some considerable amount on your online account at one point, and the next thing you know there’s not even a single bill to count or money to check virtually.
How much exactly went to food, utilities, and other payables?
You’ll discover spending patterns in your budget that you were previously unaware of. When you make a budget, you will be able to make the necessary adjustments to achieve your goals, both short term and long term.
Budgeting is the cornerstone of effective money management and a sure way to stop from living paycheck to paycheck.
How to Stop Living Paycheck to Paycheck: Prioritize
You will first write down your income when creating your budget, after which you will begin deducting your expenses. In doing so, it is essential to pinpoint the costs you have to deal with which usually are for basic necessities, such as food, utilities, housing, and transportation.
These essentials are priorities you have to make sure you take care of before anything else. Make a note of other stuff you have to pay and settle it after you’ve taken care of your priorities.
How to Stop Living Paycheck to Paycheck: Establish a So-Called Emergency Fund
What you need is a $1,000 emergency fund for starters. If you’re struggling to make ends meet right now, you might be wondering why you even need to save and how. Nevertheless, you will feel such peace of mind knowing that there is this barrier between you and life. It will definitely save your ass and give you some cushion as you sort things out, if you ever get hit by life-happened-moments.
Life does happen, and sometimes, it will shove you to the edge when you least expect it. It can be difficult to save anything for potential future expenses when you’re scrambling to pay for what’s happening right now. If you don’t, though, the unforeseen—a job loss, an accident, or a medical emergency—could put you in an even worse financial situation.
You just need to make a few modest but deliberate daily, weekly, and even monthly changes to be able to save up $1,000. And note that you’re only just starting. The goal of an emergency fund is to have enough money in it and be able to pay between three and six months’ worth of your expenses. The idea is that, should anything occur that prevents you from working, your emergency fund should be adequate to pay for your daily costs for at least a half year.
Remember insurance as well as you’re considering emergencies. In addition to vehicle, homeowners or renters, and perhaps disability insurance, health insurance is a necessity. Insurance does have a cost, but by shielding you from financial misfortune, it can actually help you save money. Get the appropriate coverage by looking into what each provider can offer.
How to Stop Living Paycheck to Paycheck: Have a Savings Account
Yes, you already have an emergency fund. But do note that that’s different from the savings you must have on a separate account.
When you hardly receive sufficient money to cover normal expenditures, setting away money from your paycheck into a savings account might be very difficult. But mindset is actually what makes the difference. You may accumulate a sizeable sum of money in your savings account in just a few months if you approach saving as an obligation that you must fill no matter what.
Saving 20% of your net income is a decent general rule of thumb. This money could be invested to increase returns, although it would be better to have a separate six months’ worth of your salary saved up at any given moment. Most financial experts would consider your finances healthy, and only then can you truly say that you’ve stopped living paycheck to paycheck.
How to Stop Living Paycheck to Paycheck: Breakaway from Debts
Debt of any kind prevents you from moving forward. You are forced to pay off your winter holiday expenses from the previous year even when it’s already scorching hot outside. That won’t help you advance. It’s an ongoing cycle, a dangerous pit. Get out of it.
Plus debt is becoming more cunning by the day. Installment payment businesses are growing in popularity these days, say, when you check out, they entice you by telling you that you can pay for that espresso machine in installments of up to six months. You really wouldn’t want to spend six months’ worth of money on your expensive coffee maker.
One of the main things keeping you in the loop of living paycheck to paycheck is having debt in your life.
So refrain from acquiring any new debt of any form. Stop using your credit card to make purchases. Don’t even think about taking out a loan for something you want but don’t even need. Stop falling for tricky marketing strategies and baits that will end up driving you to paying more instead of saving.
Pay off your existing debts one by one so that they won’t snowball. When the debt is paid off, you’ll get that much extra back. That’s a sure-fire way to progress.
How to Stop Living Paycheck to Paycheck: Sell Old, Unused Things
Time to generate additional revenue at this point. Selling whatever you can is one of the most straightforward approaches to obtain some more income. Perhaps that includes your jewels, clothes, old stuff, or even the spare automobile you have in your garage.
You should definitely do so if you can part with it in exchange for money. You’ll provide your bank account or budget with some extra cushion, which is enormously beneficial when you’re living paycheck to paycheck and want to ditch such lifestyle.
How to Stop Living Paycheck to Paycheck: Start a Side Hustle
You may need a constant source of additional income if you’ve established a budget and sold certain items but are still struggling to make ends meet. Try to find a second job or a side business.
Being a barista, driving for Uber or Lyft, working in a contact center, waiting tables, or applying to be a substitute teacher are all excellent ways to earn additional money. Numerous occupations that you can accomplish from home after work or on the weekends are also available.
It will be challenging, yes. This, however, is just a temporary. You can resume slowing down if you have some money in savings and have paid off some debt. But if it’s something you end up actually enjoying and able to juggle, the great for you. You now have an added revenue stream.
How to Stop Living Paycheck to Paycheck: Spend Less
Making more money won’t help you if you keep spending it all, so don’t skip over this crucial point. Avoid working a side job while maintaining an unaffordable lifestyle. A raise in wages may, if you’re not careful, lead to increased spending.
Actually, there’s a name for this phenomenon. It’s known as lifestyle inflation or lifestyle creep, wherein as you now have more money to spend on things you previously couldn’t, you might start letting your financial restraints slip a bit.
When you earn more money, it can be tempting to spend more of it, but resist the urge to do so. Do not forget the initial motivation behind taking on the additional work. Maintain your focus, be deliberate, and adhere to your spending plan.
How to Stop Living Paycheck to Paycheck: Say No to Luxury You Can Afford But Don’t Need
This is not the time to go on a luxurious vacation, spend a ridiculous amount to pay for gifts, or go to your favorite Michelin restaurant if you’re living paycheck to paycheck. You should definitely trim your spending right now. Find any area of your budget where you may save costs.
Cut the cable service you’re not even using. You don’t have to change your phone every time a new model is released (they function the same way anyways). Instead of spending money on entertainment, visit the library and the park, or go to free museums and local shows. Stop dining out.
We are aware that making such compromises can be challenging and doesn’t feel pleasant. But keep in mind that it won’t last forever since you are merely sacrificing for the short term. It’s time to work hard right now so that you can have a brighter future.
How to Stop Living Paycheck to Paycheck: Save for Future Purchases
If you’ve recently spent a lot of money on a major purchase, nothing makes you want to count down the hours till the next payday. Decide to save up and pay cash if you can if you can see something approaching, like when the tread on your tires starts to get really worn down. This prevents you from blowing your entire budget for the month and allows you to save a small amount each month.
In addition, you shouldn’t make large non-essential expenditures when you’re living paycheck to paycheck. Consider the items you know you desire (but don’t actually need), such as that new pc console. It’s just not a practical move, buddy.
How to Stop Living Paycheck to Paycheck: Plan Your Meals
Of course you need to eat since it is one of your basic necessities (and therefore priorities). It is, however, a budget item that, if you aren’t attentive, can spiral out of control.
Because you’ll know what’s for supper at home when you use a meal plan, you’ll be better able to resist the temptations of the drive-through. Additionally, when you know exactly what you need to buy for the week, your grocery bill will be lower. There will be no more haphazard impulse buys or massive amounts of fresh vegetables purchased mindlessly that end up rotting in the garbage bin.
You’ll waste less and spend less, which clears room in the budget and aids in your progress.
How to Stop Living Paycheck to Paycheck: Cut Money Access
When you have a lot of booze in your cabinets, it’s simple to drink too much of it. The key is to keep it out of the house. The same rule applies to money. The issue is, accessing money nowadays is simpler than ever.
We can now pay with our phones, withdraw cash from ATMs without using our cards, and buy new stuff while driving home from work. In order to make it more difficult to spend money, revoke the credit card or uninstall your online banking app until you have a major and necessary reason to install it back. Also, unlink your cards from shopping apps.
You will be less tempted to spend money if it is more difficult to do so.
How to Stop Living Paycheck to Paycheck: Keep Your Motivations in Mind
It may seem as though your financial situation is a revolving door if you live paycheck to paycheck. You keep going around in circles with no end in sight.
You start all these suggestions and get your ass moving as soon as you realize you don’t want to keep going through the same loop every month. It may move slowly. It may be difficult. You might feel like giving up on some days, but don’t you even think about it.
Keep your motivations in mind when things get challenging. If it helps, consider the major objectives you’re working toward in the future, such as chilling all day during retirement, covering your children’s educational expenses, or acquiring that cliffside home.
Think about a life without overdraft fees or the anxiety of learning your card has been refused.
Keep your reasons in mind when you hesitate to click add to basket even though you truly want the new gadget. When making your own meals instead of eating out, also keep your motivation in mind.
How to Stop Living Paycheck to Paycheck: Be Patient
It’s frustrating to struggle with money, so it will be best to learn how to stop living paycheck to paycheck. Start by making modest, constructive changes. Consider the money you don’t spend as paying yourself; instead, save it. Put your funds to use by investing as it all mounts up, which it inevitably will. You can accomplish all of this, but it will require time and effort. (Just keep swimming, even Dory says.)
If you want to learn more about investments, you can read our articles such as best investment options for Australian expats in 2021, what are the best investment options for Canadian expats in 2021, what are the best investment options for UK expats in 2022, and how to invest in the S&P 500 from outside America.
We also have reviews of Investors Trust Access Portfolio, Novia Global, Dominion Capital Strategies Guernsey, Custodian Life, St James Place fund, Evelyn Partners, Sarwa Dubai, HSBC Expat, Ardan International, and Investors Trust S&P 500 Review.
How to Stop Living Paycheck to Paycheck: Final Thoughts
Every transaction, from a trip to the grocery store to a visit to the doctor, has some hint of underlying anxieties. Without a clear conclusion in sight, it’s simple to feel exhausted or stuck and unable to advance your professional or financial situation.
Persistence and planning are required to end the pattern of living paycheck to paycheck. Even when it seems like you’ve tried everything, there are ways to change how much you spend, save, and how you get your money.
Once you recognize the issue, solving it becomes lot simpler. Over time, little, persistent improvements to one’s lifestyle and finances do make an impact.
You need to budget, a dollar at a time, month after month. How to stop living paycheck to paycheck is a conscious effort and a commitment.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 584.6 million answers views on Quora.com and a widely sold book on Amazon and a contributor on Forbes.
