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Living paycheck to paycheck is a cycle where many find themselves in.
But, even if you are struggling thru this pattern, you can still change your story by doing a few changes.
Living Paycheck to paycheck definition – The person in this cycle will be unable to meet financial obligations in case of job loss because the salary is totally devoted to paying expenses.
Living this way can be frightful.
One month you may have everything covered, but the next month your car breaks down, your roof starts leaking or worst you lose your job.
You can stop living this way despite what you may be feeling right now.
It won’t be an easy fix, but with some efforts you can really close this cycle.
So, if you’re looking for ;
- Improving your Financial freedom
- Having Debt free living
- Closing the paycheck to paycheck cycle
You can do that.
Some people remain in this cycle because of unusual circumstances. These can include; a major illness, medical and hospital bills or inability to work. These require special planning.
For others, it boils down to changing your money habits. It sounds scary because we don’t like change and maintaining the status quote is easier.
Who wants to change when there are bills to pay? Yet, your lifestyle has to change if you want to leave the paycheck to paycheck living behind you.
Living paycheck to paycheck statistics. According to a Charles Schwab survey 59% of Americans are living Paycheck to Paycheck.
Some people making a lot of money are also stuck in this cycle.
Another alarming figure is that only 38% of those surveyed have an emergency fund.
Needless to say that this formula, living paycheck to paycheck and having no emergency fund is not a good recipe. It can actually be a recipe for stress and illness in your life.
You work hard and deserve peace of mind with a stress free life.
So, start to change old habits. You don’t have to change all of them. We all have some good money habits and some bad ones. The key is to have more good ones.
Related content for getting out of the paycheck to paycheck cycle
- How to save $1,000 with a basic Saving Challenge
- 7 Places to side hustle to earn extra money
- Free credit report with Credit Sesame
- How to create your own WordPress blog
If you’re looking for ways on getting out of the paycheck to paycheck patterns, here are some tips.
7 practical ways to stop living paycheck to paycheck
1.You are trying to keep up with the Joneses
“The Joneses don’t deserve your attention.” Richie Norton
Keeping up with the Joneses is a saying which means comparing yourself to your neighbors and peers to basically be like them and have the same things.
People who try to keep up with the Joneses are concerned with status, not with financial freedom and independence.
There is nothing wrong with status or buying nice things even expensive ones, if you can afford them.
The problem is that many go into high debts to “afford” to keep up with the Joneses. Be honest with yourself. Own your money story, don’t borrow someone else’s story.
The Joneses also have a secret, they finance their lifestyles and they also may be broke.
So, next time you want to buy the latest Gucci bag ask yourself some questions, honestly.
Do I really need this bag?
Can I use this money elsewhere?
Do I need to go into debt for it?
When you start changing your mindset about money, you’ll refuse to go into debt to buy luxury you can’t afford. Unless, you can pay for it in cash or pay it by the next billing cycle.
Ignore the Joneses and focus on yourself.
2.You don’t prioritize your time
Everything passes, but nothing goes away, except time.
There is only one January 20, 2020, it will never come back. So, at the end of the day, the time is gone, bye bye.
Time is more precious than money. You can get money back, but you can’t get time back – you already know this.
Review how you’re spending your time.
Look at time spent on your social media, television and video watching.
Compare that to how much time you’re spending reading, learning, on self-improvement, on a side gig to make extra money.
Decide what’s worth your time. It will matter for getting out of your paycheck to paycheck cycle.
3.You don’t budget your money or track how it’s spent
“We must consult our means rather than our wishes.”
You’re saying nope. #1 doesn’t apply to me, neither does #2.
So, if you’re not keeping up with the Joneses and you already use your time wisely, what else can you do?
Do you have any idea how you spend your hard earn money? I don’t mean every penny, but the bulk of your money.
If you don’t have a budget and track your money you have no way for setting goals.
To reduce spending you need to know where your money goes and from where you can cut spending. Lay it all out.
Review your spending and cut out most of your short term wants. Sacrificing your short term wants may not be the coolest thing, but you’ll end up being happier in the long run.
As you track your spending, you’ll become aware of things once you thought you needed. However, as you are changing habits you’ll realize they aren’t essentials.
There will be a time when you don’t need to track your speeding anymore. The things that triggered your spending will be gone. You will naturally be conscious how you use your money.
You can save money by going eco friendly. Eco friendly habits, like thrifting will help your budget. See my Pinterest board on conscious living for more ideas.
4.You are not earning enough money
I know you don’t mind me saying it because after all you do want to have extra cash.
You are reading this because you want to stop living paycheck to paycheck, so making extra money is one way to stop it.
There are many ways to make extra cash on the side to help you out. Here are some posts from this blog related to side hustling.
If you are a photographer or like photography, you don’t have to be an expert to make money with a photo blog
5.You’re stuck with high personal debts
“Debt, an ingenious substitute for the chain and whip of the slave driver.” Ambrose Bierce
Thats exactly what debt is. Debt enslaves you.
There is good debt, like a mortgage, it helps you build an asset. There is bad debt, like credit card personal debts.
If you make extra money, it can be used to pay down your high debts.
6.You don’t set goals
Goal setting is a process. It helps create new habits. It makes you write goals down and be accountable. It helps you create your own vision.
There have been studies suggesting that most successful people set goals and write them down.
So, you can process getting out of your paycheck to paycheck cycle, the same way you’ll process any other success.
7.You don’t read
Yeap. In addition to working side gigs to make extra money, you should start reading personal finance books.
If you’re already working hard, reading financial topics will definitely help you to expand.
How else will you learn about financial topics like savings, getting out of debt and investing?
There’s also Personal finance magazines, blogs, podcasts.
Here are some suggestions for personal finance books to dig deeper into the topic.
These books biggest lessons are not about becoming rich or millionaires. The biggest lesson is to teach you to be financially free.
- The Millionaire Next Door
- I will Teach you to be Rich
- The Money Book for the Young, Fabulous and Broke
This 7 steps approach is one path to getting out of your paycheck to paycheck cycle.
There is so much you can do to own your money story. You can have money for saving, for investing and for giving in healthy ways.
But, the thing with the most impact is cultivating new habits. This takes time, determination and a willingness to change. But you can do that.
People who have money left for saving are not “lucky”. They make decisions every day that drive them to achieve their goals. Little by little, these decisions add up and make a big difference.
Be kind to yourself as you try this new path of saying bye bye to living paycheck to paycheck.
You’ll have set backs. Be patient. Take breaks, celebrate your progress, and get back on track.
I’ll love to hear your thoughts on getting out of the paycheck to paycheck cycle. Share a comment.