8 Easy Ways to Stop Living Paycheck to Paycheck
If you are tired of living paycheck to paycheck, here are ways to change that.
Living paycheck to paycheck is an expression used to describe what happens when a person spends all his money from one paycheck and will have to wait until the next one to get more money to pay bills he couldn't pay from the previous paycheck. There is never enough money to pay all bills and there is never enough money left over for emergencies. Needless to say, some bills don't get paid every month. In other words, "The money runs out before the month runs out."
According to Forbes, eight out of 10 workers live paycheck to paycheck. That's 78% of workers. The number includes some whose paycheck is six figures or more. Some workers making $100,000 or more say they live paycheck to paycheck. That proves it is not how much a person makes. Rather, it is what he does with it.
Breaking the paycheck-to-paycheck cycle is easy to do when a person makes a plan and sticks to it.
1. Know How Much Money Is Coming In
In order to avoid living paycheck to paycheck, know how much money you have coming in and how much you need to go out for household bills. Once you see on paper what you have to work with, you will be less likely to overspend on things you don't need.
Save your raises and any extra money that comes in such as an income tax refund. If you receive money for your birthday or on other occasions, also count that as money coming in.
2. Track Your Money
Track your spending by paying attention to the amount of money that is going out as well as what is coming in. In order to track your money, you should take an inventory of your spending habits. Most families' major expenses are set such as mortgage or rent, insurance, and public utilities. What is left over can be adjusted.
When you evaluate your spending habits, you will more than likely find some areas where you don't need to spend. There is a long list of things you can downsize or cut out without missing them. You can cut down on your cable bill by eliminating channels you don't even watch. Eliminate some features on your smartphone. Never pay for another newspaper or magazine because you can read them online. Cut out gym and other memberships that you can do without.
3. Stop Trying to Keep Up With the Joneses
Stop trying to buy everything the Joneses buy. Your financial situation might not be the same as theirs. Besides, you don't know if they are also living paycheck to paycheck. You will always be behind financially unless you stop trying to keep up with others. Don't lock yourself into a lifestyle like your family members, friends, or neighbors. Instead, march to the beat of your own drum.
4. Set Goals for Your Spending
You will be amazed at how much you will save if you set realistic goals. No matter how much money you have coming into your household, you should set a goal for how it is to be spent. People think they must have a large amount of money to set financial goals. No matter how little money you have, you should set goals for how it is to be spent.
5. Learn to Live With Less
Begin to cut back and live on less than you earn. It is a surprising amount of money that is spent when it could have been much less. Downsize in areas where you can. For instance, a coffee drinker doesn't have to give up Starbucks altogether, but he could limit the number of times he goes each week. He could make his coffee at home and save money.
Downsizing might mean moving to a less expensive neighborhood or getting a car that doesn't require a large car payment, car insurance, and much maintenance.
6. Limit Times To Eat Out
One of the most costly activities that can be minimized is eating out. It costs a lot for a family to eat out often and to order takeouts. It costs much less to cook and eat at home.
Families can reserve eating out for special occasions instead of eating out several times a week. They can be creative and let each family member choose what to eat on certain days. Older children could help prepare meals. Not only will the family save money, but members of the family will bond during those cooking experiences.
7. Shop at Dollar Stores
Shopping at dollar stores will help families save money. There are some generic items that don't measure up, but most of them do. Some of the items are the same as brand names in different packaging. Dollar stores are great for purchasing party supplies, cleaning items, paper products, greeting cards, and many other items.
8. Get a Part-Time Job
A lot of people have a side hustle to avoid having to live paycheck to paycheck. They choose hours that are good for them and their families while bringing in extra cash to supplement their regular paycheck. Many people work more than one job even if it is only on a temporary basis.
Use your talent to earn extra money. That's what I do here on Vocal. I write and share what's on my mind and get paid for doing so. I am thrilled to be able to put words together and share them with the world. You can do the same!