How to Stop Living Paycheck to Paycheck

It can be stressful to not know how you will pay your next bill. Here are a few ways you can begin to break through this cycle!

Start Budgeting:

Begin by tracking your income and expenses down to the dollar. Knowing when and where your income is coming from and going to can make paying monthly bills a little less stressful. One technique to try is Calendar Budgeting.

Live Below Your Means:

Once you have set a budget, sticking to it is important. Prioritizing essential needs such as housing, groceries, utilities, and transportation will keep you on track toward your savings goals. Items that aren’t considered needs are categorized as Personal Expenses and should be kept to a minimum. Decide how much money you can afford to spend on eating out, buying new clothes, and entertainment, and stick to it. It’s perfectly fine to treat yourself occasionally, just make sure you get back on track by reminding yourself of your end goal.

Increase Income:

It may be easier said than done, however, earning extra money is the most effective way to stop living paycheck to paycheck. However, just because you start to earn more, does not mean you should be spending more.

Here are a few ways to possibly earn more:

• Extra shifts/hours – seek opportunities for overtime or additional hours at your current workplace.
• Gig economy – platforms that offer flexible work such as food delivery or ride sharing.
• Side hustles – Tap into your skills and interests to start a side business, like freelancing, crafting, tutoring, or selling items around the house.

Save the Money:

As your income grows and expenses begin to shrink, commit to saving the surplus. Building an emergency fund may cushion you against unexpected financial hurdles and provide a safety net. This safety net will allow you to maintain your budget even if an emergency like needing new tires pops up. You may even find that once you start budgeting effectively you won’t need to increase your income; all that was needed was to cut a few personal expenses.

Getting out of the paycheck-to-paycheck rut requires effort and discipline, but it is possible. Patience and a commitment to budgeting, avoiding unnecessary spending, increasing income, and prioritizing savings, will help you pave a path toward a better financial future.

This is not intended as tax advice and is for informational purposes only.