Living paycheck to paycheck is the worst. And many times during this time period, you feel hopeless and that there is no end insight. Besides the hopelessness, you also are putting emotional stress on yourself because you are trying to figure out how you’re going to pay your bills and have enough money until the next paycheck.
Everyone has different financial situations and circumstances that may have caused the paycheck to paycheck lifestyle, but everyone has the potential to escape it. Here, I want to share more about fixing your financial health and some steps you can take to stop living for your next payday.
1. Pay yourself first
Start putting a percentage of money into a separate savings account automatically. Keep this away from your main bank account so you are less tempted to access or spend it. Additionally, when you pay yourself first before paying bills, you’re establishing your savings and prioritizing how you spend your paycheck.
2. Start a side hustle that pays immediately
If your paycheck just isn’t cutting it, then you definitely should look into a side hustle. Even if your paycheck is decent, I always recommend another stream of income. When you want to escape living paycheck to paycheck, finding ways to make extra money will be key. Building your career and increasing your salary takes time, so a side hustle that generates income right away is huge.
3. Downsize your lifestyle
As much as you might not want too, escaping paycheck to paycheck requires downsizing your lifestyle. Sometimes it can be more extreme than you would like, but it all depends on your current financial situation.
For instance, your home or apartment is one of the biggest expenses. It might be time to downsize or move to get a more affordable place. I had to move back with mom and dad when I was really struggling.
4. Understand your spending habits
Besides your main living expenses, you’ll need to take an in-depth look into your overall spending habits. You may realize you have a spending problem, which causes you to struggle financially. Not always the case, but regardless you should grasp where your money is going and track your expenses. You might also find ways to cut back significantly that you didn’t think existed until you get all the numbers organized.
5. Limit your credit card usage
If you do have a credit card and use it often, this is the time to limit the usage or not use it at all for awhile. Your credit card debt can crush your finances and eat way your paycheck, so don’t add more to the totals. If you can’t get control of using them, you may need to cut them up and get rid of them altogether for now. But, this way you are not adding more money with increased interest and you can start paying down any debt.
6. Don’t rely on bonuses, tax refunds, or raises
This tip is more of a mindset, but when doing anything with your finances never rely on bonuses, tax refunds, or potential raises. When you work for someone else, there is no guarantee on anything, even if you got something in the past. By removing this dependability, you can better manage your money and spending, so you don’t end up in a bind when that extra cash doesn’t present itself.
7. Ignore what your friends or family have
Trying to keep up a lifestyle so that you can keep up with your friends, family, or colleagues can put you in financial trouble. This is especially true if you are barely getting by already. Now you can start racking up more credit card debt or just frivolously spending for the sake of appearances.