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~How to Stop Living Paycheck to Paycheck~
Are you living paycheck to paycheck and struggle to make ends meet every week? You get your paycheck, pay some bills, buy groceries and then the money is gone until the next payday. Then you do it all over again and again. You know as well as I do that this is no way to live your life.
Living this way is very stressful and one little unexpected expense could truly turn your finances upside down and send you even further in debt. But there is hope, there are things you can do to turn this around. With a bit of hard work and a change in your attitude towards money, you can break free of this vicious cycle.
Here are some tips you can start doing today to break free of living paycheck to paycheck once and for all.
Change Your Attitude
If you want to change your finances, it means you need to change your whole attitude about money. Money should not be ruling your life, you should be in charge of your money. You need to take a hard look at how you treat the way your handle you money.
When I was living paycheck to paycheck, my attitude about money was horrible. I would think to myself, “it’s only five bucks a week, it’s not going to make a difference.” And “man, our cable bill just went up another $20 a month but there isn’t anything we can do about it anyway”.
Does this sound familiar? I bet it does! The truth is all those five bucks adds up over time!! And, yes you can do something about rising cost of your cable bill. You can shop around for a better rate, you can give up some of the costly cable packages you are paying extra for. You could even get rid of cable altogether and opt for less costly options such as getting a digital TV antenna or a roku TV streaming player.
The total yearly amount of money wasted in just these two little examples costs $500 a year. Now imagine if you applied this to all aspects of your finances, it’ll add up to a whole lot of extra money!!
Create a Budget You Can Live With
I know, most people hate to think about creating or sticking to a budget. The thing is, you need a budget to keep track of where your money is going and to stay on track with your finances, there is just no getting around it.
The reason so many people fail at budgeting their money is because they create such an unrealistic budget that they are doomed to fail right from the start and give up.
The key to creating a budget and sticking to it is to make one that will give you some wiggle room. This way you won’t throw your hands in the air and give up after a few weeks.
Your budget is a work in progress, especially when you first start out. So if you see that certain areas are just not working for you then you should make some changes and tweak it until you find what works best for you.
Here are some posts that will help you save more money to help balance your budget.
Build an Emergency Savings
Having an emergency fund is critical. As you know, if you are living paycheck to paycheck, one or two unexpected expenses could throw your finances into a downward tailspin.
You could end up creating more debt that you don’t need or having to skip paying a bill or two to pay for these expenses. This will end up wasting more money when you get hit with excessive late fee charges and interest rate hikes.
You need to make sure you add contributing to an emergency fund into your budget. If you can contribute at least $20 a week, you will have over $1000 saved in one year. One of the easiest ways I have found to contribute to my emergency fund is through Acorns.
Acorns is a website/app that automatically saves your “change” when you use your debit cards for purchases. So let’s say you make a purchase totaling $7.45, Acorns will round-up your purchase and set aside .55 cents and deposit it into your account, which makes it super simple to save without even thinking about it. You can learn more about Acorns here.
Get Rid of Your Debt
If you have debt then you need to get rid of it. This is the reason you have to live paycheck to paycheck. You are wasting your money by paying high interest on purchases you make that don’t get paid off right away. It’s like taking your money and burning it.
Get rid of your debt as fast as you can. You need to make sure that any spare income in your budget goes towards your debt. Make an action plan to get your debt paid off and stick to it!! Two of the most common methods of paying off debt are the “Debt Stacking” method and the “Snowball Debt” method.
The Debt Stacking method is done by attacking the debt with the highest interest first. Once that is paid you stack that amount to the minimum payment you are making on the next highest interest debt and so on until you’re debt free.
The Debt Snowball method is where you attack the debt with the lowest balance first. Once that is paid, you stack that amount to the minimum payment you are making on the next lowest balance debt and so on.
Personally, I prefer the Snowball Debt method made famous by my favorite personal finance guru Dave Ramsey ; although the Debt Stacking method will save you some money on interest in the long run, you see results faster with the Snowball Debt method. Just seeing the results of having one debt paid off is so encouraging and will help to keep you going towards your debt free goal.
Read How Being Debt Free Will Change Your Life to get a glimpse into your future once you’re debt free.
Earn More Money
If you are having a hard time to balance your budget or don’t have any room in your budget to save or pay down your debt, then you should consider taking on a side hustle to earn more money.
There are many things you can do in your spare time to earn some extra money, even if you don’t have a lot of time to spare. Every little bit that you can do now will help you on your mission to stop living from paycheck to paycheck.
Here are a few posts that could help you earn some extra money to contribute to your savings.
How to Start a Blog – Blogging can be a great side hustle and could even eventually turn into a full-time business.
How to Make Money Completing Surveys – Competing surveys can be a great way to make some extra money when you don’t have a lot of spare time.
Cash in on Clutter – Selling stuff that you don’t need is a great way to earn some quick cash to throw at your debt or in your emergency fund.
15 Money Earning Ideas – This is a great list of different types of side gigs you can do based on your skills
Breaking the cycle of living from paycheck to paycheck is not going to be easy at first. Trust me when I say that it will get easier as time goes on and it’ll all be worth it in the end. Don’t give up, there is so much more to life than worrying about paying the bills.
Please leave a comment if you have tips or want to share your journey with us.
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