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How to Stop Living Paycheck to Paycheck

In this article I am going to talk about the important steps you can take to stop living paycheck to paycheck. Read on to learn how to stop the paycheck to paycheck cycle—for good!

 

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Our Own Story: How We Beat the Paycheck to Paycheck Cycle

I know it can be really difficult to stop living paycheck to paycheck. When my husband and I first got married, we were in some ways like any normal couple financially. We didn’t really know much at all about personal finance, we had around $5,000 in vehicle debt, and we had over $60,000 in other debt before we bought our first home. But pretty soon we realized that this was not the way we wanted to live—we did not want the heavy burden of debt and the gut-wrenching, sleep-defying anxiety and fear that came along with it to be a part of our long-term financial future.

Until we could get unburied from that pile of debt—which honestly at the time I did not know if we would be able to get unburied from because it seemed like such a big mountain compared to the small shovel that was our income—we were in that awful state of living paycheck to paycheck.

But we were able to start paying off that debt—in big chunks of $2,000 or more a month when we initially made less than $4,000 a month, between one full-time job and a part-time job in college—by slashing our expenses, spending very intentionally, and setting a goal and focusing all of our financial energy toward reaching that goal.

And because of the hard financial lessons we learned during that time—and a few others we’ve learned over the years through the school of financial hard knocks—and eventually also seeking to learn all I could about personal finance, once we paid off all of our debt besides our mortgage, we have never gone back to that way of living paycheck to paycheck.

Check out these related posts!

Some Hard Truths about Living Paycheck to Paycheck

According to a recent study by CareerBuilder.com, close to 8 out of 10 workers (78%) in the U.S. live paycheck to paycheck. I feel that there are several factors that likely contribute to this statistic, such as stagnating wages and low financial literacy and continual lifestyle creep—and just having a limitless supply of stuff to spend our money on. And another major factor is simply this: In general, whatever is available in your checking account (and often even that plus some, since people aren’t very diligent about checking their bank balances to know if they’re overspending or they intentionally rely on credit) will get spent.

 

Important Steps for How to Stop Living Paycheck to Paycheck

So in order to end this trend of living paycheck to paycheck you need to put behaviors, tools, and systems (where possible, automated systems) in place to simplify your life as much as possible and to set yourself up for financial success.  And we’re going to discuss the best ways to do exactly that in this article so that you can stop living paycheck to paycheck.

1. Change your mind-set.

Some people believe (mistakenly) that living paycheck to paycheck is just where they will always be. Even though that is, according to the statistics above, what is normal, you definitely don’t have to be—and don’t want to be—normal. You can be way better than that. Because where you are today financially definitely does not have to be where you are 20 years, 10 years, 5 years, or even 1 year from now. In fact, your financial situation can begin to change drastically—to improve drastically—as soon as you decide you’re going to change your spending and saving behaviors. It can start changing drastically today.

2. Get organized.

When you are living paycheck to paycheck, one of the likely culprits is a lack of organization. If you don’t know exactly how much money is coming into your household and, even more, if you don’t know how much you are spending each month, you can’t get ahead financially. In order to reverse this trend, you’re going to need to get organized and get very intentional with how you earn, save, spend, and invest your money.

Let’s pretend that you are the chief financial officer (CFO) of Your Household, Inc. Over the course of your lifetime, if you make the average $50,000+ a year and work the average 40+ years, you will earn well over $2 million. And if you were hired to be CFO of your household, if someone paid you $50,000 a year to manage the finances of Smith Family, Inc. and make it a profitable enterprise, how would you go about doing that? I think you would probably figure out pretty quickly where things stood now, and then you would almost immediately start tracking income and expenses and making financial plans for the future. And that’s what you need to do in order to stop living paycheck to paycheck and start winning with your money for your own family.

3. Know where your money is going.

Once you begin gathering your financial information in order to organize your finances you will start to see where all of your money is going. With online banking, it’s easy to see your expenses when you use a debit card. As you work to get your spending in line with your income, use a debit card as much as possible so you will be able to easily see where all of your money goes. Check out these awesome reward and cash back debit cards here!

If there are areas where you will be tempted to overspend your budget with a debit card (such as eating out, personal spending money, clothing, or entertainment), then use the cash envelope system for those categories, but use a debit card for everything else. (If you have been living paycheck to paycheck, I would recommend that you stop using your credit cards until you are no longer tempted to overspend with them.) Then, at least once a week, review your spending so you’ll know where your money has been going and what holes might need to be plugged.

4. Make a list of all of your debts and your monthly payments and expenses.

As you collect all of your bank statements and credit card statements and other financial documentation, make a list of all of your debts. Also make a list of your other monthly payments (such as utility bills, cell phone bills, insurance premiums, and so) on and other expenses such as food, clothing, entertainment, and so on. This will help you track your spending and create a budget, which are the next steps to take to stop living paycheck to paycheck and start getting ahead and winning with your money.

5. Start tracking your spending to stop living paycheck to paycheck.

Once you have a pretty good idea of your debt and other payments and your monthly expenses, start tracking all of your expenses in order to work toward no longer living paycheck to paycheck. Again, you can do this pretty easily by reviewing your online bank accounts and bills. Track your spending for at least a couple of weeks (though four weeks will give you an even better idea of your spending habits) to get a good picture of your financial situation.

6. Create a realistic but very intentional budget.

A budget, or spending plan, is basically a list of monthly goals for your money. It is where you decide what you want to spend for each area of your finances. When you are living paycheck to paycheck, you might want to estimate a little high for the different budget categories right at the beginning, just to give yourself a little wiggle room. We’ll start working on ways to find more money in your budget during the next step. As you create your first budget and then work to tweak it, don’t shoot for perfection and don’t be too hard on yourself.

It will take a few months for you to get most of the kinks worked out and for you to start really budgeting effectively. But when you do, chances are that you will feel like you got a raise, even before you start adjusting your budget in order to spend less and save more. Find steps for creating your first budget here .

One tool that I love to use to track our finances is Personal Capital. With Personal Capital you can see the activity from all of your banks and credit cards and so on in one place, which is awesome. And you can also link your company 401(k) plan and other brokerage accounts, as well. It’s a great way to get an easy, complete picture of your finances. And it’s free! You can sign up for Personal Capital here.

7. Really distinguish between needs and wants in order to stop living paycheck to paycheck.

When you’re living paycheck to paycheck, you may have blurred (intentionally or unintentionally) the line between needs and wants. An important point to keep in mind is that while you need shelter, you don’t need a fancy four-bedroom, three story, 3,500-square-foot home. And while you may need a mode of transportation to get to and from work, there are lots of options that can help you meet that need, especially in the short term. You don’t necessarily need two cars in your household—you may not even need one. You may be use a bike, walk, or take public transportation.

And while safety is important, you don’t need the newest SUV with all the latest safety features in order to ride in a vehicle with acceptable safety. And while you need food, you don’t actually need all certified organic, cage-free, hormone-free, gluten-free (unless you have Celiac disease or another similar condition), and whole-grain foods all the time. There are lots of ways that you can slash your food budget and still eat healthful foods.

Many things that we say are needs really, truly (when you really get down to it) aren’t needs at all. A smartphone (and even a cell phone) are super convenient, I admit, and I wouldn’t want to live without them for very long, but they don’t sustain life, so unless you use your cell phone as your work phone as well, you don’t actually need a cell phone. The same is true for the internet. Most everyone can go to the library or one of many, many other places that offer free Wi-Fi to do the few things they really need to do on the web. So if you have a high cell phone bill, look into ways to cut your cell phone bill.

And I’ve actually had people say to me that they need cable or satellite because they can’t afford to pay for more expensive entertainment for themselves or their kids (or they say they need it for various other reasons). But the library has many of the movies and shows and programs you can get through these services (and perhaps most of them) for free, and even more than that, entertainment, by definition, is itself not a need. But there are many, many things you can—and should!—do for free to keep yourself and your family entertained. 🙂

When you can shift your frame of mind in this area—about what are really needs and what are simply wants—you’ll be able to let go of ideas and habits that may have shaped your financial decisions for many years and you’ll have the potential to save literally thousands of dollars each year. And from there, you can start building your ne

8. Look for ways to earn more income to stop living paycheck to paycheck.

One of the best ways to stop living paycheck to paycheck is to earn more money. There are more ways than ever to earn additional income, and with the increase of opportunities online, many of these can be done from the comfort of your own home.

And finding ways to earn more income can really change your finances in amazing ways. And that is because even though the most important thing you can do for your money is to stop overspending (or stop the habit of spending till you have nothing left to save or invest), the best way overall to change your financial trajectory is to gain needed knowledge and skills and increase your income. Here are some ideas:

  • Become a professional blogger. I love blogging (even more than my regular job and even more than my freelance editing and writing) because I get to help people every day and I get paid to do something that I would do for free—teach people every day how to win with money! I’ve taught volunteer community personal finance classes before, and I love it, but the reach of a blog is virtually limitless. You can literally help countless numbers of people to change their lives. And blogging is also a perfect job because you can set your own hours and work from anywhere that you want to. And the potential for income growth is amazing. I know bloggers who make over $100,000 a month! You can check out the income reports of some of my favorite bloggers here. Really, in many ways, blogging is a dream job! If you’re interested in learning about starting a profitable blog (or a blog just for fun!), check out my free tutorial!
  • Find work-at-home jobs such as customer service or related jobs. Some companies, such as JetBlue, have some of their employees work from home full-time. To find current job opportunities, check out my favorite job search site, indeed.com.
  • Turn a hobby or something you enjoy into a second job or side hustle. You can find information and ideas for how to start a side hustle here.
  • Do freelance writing or editing. If you have been trained as a writer or editor, then working from home is a great option. I’m a professional editor and I’ve been doing freelance editing and writing for 15 years, and I really enjoy the work because I get to learn a lot of cool things and learn about subjects I probably never would otherwise. If you have an excellent eye for detail, being a professional freelance proofreader might be just the job for you! If you’re interested in this line of work but don’t have any former training as a proofreader, check out this free introductory workshop from Caitlyn at Proofread Anywhere, which I have researched and read great things about. If you want to find freelance opportunities, check out Upwork.
  • Work as an accountant or bookkeeper. If you studied business management or finance or a related field, then this is a natural fit.
  • Be a virtual assistant. This is a relatively new field, and one where you can develop your skills in one (or more) of several different directions. The pay can be great, and you can take on as much or as little work as you would like in order to work the number of hours that fit your current schedule. If you’re interested in making a great income as a virtual assistant, I recommend taking the course 30 Days or Less to Virtual Assistant Success, which has excellent reviews. Another good option is Introduction to Running a VA Business, available through Skillshare. Another great option if you enjoy Pinterest is the course Become a Pinterest VA Today! by Kristin Larsen and Gina Horkey. It will walk you through everything you need to know to be a Pinterest VA. If you love Pinterest, this will likely be a job made in heaven for you!
  • Do freelance consulting or coaching. If you work or worked in a job that lends itself to doing so, becoming a consultant or coach in the same field is an excellent fit and can be very lucrative. Put all of that experience and knowledge you gained to good use.
  • Drive for Uber or Lyft. Another great option for those who have automobiles and enjoy driving and meeting new people is to be a driver for Uber or Lyft. With these companies, like most of the opportunities listed above, you can decide when you are available to work and when you’re not, which offers great flexibility and makes this work ideal for those looking for a part-time extra job.
  • Rent your spare bedroom(s) out on Airbnb or Booking.com. If you have one or more extra bedrooms in your home (or have a second or vacation home), renting them out on Airbnb, Booking.com, and similar sites can be a great way to earn extra income. We’ve been using Airbnb for the last couple of years for virtually all of our travel accommodations (when we’re not camping), and they’re awesome. The hosts have been so great, and we’ve really felt welcomed and at home. And of course the savings can be substantial! Sign up for Airbnb here and receive $40 off your first stay with them! And I just have to include a shameless plug for my angel mother, who has been renting out spare rooms in their beautiful southern Utah home (not an affiliate link :D) for the last couple of years. If you’re in the area to play at Lake Powell or hike in one of the beautiful areas or need a place to stay by one of the national parks nearby, such as the Grand Canyon, look them up!

9. Figure out how to reduce your spending to stop living paycheck to paycheck.

By creating a written budget and really distinguishing between needs and wants, you will find areas where you can begin to really reduce your spending. This is an  important step if you want to stop living paycheck to paycheck.

One way to significantly reduce your spending and see nearly immediate results is to go for a certain amount of time without spending any money on some items. This is sort of a twist on a no-spend challenge, where you simply decide that for one week or one month or six months or one year you’re not going to buy a particular item or do a particular thing that costs money.

Some of the areas where you could drop your spending down to zero at least for a while might include the following:

  • Eating out. The average American family spends about $3,000 a year on eating out. Even though you’ll have to replace some of that cost with the cost of buying food to eat at home, the savings here can be amazing. (To learn how to save money on your grocery shopping, read this article about slashing your grocery spending.) For more than 10 years we’ve spent less than $200 a year on eating out for our family, and I know that that has been part of the reason that we’ve been able to reach other financial goals that we’ve set. Read this article to learn how we save money eating out (when we do eat out).
  • Clothes. It’s likely that you have enough clothes in your dresser and closet to last you for the next six months or year or maybe even longer. So go without buying any for a while. This is another area where the potential savings can be huge. Or even if you simply reduce your spending by buying essential clothing items on sale, from second-hand clothing stores such as your local Goodwill or similar thrift store, or from other budget-friendly clothing stores, you can save a significant amount. Learn how to save money when shopping for clothing.
  • Cable or satellite. There are a lot of free or cheaper alternatives to cable and satellite, so try pulling the plug on these services and banking the savings. With digital TV through a standard antenna, there are many channels available just on your regular TV. If you haven’t checked them out for a long time, you should! And if you can be a little patient, the library also carries many of the programs you regularly watch, for free. But if neither of those options works for you, you can try Netflix, Hulu, Sling, or other similar options.
  • Magazine, newspaper, or online subscriptions. For those you don’t use, and even those you do, cancel them. You can likely find free versions or similar free offerings online.
  • Gym or club memberships. Same here. Especially for those you never or rarely use, cancel them. Even if you do use them regularly, at least look into free or cheaper alternatives. For example, maybe your workplace has a gym and might even offer free fitness training, so why are you paying for a membership and personal trainer somewhere else? (And yet I have coworkers who do just that because they didn’t know that we have free fitness trainers available at our on-site gym.)
  • Auto insurance and registration on an extra or seldom-used vehicle. If you have a third or second vehicle that rarely gets used, you might cancel these services or even sell the vehicle. If you really don’t use the car often, you’ll likely save money by looking to other options such as using a bike (or walking) or using public transportation, using a service like Uber or Lyft, or even renting a vehicle for the few days or week or whatever time period needed for the few times a year when you really do need a second vehicle. Read this article to learn more about how to reduce your transportation expenses.
  • Furniture and appliances. When you’re working to reduce your spending in order to stop living paycheck to paycheck or to get out of debt or reach other financial goals, avoid purchasing furniture or appliances unless something essential breaks that you need to replace. Try repairing it first if you can save money that way, and if you have to replace the item, buy it used from a used appliance store, Craigslist, or your local online classifieds.
  • Electronics and toys. I know that it’s fun to have the newest iThing or the latest video game or motorcycle or ATV or game system, but so is financial security! So is watching your debt go away and your net worth grow! And so is doing one of many, many free things that don’t involve gadgets or toys at all. Even if a toy or electronic device is for your kids, you can refrain. I know for some of us it’s harder saying no to our kids even than saying no to ourselves, but even fairly young children can understand why you can’t buy something if you explain that you’re working toward other important financial goals instead. In fact, I know of instances where parents have explained their financial situation to their kids, and the kids are sometimes the ones to keep the parents in line and remind them not to buy something because it’s not in the budget or because they’re working toward something more important instead!

There are also many other areas where you maybe can’t (or won’t want to) eliminate the expense altogether but you can reduce your spending—in some cases, substantially. Here are some examples:

  • Food. Food is one of the areas where most people can save a lot of money if they choose to because there are so many options involved and because the difference between what is expensive and what is cheap is so drastic sometimes. For example, the local discount store where we buy most of our groceries regularly sells frozen boneless skinless chicken breasts for $1 a pound. And yet you can also easily spend $5 to $10 a pound or more on expensive cuts of meat. The same goes for produce in season versus produce that is not in season. This article shares more than 50 ideas for reducing your food spending.
  • Housing. If you own a home you should look at whether your house is eating too much of your monthly income. In order to meet other important financial goals you should not have more than 25 percent of your after-tax income (and that includes also deducting tithing or charitable giving from your income as well, if you give a substantial amount) tied up in housing so that your budget won’t be too pinched. If you have much more than that of your monthly budget tied up in housing expenses (if, for example, your household income has dropped since you purchased your home because of a reduction in salary or because one earner has left the workforce), then you should look at selling your home if it’s unlikely that your income will increase significantly in the relatively near future. You can take some time to make this shift, but if your house is a financial burden and the situation is unlikely to change relatively soon, then work toward selling your home and either buying or renting something less expensive within the next year or so. Read this article to learn more than 30 ways that you can reduce your housing expenses.
  • Transportation. The best make and model of car to own is the one that doesn’t have any payments. 🙂 Of course for the longer-term you want something that is reasonably safe and reasonably comfortable and that you don’t have to worry too much about breaking down on you, but for the shorter term, if you have car payments on a vehicle and it’s really squeezing your budget and you can’t increase your income soon, and especially if you won’t likely be able to pay off the car in the next 18 to 24 months at the most, I would strongly encourage you to sell the vehicle. And that’s true even if that means selling the car at a little bit of a loss (when you’re upside down on it). You can then take out a small loan for the difference if needed and sell some stuff or working extra or even borrow a little extra money from your credit union or local small bank to be able to buy a $1,000 to $3,000 car that you can get around in for a while till you can save up enough money to buy a more expensive car. But in the meantime, having, say, $3,000 to $5,000 of debt on a personal loan and different car is a better option than keeping a large debt on your current automobile.To learn more about how to save up and buy a vehicle you can afford (with cash!) and for 35 ideas for saving money on transportation expenses, read this article.
  • Utilities. In order to reduce your spending you can lower your thermostat in the winter and turn it up in the summer. For example, many economists recommend setting your thermostat to 62 degrees during the winter and 78 degrees or higher during the summer. You can also look at reducing your water consumption (consider rockscaping or xeriscaping in dry climates, for example) and power consumption and so forth. Read this article to find more ways to reduce your utility bill.
  • Pet food and related items. There’s no denying that people can spend a lot of money (a ridiculous amount of money, really) on their pets. But being a pet owner doesn’t have to cost very much money. Beyond basic food (which in our area you can get for even a large dog for $40 a month or less and for a cat for less than $30 a month) and cat litter (less than $10 a bag) and the like, you really don’t have to spend much money on your pets. What the really want is your love and attention.
  • Cell phones. You can save money on your cell phone or smartphone by not paying for features and services you don’t use. And if you really need or want to cut your monthly expenses, trade your smartphone for a cheaper smartphone service (such as Republic Wireless, Mint Mobile, or Xfinity Mobile) or for a basic cell phone. We are currently using Xfinity Mobile, and we love our super cheap smartphone bill (just $3.50 a line per month!). Or trade your cell phone service for a very cheap pay-as-you-go cell phone service such as TracFone or even a super cheap internet home phone service such as ObiTalk. Check out this article to learn about ways you can slash your cell phone bill!
  • Internet. If you’re paying more than $40 a month, you can likely lower your internet bill. Even though you might not get super high-speed internet for that price (at least, not without bundling with other services you don’t need), and even though super high-speed internet is really convenient (so I’ve heard—we’ve actually never had it!), so is money in your wallet.
    *UPDATE*: As of September 2018, we’ve signed up for Xfinity high-speed internet. Right now we’re paying an introductory price of $40 per month for the first year, and then we’ll work to negotiate a price lower than the $65 a month it will go to otherwise after that. But $65 a month is actually an OK price, if we can’t negotiate it down from that—especially considering the fact that with Xfinity Mobile we now pay as little as $3.50 a month for our smartphone plans! If you’re paying more than $30 a month for high-speed internet and if you want to look at less expensive smartphone plans, you should check out Xfinity! Use this referral code to save up to $100 when you sign up for service: 1RQ4SP
  • Alarm monitoring. For a low-cost, no-contract alarm monitoring service that doesn’t require a home phone service and that has great customer service and great reviews, I highly recommend SimpliSafe. We’ve been using them for almost eight years now, and we pay just $14.99 a month total, including taxes.
  • Car maintenance and repairs. To save money on car repairs, shop around among the mechanics in your area. Do this before you need the work done so you won’t be in a bind and needing the work done right away when something goes wrong. Look into Craigslist and your local classifieds. We’ve saved a lot of money and had good experiences (fortunately, no bad experiences so far) by going with independent mechanics who do auto repair work on the side. And for minor repairs and part replacements, if you are a little bit mechanically inclined, or have a family member or friend who is, try looking up how to do the repair on YouTube and doing it yourself. And look at buying your parts from RockAuto. We learned about them from one of the independent mechanics we’ve used, and they are so much cheaper than even the big-box auto parts stores—like, often 50 percent cheaper or more. So check them out. I give them two thumbs way up!
  • Gift giving. If your budget is really tight, explain to your friends and family that you’re going to have to postpone spending money on gift giving for a time. If you do it with the right spirit, and if they’re truly your friends or if your family relationship is a healthy one, they’ll understand and they won’t worry about it. Your participation in the special event (wedding, birthday party, or the like), not a gift, is what truly shows your love and support.
  • Personal spending money. While you’re working to build more room in your budget (by decreasing your expenses and increasing your income), you might want to significantly reduce or even cut for a time your personal spending money (your fun money).

10. Do a no-spend challenge.

To really help you start to shift your saving and spending habits, do a no-spend challenge for a week, two weeks, or a month. This means that you buy only essential food and any other truly essential items during that time. Not only does this help you figure out ways you can reduce your spending and help you use up food in your freezer and pantry that you might need to use anyway, but it also helps to reset your mind-set and helps you recognize that you really don’t need to buy stuff every day/other day/week. Learn more about how to do a no-spend challenge.

11. Focus on your essential bills.

If you don’t have enough money to pay all of your bills after you have created a no-frills budget and worked even further to reduce your spending by following some of the suggestions listed above, then create a prioritized spending plan. (Fill out the information below and I will send you one!) With a prioritized budget or spending plan, you list your expenses from most important to least important, and you pay your bills until the money runs out. This means that you pay for food, transportation, housing, utilities, and necessary clothing items before paying for anything else.

Then you work your way down the list of your other expenses, from most important to least important, and wherever the money runs out, the people below that line don’t get paid right then or maybe don’t get paid even that month.

In this situation, where you really can’t pay all of your bills despite your best efforts, you let the bills slide that you can’t pay in order to stop going further into debt. Then you come back and work on paying them when you have increased your income or further reduced your spending or when they’re willing to negotiate.

12. Cut up your credit cards in order to stop living paycheck to paycheck.

If you don’t pay off your credit card bill every month without fail, then you should look at cutting up your credit card. The rewards that you might be getting in exchange for having the credit card just aren’t worth the finance charges you are paying. Not to mention the fact that if you have credit cards you are likely spending more than you would if you used cash for purchases instead (because we feel it more when we pay for items with cash because it feels more real), and you’re likely even spending significantly more than you would be spending if you used a debit card.

13. Start paying off debt to stop living paycheck to paycheck.

Once you have extra money in your budget from reducing your expenses and increasing your income, start really working on paying off your debt. In order to accelerate your debt payoff plan, you can use either the debt avalanche method or the debt snowball method.  You will save some money on interest if you use the avalanche method, but for most people, I would recommend the snowball method, or else a combination of the two, where you begin with the snowball method and then switch to the avalanche method once your commitment level to getting out of debt is rock solid.

The snowball method is the one we used, and I feel that it works best in most cases because it keeps your motivation high because you have more frequent debt payoff wins. Read this article to learn more about how to get (and stay) out of debt.

14. Build an emergency fund in order to stop living paycheck to paycheck.

As you are working to reverse your financial situation, begin to build a small emergency fund. I recommend building up a starter emergency fund of at least $1,000 as quickly as possible by taking on extra work, selling stuff around the house, reducing your spending on things like food and entertainment, or (ideally) all of the above.

At first you may feel like you can put only $50 or $100 a month toward your emergency fund, but increase this as quickly as you can. Try to have $1,000 (or $500 if you make a household income of less than $20,000 a year) saved within a couple of months. If you feel more comfortable with a little more of a safety net, then you can increase that to up to one month’s worth of expenses. And then save a fully funded emergency fund once you are out of consumer debt. Learn here how to build a three- to six-month emergency fund.

15. Build up a buffer of $1,000 or up to one month’s worth of expenses to help you stop living paycheck to paycheck.

Once you have your fully funded emergency fund, work to build a buffer in your checking account of at least $1,000 (or up to as much as one month’s worth of expenses) so that you won’t overdraw your account if you have an unexpected expense or forget about a scheduled payment. But when you do, treat that number ($1,000 or $3,000 or whatever it is) as your $0. (It’s not your “Oh, I really feel like going out to eat even though it’s not in the budget” fund. :))

We have been doing this for several years now, and I have to admit that it has saved us from overdrawing on our account a few times when I forgot to transfer money over from a linked savings account for an irregular expense (like our annual life insurance premium).

16. Learn the amazing power of contentment.

Perhaps the most important factor in being able to stop living paycheck to paycheck—and that’s the reason that I saved this item for last—is to learn to be content with what you have. That certainly does not mean that you give up your dreams or worthwhile ambitions. But what it does mean is that you get off the hedonic treadmill of trying to find happiness by always seeking to have better and nicer and more stuff and services.

Because the reality is that happiness doesn’t come from all the stuff we have and the services we use, but rather comes from things that provide true, lasting joy such as building strong relationships with family and friends, knowing your own intrinsic value and self-worth, continually seeking to learn and improve, being able to be proud of your accomplishments through hard work and integrity, trusting in a higher power, and more. Read more about how to be truly content.

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Some people believe (mistakenly) that living paycheck to paycheck is just where they will always be. Even though that is, according to the statistics above, what is normal, you definitely don’t have to be—and don’t want to be—normal. You can be way better than that, and I want to teach you how. Join our new, closed Families for Financial Freedom Facebook group to find a supportive community of people to help you succeed with reaching your financial goals (and to maybe even give you a gentle kick in the pants if you need it)!

Conclusion

I know that it’s really easy to get in a situation where you’re living paycheck to paycheck. And it may take some time to work your way out of that situation. But if you follow the steps listed above, you can definitely do it! And I want to help you every step of the way! Even if it is what the majority of people in the U.S. do, living paycheck to paycheck isn’t a good plan because it will never allow you true financial peace, nor will it allow you to build financial stability and wealth.

When you make the decision to stop living paycheck to paycheck and then you start working toward and then accomplishing that goal, your whole world will change. And your life will be so much happier and more peaceful because of it. I promise!

 

Have you tried any of these tips? Leave a comment below and let me know how they have helped you get out of the cycle of living paycheck to paycheck! What are your best tips on how to stop living paycheck to paycheck? Share your thoughts below! I would love to hear your ideas!

 

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help a family member or friend or people in general? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being with others. Thank you!

Join Our New Facebook Group!

Join our new, closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.