How to Break the Cycle of Living Paycheck to Paycheck

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Budgeting doesn’t always come naturally, and even if you know how to budget, it’s hard to put the concept into practice. If you find yourself living hand-to-mouth or paycheck-to-paycheck, it can be an extremely difficult pattern to extricate yourself from. Sometimes, there may be a month or two where you get a surprise expense, and suddenly, you’re panicking about how you’re going to pay for it. 

Properly preparing for emergency scenarios or simply having some long-term savings goals is essential to your financial success and giving yourself peace-of-mind. Below, we’ve outlined how to take control of your finances and break the pattern of desperately waiting for your next paycheck.

Why you shouldn’t live paycheck to paycheck

Maybe you don’t understand why it’s important to build a financial cushion into your budget because you feel like you’re doing just fine living paycheck to paycheck. Well, even if you’re doing okay financially at the moment, that doesn’t mean that will always be the case. There’s always the potential risk for a situation to pop up in the future you’ll have to handle and be unprepared for. 

Here are some situations where your irresponsible financial habits may come back to haunt you:

1. You lose your job.

Perhaps you work in a startup environment, and the market takes a turn for the worse. You’re a recent hire, so you get the ax first. When you don’t have a robust savings account to keep you afloat, you need to immediately find a replacement job instead of having breathing room to find a role that truly reflects your professional desires. 

2. Your car needs a major repair.

You take your car for granted most days until the day it doesn’t work as it should. If you have to suddenly put down money to make repairs, you might rely on your credit card to make the payment. But using your credit card to fund the repair means you risk putting yourself into serious debt since you have no extra cushion to put toward making a bigger credit card payment.

3. You live in the short-term.

Waiting for your next paycheck puts you in a short-term mindset. Want to go on vacation? Need a new car? These long-term savings goals are mostly out of reach if you can barely fund your current lifestyle.

How to stop the paycheck-to-paycheck living cycle 

If you’re tired of feeling panicked at the end of each month, there are some ways to start building a better financial future for you and your family. Below, we’ve gathered some easy money tips you can start putting into practice today! It might take a few months to get the hang of living more frugally, but soon, it’ll feel second nature. 

1. Trim Your Expenses

The first step to creating a realistic budget for yourself is cutting back on how much you’re spending. Reduce your cell phone data or get rid of your cable if you find yourself using Netflix more than anything else. 

Take a look at all of your subscriptions. Do you go to the gym enough to justify a monthly membership? Can you take up running or biking to work instead? 

2. Track Your Spending

Maybe you don’t feel like you’re spending that much. Well, if you can start tracking your expenses, you might be surprised how all those trips to the local coffee shop and lunches add up. Pay attention to where your money is going; you might be in for an unpleasant surprise about your financial habits. But it’s an inconvenient truth you can use to motivate you to save more.

There are plenty of apps that allow you to see your income versus spending. Using apps or online tools are great ways to hold yourself accountable and can serve as a wake-up call for limiting your expenses.

3. Cap Your Discretionary Spending

Besides food, rent, and other basic necessities, there’s not a lot you need in your day-to-day life. Once you figure out your typical spending, create actionable goals limiting your expenses. Set a cap each month that you stick to. 

This monthly cap might need to change month to month to take into consideration special events and occasions like the holidays. However, do your best to budget for bigger spending months by cutting back in the weeks and months leading up to those periods.

How to Break the Cycle of Living Paycheck to Paycheck Infographic

4. Keep Shopping to a Minimum

If you have a tendency to socialize and shop, it’s smart to avoid this as a friendship activity for a while. While shopping is a fun activity, it is incredibly easy to overspend. After all, your friends can be serious enablers for activities and behaviors you’re trying to avoid, like spending money on products or services you don’t need.

5. Pay Your Bills in a Timely Manner

As bills come in, pay them immediately rather than waiting until the last minute or forgetting about them altogether. Otherwise, you could be putting yourself at risk of paying late fees. Once you have more financial stability, you may want to consider automating your credit card bill payments, so you’re never on the hook for late fees ever again. 

6. Don’t Carry Around All of Your Credit Cards

Using credit cards without thinking is easy. Not sure how much money is in your debit card? Swipe your credit card. Don’t have enough in your savings to pay for an emergency? Pay with your credit card. You get the idea. 

You should only be carrying one credit card with you, and it should either be used for emergencies, or for specific spending

Pro Tip: Avoid signing up for new credit cards while you’re recovering from financial missteps. Not only does a new credit card involve a hard pull on your credit history, which can ding your store, they can also often lead you to overspend. 

For example, many credit card issuers hook buyers with intro bonus offers that require hitting a spending target within the first three months or year of activation. These kinds of offers pose a danger to your financial wellness if you’re tempted into spending more than your usual amount. 

7. Get an Accountability Buddy

Living within your means and using a budget can be hard if you’re going it alone. To make your financial goals feel less overwhelming, consider pairing up with a spouse or friend to create and stick to saving goals together. Maybe you can make a joint goal like saving up enough to take a weekend trip somewhere. 

Or, perhaps you can make your frugal lifestyle more fun by sharing tips on saving money and throwing potluck style dinners instead of going out to eat. It’s much more engaging and fun to save money when you’re not doing it alone.

Takeaways: Embrace financial freedom with these tips

When you’re overwhelmed by your expenses and living paycheck-to-paycheck, it can be incredibly difficult to see the light at the end of the tunnel. However, by utilizing smart money tips like the ones found in this article, you can regain financial freedom. Start small by cutting your expenses, work toward creating emergency savings, and then enjoy your new, less stressful financial life.

Author Bio:
Samantha Rupp holds a Bachelor of Science in Business Administration. She is the managing editor for as well as a marketing expert for Community Tax. She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.

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