If you’re consistently running out of money before your next paycheck arrives, you are living paycheck to paycheck. If you use your credit cards to cover your expenses until your next payday, then you’re living paycheck to paycheck.
61% of workers say they live paycheck to paycheck.
Living Paycheck to Paycheck Is Dangerous
Living paycheck to paycheck can be scary. Not only because of the uncertainty of your financial status, but you may use credit cards to pay bills, then more debt adds up to higher payments, and you won’t be able to borrow more money, or make ends meet.
So, we would like to help you stop having to live paycheck to paycheck.
How to Stop Living Paycheck to Paycheck
You’re living paycheck to paycheck either because you’re not budgeting or because you don’t make enough money to cover your expenses.
Create a budget
This helps you plan how to make the most of your income.
If all your expenses fit within your budget, then your income is enough and your spending is the problem.
Track your spending
Save your receipts for a few weeks to a month. Separate them into categories like gas and food, then add up receipts for each category. This will let you see where you’re spending the most money. You can also review your bank accounts to track spending.
Recognize and Cut Your Expenses
This can be the hard part. This can be everything for daily Starbucks stops, to small fast food trips, to Target runs, to buying drinks and more. You have to realize if you can't afford something and then you have to stop spending that money.
Increase your income
This isn't possible for everyone, but there are options outside getting a raise. You can change your tax withholding, get more money in your paycheck each month and then get a lower refund (if you get one at all). You’ll have more money to use during the month. You might also consider working part-time, finding an online job, or making money through a hobby.
Beware: making more money won’t always solve your paycheck to paycheck problem.
CareerBuilder reports that 30% of workers making six figures or more say they’re also living paycheck to paycheck.
Change The Way You Approach Money
You have to stick to the guideline of what you can afford, make adjustments where you can. Managing your finances, even if they don't seem great right now, does not have to hopeless or hard. You have to know that you can take control of your finances.
Disclaimer: The content on this site is provided for information and discussion purposes only. It is not intended to be professional financial advice and should not be the sole basis for your investment, financial or tax planning decisions. Under no circumstances does this information represent a recommendation to buy or sell securities, or any other products, or services. All content and information is subject to change at anytime.