How to Stop the Cycle of Living Paycheck to Paycheck

Believe it or not, more than 75% of workers live in the paycheck-to-paycheck cycle. That cycle is both stressful and precarious. It means you’re a single major financial disaster away from being car-less or even homeless. The good news is that you can break the paycheck-to-paycheck cycle.

Create a Budget
If you don’t use a budget, you’re in the majority. About 60% of people don’t bother with them. The problem is that the no-budget approach leaves you in a constant state of uncertainty about your finances.
Creating a budget forces you to nail down your expenses and where your income goes. Most people discover that they make enough to cover their expenses and build savings if they make some modest changes. If you’re having trouble with it, look online on sites like rmrwealth.com or on financial forums to get advice or see examples. Sometimes seeing someone else’s schedule can give you the right framework to do your own.

Trim Spending
There are, no doubt, highly disciplined people in the world who never spend recklessly. The other 99% of people spend more than they realize on impulse buys, eating out, and premium services. Trimming these kinds of expenses even by half can often free up enough cash to start building a cash reserve. Savings and emergency funds are the bedrock of avoiding the paycheck-to-paycheck lifestyle.

Automate Your Savings
The vast majority of workers get paid via direct deposit. It’s an invitation to spend if your whole paycheck goes into your checking. Many employers will direct a portion of your pay into a different bank account if you ask them to do it. You can also create scheduled transfers into saving from checking with your bank.

Start a Side Hustle
It’s a sad truth that, sometimes, getting off the paycheck-to-paycheck wheel of misery means bringing in more money. Taking on a second job is a daunting prospect if you already work full-time. Consider starting a side hustle that leans of your skills. A few possibilities include freelancing, managing social media for a business, or tutoring.

Seek Outside Help
Many people with excellent salaries find themselves living paycheck-to-paycheck. The problem isn’t overall income but mismanaged money in these cases. While budgeting can help, it’s often beneficial to seek out financial planning services for families. A financial planner helps you structure where your money goes so it provides the maximum benefit. You can search for something like “financial planning for families in NJ” for your area or ask friends for recommendations to easily find professional help.

Breaking the paycheck-to-paycheck cycle isn’t always easy or fun, but it is possible. It takes commitment on your part. You must be willing to take actions to gain control over your financial situation, like creating a budget and starting a side hustle. If you put in the effort, though, you can lead a more financially stable life.