When I first started working immediately after graduating from college, I would get my paychecks and blow them at the drop of a dime. Even though I had a huge shopping problem, I thought that I was doing fine because my bills were still getting paid. I was struggling to make ends meet until the next paycheck however, and this horrendous cycle caused me a lot of stressful days.
It wasn’t until I had to get some major repairs done on my car and didn’t have a dime to pay for it that I began to realize that this paycheck to paycheck lifestyle was a problem. The fact that I had responsibilities to take care of with no means to do so hurt me to the core. Even though I could always call home to mom and dad, it was embarrassing to have to rely on my parents as an adult living on my own.
You would think that after those first couple of incidents of not being able to take care of my needs that I would be delivered, but no. This cycle continued on for years and I could not understand why I never had any money.
Something had to change.
Once I was fed up with living this way, I started educating myself and increasing my financial literacy. I learned the importance of building emergency funds and paying myself first. I realized that my shopping habits were going to be the death of me if I continued living that way. I understood how I was never going to be able to build wealth for myself and family if I didn’t do something about my paycheck to paycheck way of living. I knew that I wanted more and was ready to do whatever it took to break the cycle.
HOW DOES IT HAPPEN?
There are many reasons why someone may end up living paycheck to paycheck. Some of these reasons may include not being educated on personal finance, not accounting for unexpected expenses, not knowing where your money is going, not paying yourself first, overspending, and living for the moment without thinking about your future. It’s important that you recognize the specific reasons why you’re living paycheck to paycheck if you want to change your situation. Now, pay attention to these ways that you can start to break free from the paycheck to paycheck lifestyle that’s holding you back from living the life you desire and DESERVE.
How to Break the Vicious Cycle
Be honest with yourself.
In order for change to occur, you have to first get real with yourself and admit that there’s a problem. Remember when I said that I thought living paycheck to paycheck was normal? I continued to live that way for years to come until I woke up and recognized the role that I played in my situation. There was no one to blame but myself; the amount of income that I made did not matter one bit. It was the way I managed that income that was detrimental to my financial success.
Here’s what I want you to do. Review your financials and ask yourself these questions.
- If I was to lose my job today, would I be able to pay my rent/mortgage next month?
- Am I saving any of the money that I make?
- Am I overspending?
- Do I know where my money is going?
- Am I usually stressed and frustrated about my financial situation?
Based off of your answers, do you think that you have a problem?
Tell your money where to go.
If you never know where your money goes and are always wondering why you’re broke, then it’s time for you to take action and get your finances under control. This is done by creating and sticking to a budget. A budget is an imperative piece to the financial literacy puzzle. You cannot be successful with your finances if you don’t know where the heck your money is going. You should be purposely planning out each and every dollar that you receive.
Check out this blog about sticking to a budget and grab your free budget worksheet to get started. You also need to make sure that you’re accounting for any unexpected expenses. The easiest way to make sure you’re covered when life happens is to start building your emergency fund. Ultimately, your emergency fund should cover at least 6 to 12 months of expenses but start small. Work on saving your first $500, then $1,000 and work your way up.
Decrease your expenses.
Are you wasting money on a gym membership and you never ever go? What about that expensive cable bill that you have, how about downgrading to basic cable? Take some time to review all of your expenses and determine where you can trim the fat. Most of the time, we throw our money away on unnecessary expenses. For instance, if you are spending a ton of money eating out, then it’s time that you whip out that old cookbook that’s been collecting dust on your bookshelf and start eating at home more often. Decreasing your food expenses alone can make a huge impact in how much money you will be able to save. Get creative here!
Increase cash flow.
If you don’t feel like you make enough money to be able to break the paycheck to paycheck cycle, then you need to consider increasing your income. The one thing that I have to point out here is that just because you increase your income, it doesn’t mean that you have more money at your disposal to spend. That’s why it’s imperative to work on your money mindset before taking this step. This extra income should be used to build your emergency fund and pay off any debts that you may have. Here’s a few ideas of some side hustles that you can start today to make money.
- Airbnb Host
- Baking or cooking
- Driving for Uber, Lyft, etc.
- Freelance writing
- Selling old stuff
- Becoming a virtual assistant
Get temptations in check.
You have to know your triggers man. By identifying your triggers to spend money, you’ll be able to work on avoiding those triggers from taking place. You should try writing your triggers down and having them some place where you can review them often. Once you start working on breaking those habits everyday, you’ll be that much closer to changing your financial situation. New positive habits will be created along the way and you’ll be happy that you took the first step.
Pay down those debts.
Just think about how much extra money you’d be able to free up if you weren’t paying all of those bills? To truly break the paycheck to paycheck cycle, you have to work on eliminating your debt by any means necessary. Once you start decreasing your expenses and have a little extra money to work with, use those extra coins towards your debts. In order to get out of debt sooner rather than later, you’re going to have to be aggressive with your payments. That’s why being on a budget is important.
Pay yourself bruh.
You work hard day in and day out and still have nothing to show for it. That’s because you forget to pay yourself first. You should at the minimum, be putting away at least 10% of your income. If you find it hard to save any type of money, then you need to decrease your expenses and increase your income if you can.
You have to believe that change is possible and that your financial future is going to be bright. If you don’t believe that you can break the cycle, then most likely your behaviors will reflect this belief. You won’t put forth the needed effort in order to change your situation around for the better. You do deserve better financially and you have to believe that you’re deserving.
Change your mindset, change your life.
If your goal is to increase your financial security and peace of mind, then you must escape the paycheck to paycheck lifestyle. You’re not going to see much change and progress if you don’t get that in order. As I’m a living testament to being able to turn it all around, I believe in you to be able to do the same. Just remember that the first step is to be 100% honest with yourself about your finances.
Now let’s talk about it. Do you find yourself struggling from check to check at times? How does it make you feel? Sound off in the comments, I wanna hear from you!
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