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How to Quit Living Paycheck to Paycheck

Writer and editor - Lauren Ward | Updated on 2018-08-21 |

Living paycheck to paycheck is not only stressful; it almost always ends badly when an unforeseen financial burden introduces itself. Roughly 75% of the population is getting by this way. If you find yourself in the same situation, here are some strategies for getting out.

Stop Buying What You Don’t Need
Easier said than done, I know, but chances are you wouldn’t be living paycheck to paycheck if you quit buying so many nonessential items. I’m not saying you can’t treat yourself every now and then, but if you’re someone who always orders out for lunch at work, this is clearly a place where you could be doing your budget a favor.

Look over the last year of spending and I bet you’ll identify a number of things you regularly spend money on despite the fact that you don’t need them and are in a bad place, financially. Many of them may not even bring you any real pleasure. Between online banking and credit card statements, you should have no problem coming up with ideas for how you can save money each month.

Put Your Savings Somewhere You Can’t Reach
Then put that saved money somewhere that you can’t simply spend it when the impulse hits you. While online banking is great for checking statements, it can also be your downfall if you begin taking money out of your savings for a little online shopping spree.

Either eliminate the ability to access your savings account or put this money in something like a 401(k) or Roth IRA.

Automate Healthy Habits
Along the same lines, once you know how much you can save every month without running into trouble, you can automate the process. For example, you can tell your company how much from your paycheck you want going into your 401(k). You can even tell your bank how much from each paycheck must go into savings.

With today’s technology, there is no end to the ways you can save money without even needing to develop new habits.

Earn More Money
Not to be too blunt, but this is going to be essential. Although the above should help, you need to focus on climbing the ladder at work and earning more money. If possible, take on a part-time job to supplement your annual income too.

Now, I know this is easier said than done. However, I’m not suggesting you need a promotion by the end of the month. Make a larger income a six-month goal or one you’ll accomplish by the end of the year and then start thinking daily about how you can make this happen.

Living paycheck to paycheck is a scary thing and I by no means am trying to oversimplify what it takes to get out of this vicious cycle. It’s important, though, that you know it is possible even though it may take you a year or longer to do it. That being said, once you’re finally free and have a more comfortable lifestyle, it will all be worth it.

Lauren Ward

Lauren Ward
Writer and editor

Specializing in original, well-researched web content, including blog posts, news articles and web copy. Areas of expertise include personal finance and lending. 10 years of experience as freelance writer and working at Federal Reserve Bank of Richmond.
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