When my then-husband and I first married, we lived paycheck to paycheck, creatively looking for ways to make ends meet. In those days, I could take the checkbook to the store and let it “float” for a couple of days (today even checks can be immediately verified).
Later, as we learned more about money management and as we began making more money, we stopped living paycheck to paycheck. It’s not an easy process, especially if you are already behind, but it can be done.
Confront the Realities of Your Situation
Right now I live in Idaho, one of the states where people are least likely to live paycheck to paycheck because of the low cost of living. I first stopped living paycheck to paycheck after my ex and I moved from New York (one of the states where living paycheck to paycheck is most likely) to Utah — another state where it’s easier to avoid running out of money before running out of month.
Look at your situation. What are some of the realities you are facing? We couldn’t really get a handle on the situation until we made the move to a state with a lower cost of living. We probably could have made it work in a more expensive state, but acknowledging that we weren’t in a position to get ahead until we reduced our expenses helped speed up the process.
Be real about what is holding you back. Whether it’s debt, high cost of living, your habits, or something else, you need to confront that. Figure out which things you can change going forward to help you get out of your paycheck to paycheck rut.
What are Your Priorities?
Deciding on your priorities can help you make tough decisions about what to cut out of your budget, as well as where you might need to live. Think about what matters most to you, and trim other costs from your life. When we decided that we were tired of living paycheck to paycheck, we made it a priority to reduce our costs. We moved to a cheaper area and lived in a smaller place than we wanted. We changed our entertainment habits and focused more on getting rid of debt and building a cash cushion.
Because we knew our priorities, we had an easier time saying no to things that didn’t matter as much.
Boost Your Earning Power
Another consideration is to boost earning power. While increasing your income isn’t likely to help permanently unless you have modified your habits, it can be one way to get some relief from living paycheck to paycheck.
You might be able to increase your earning power by going back to school or obtaining a specific certification. Maybe you can start a side gig that provides a little extra money for you going forward. These are ways to get a little breathing room and make progress on your finances. As long as you know your priorities and have a plan for the extra income, it’s a good way to break the cycle of living paycheck to paycheck.
