Breaking the Cycle of Living Paycheck-to-Paycheck

Do you make a decent living yet see yourself counting on that next paycheck to survive? A recent study (PDF document) conducted shows that 47 percent of Americans are living paycheck to paycheck. Whether it is due to poor budgeting skills, or perhaps not knowing how much to save a month, people are finding it hard to break out of that cycle.

If you are looking for ways to stretch your pay and break that cycle, here are some things to pay attention to.

Pay attention to where your money is going.

I’ve written about our family’s journey of overcoming debt. One thing I learned, absolutely nothing will change if you aren’t keeping track of where your money is going each payday. You should have a budget set as well as a method of tracking your spending. You will not be in control and break the cycle without both of these working together.

Pay attention to what your budget says.

Your budget shouldn’t be flexible; this mentality makes it awfully hard to save. Once you make your budget, you should not be changing it unless you have to add to it, or adjust the numbers based on the amount of the bill. This skill was also something me and my spouse had to learn. Also, don’t skip out on paying a bill one month so that you have a little extra spending cash. If you have no disposable income at the end of the month, what are some things you can do to fix this? Perhaps you can pick up some more hours at work, or a part time job? You can also get rid of unnecessary bills and spending, using the money saved, open a separate bank account. A great way to reduce the chances of using this money is to either not request a debit card, or never carrying it with you. This will help with the temptation of spending.

Pay attention to what your spending says.

Going back to what was said above; tracking your spending will be helpful in determining how much you are spending monthly on things that are not in your budget. Are there any areas where you can reduce spending? Perhaps you like to eat out frequently, or like to go to the movies. If you are seeing a frequent spending pattern, consider cutting down or going without completely until your spending is under control. This can be harder to do, but once you see the money saved at the end of the month, it will be a sacrifice well worth it.

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‎04-10-2017 07:10 AM

Content provided courtesy of USAA.

By Angela Caban