Living from Paycheck to Paycheck – How to Break the Cycle
Nothing is more stressful than living from paycheck to paycheck, but a massive number of families do so every month. Eventually this type of situation can cause poor financial habits and frustration to develop. Once you’re in that cycle, it can be very hard to get out of it. Fortunately there are some specific things that you can do to get free of debt and change your financial outlook. Here are five solid tips to get you off and running:
Don’t Confuse Today with Forever
It can be very easy to get caught up in the frustration and hardships that you are experiencing in the moment. Things can begin to feel hopeless. Struggling and living paycheck to paycheck is not, however, permanent. If you make a plan, keep the right attitude and follow-through, you can dig your way out of the cycle. It all begins with believing that and leaving hopelessness far behind.
Fully Understand Your Finances
You can’t change your stars financially or otherwise if you don’t know where you are currently. Break your financial situation down into simple plus and minus. Write down how much you bring in and how much you pay out. Seeing this on paper can help you to quickly see where your problems lie. If you are living paycheck to paycheck, you either have a problem with needing more money, or you need fewer bills. Make sure you are fully aware of your current situation and needs. It can also be a great idea to track your spending for 30 days.
Create a New Slimmed-Down Budget
This may seem like a pie-in-the-sky concept, but trimming your budget is very powerful and real. Even if you are only able to create enough wiggle room to save 50 bucks a month, that can be enough to start the ball rolling and create new habits. If you have gone through your budget and literally have absolutely nowhere to free up money, it is time to go out and find ways to earn more. Nobody said this would be easy. Pull up your bootstraps and get creative. Remember, you are dealing with a simple plus/minus situation. Either add more money or take away more spending.
Eliminate Late Fees
Late fees, insufficient funds, penalties and interest should all become your worst enemies. When you figure out your bills every month, place these money eating problems at the top of your priority list to eliminate. All of these things have one thing in common–They eat up money that you could actually be saving. Remember, the whole idea behind getting off the paycheck to paycheck train is to be able to save money and create a future. Only pay these fees when you have absolutely zero choices.
Imagine a Better Future
It only takes a little bit of time and a very slight change for you to start to see the possibilities. Even if you only have a couple of bucks after paying your bills, it can feel really good and inspire you to think about your future in a different way.
Don’t try to change all of this overnight. Instead, try to create small wins to hold onto each and every time you get paid. Before you know it the small wins will get larger and you will be off the paycheck to paycheck cycle.
