6 Tips To End The Cycle of Living Paycheck To Paycheck
Do you stress and worry while waiting until your next payday? If you didn’t earn money for a month, would you still have enough money saved or invested to pay your monthly expenses? Do you wake up or go to sleep with money issues on your mind? When you think about your finances, do you immediately feel overwhelmed and defeated? If you answered yes to at least one of these questions, then you might be living paycheck to paycheck. I've been there many times before, so I understand how it feels.
I started working at seventeen years old making $300 - $500 every two weeks at KFC. At that time, I had no financial responsibilities. I thought I was making "good" money. Once I graduated from high school, became a single mother, and started college, I began to have REAL expenses pour into my life. There were times when I only earned minimum wage and other times barely above it. I didn't understand how to manage my personal finances back then, but over the last fourteen years I have learned how to be successful at managing my personal finances through trial and error. Combine that with my education and work experience, it has lead to many unexpected life lessons and amazing opportunities personally and professionally.
According to CareerBuilder research, 78% of workers in the United States of America are living paycheck to paycheck. The national survey was conducted online by Harris Poll on behalf of CareerBuilder from May 24, 2017 through June 16, 2017. That is a huge percentage. Most people assume that those who live paycheck to paycheck are people who have an extremely low income. That is just not true. There are some people who earn six figures and are still living paycheck to paycheck. Sometimes the more money you make, the more money you spend.
The key to overcoming the paycheck to paycheck cycle isn’t making more money. The key is to change your behaviors and relationships with money. If you mismanage $20,000 per year, then you will do the same with $50,000 and $85,000 per year. If you earn over $100,000 per year and living pay check to pay check, you will do the same if you earn $300,000 or $800,000 per year. More money doesn't solve your problems. Change is what solves problems. Overcoming the paycheck to paycheck cycle starts with YOU.
6 tips to end the cycle of pay check to pay check:
- Know How Much You Earn! If you don't know how much money you have coming in, how can you properly manage it? And I don't mean know how much you get paid per hour or per day or per week, but you need to know and understand how much you earn down to the very last penny. Know your net and gross income each month. Some of us may have only one stream of income and others may have multiple streams. If you only have one stream of income, research ways to increase your income. More money brings more flexibility and more opportunities.
- Know Your Spending Habits! What do you spend your money on each day? Every time you swipe that debit card, every time you pull out dollars or change, each time you click the purchase button online, what are you paying for? In order to change you financial situation you need to account for every penny. Track your expenses for the next 30 days. This can be a tedious process, but it will definitely open you eyes and allow your mind to understand what you are waisting money on each month. Those waisted funds can be used in other areas that will allow you to progress forward in your finances.
- Know When to Eliminate Expenses Permanently or Temporarily. We all pay for things each month that we know is a waste. Get rid of those things to free up more money to use towards other things. Even if it's just temporary, at least that will give you some time to use those funds towards other important goals. You could try eating out less and cooking at home, cutting out the expensive gym membership and workout at home or outside, lowering your cell phone and cable bill, or cut out cable all together, take advantage of the cheaper options to watch your favorite movies and shows. Also, try buying less clothes. If you can afford to shop for clothes every week, then that's great. For those of you who can't afford to do that and know you need to be dedicating money to others areas of your life, you might want to consider not buying new shoes or clothes each week or even each month.
- Make Your Health a Priority! We can’t make important money and business decisions if our minds and bodies aren’t performing at their bests. You can have all the money and opportunities in the world, but if your health isn’t at a certain level, it won’t allow you to perform at your highest potential. What we put into our bodies and how physically active we are has an affect on how we perform at our jobs and other day to day activities. Today, take a step towards improving your health and wellness. It could be small baby steps such as getting an extra hour of sleep, drinking more water, meditating, or jogging. It will help you physically and mentally prepare to conquer all that this world has to offer, which will then translate over to giving you the power to maintain your finances.
- Read, Learn and Take Action! The financial world is forever changing on a daily basis. Just like many other industries, you have to know what has been done in the past, what's going on now, and what may be coming in the future. There are new ways being created and new ideas being shared everyday. You must be open minded and willing to change when necessary.
- Get Out of Debt! One the top reasons why people are living paycheck to paycheck is because they have so many debt payments going out each month. When I was drowning in debt, I would get paid, but then my balance would go down to zero very fast after I paid a few basic living expenses and a lot of debt payments. The less debt you have the more peace of mind you have. When you get paid, it feels good not having to give it all to the bank or a person you owe.
Whether if you are living paycheck to paycheck or know someone that is, NOW is the time to start making the change. Encourage yourself and others to start NOW! You don't want 2019 to come and you are still in the same exact financial position. I know everyone it's struggling financially, but that 78% is a lot of people. Sometimes the people you would least expect are living paycheck to paycheck.
Don't let the glitz and glam fool you. Don't let social media fool you. Don't let pride, shame or guilt stand in the way of you making a change to your financial situation. Don't remain a hostage to what people think is normal. Break free from this negative generational cycle so you can live the life you desire. If your finances are a hot mess, then YOU ARE A HOT MESS! If you would like more tips on how to overcome the paycheck to paycheck cycle, please contact me. I am happy to help.