Tired of Living from One Paycheck to Another? You can Stop the Cycle.

When living from one paycheck to another, few things are as nerve-racking as the last few days before your next pay day. Your bank account is running on empty, you have a pile of bills ready to get settled, and your fridge is looking rather empty.

When your paycheck finally arrives, you discover that the moment you fill up the car, pay the monthly bills, and do your grocery shopping, you are back to where you started.  Broke and counting the days until you repeat it all.  In the meantime, you keep hoping that no unpredicted situations, like a pricey vehicle repair or a burst pipe, come along.

You don’t need me to inform you that this is not an ideal way to live.  However, it’s not always an easy task to stop the paycheck-to-paycheck pattern.  Here are some actions you can take to end the cycle and manage your finances more efficiently:

Monitor your Spending

A possible reason for living this way is that you might be spending too much money on things you don’t need.  But you can’t manage your spending unless you know accurately where those funds are going every month. You can do this by observing your spending from one payday to the next.  Save slips from debit card transactions and write down any purchases you make with cash.  Include monthly bills and living expenses you paid for that month, as well.  By the time your next paycheck is due, you’ll have an excellent idea of where your income is going.

Create a Budget

The answer to quitting this lifestyle is by determining how to make your hard earned money last.  Mainly, you want to reach the next pay day without being penniless while having some money towards savings.  As soon as you have assessed your spending habits, it’s time to sit down and draw up a budget.  Include things like rent or mortgage, utilities, along with other regular monthly obligations. Remember to add stuff like groceries, personal savings, and entertainment.

Should you get an Increase, Ignore It.

This is an effective strategy to ensure a little extra room in your savings account.  The next time you receive a salary increase, just imagine it didn’t happen.  Don’t change your budget or spending habits.  Just put the additional cash in savings and go forward.

Stop using Credit Cards. 

It can be tempting to treat your credit cards as an emergency account or another income source but don’t surrender to that temptation. You’re only setting yourself up for additional high-interest financial debt, and more credit card bills to pay every month.

Start living below your means. 

There’s an excellent reason why some people seem to have more money than others; they spend money wisely. They aren’t the individuals with the fanciest cars or the biggest houses, but they are often the people with the most significant savings accounts and usually, don’t have debt troubles.

Living paycheck-to-paycheck is not easy, but if you are prepared to do something about it, it is possible to escape the cycle.