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8 Tactics to Stop Living Paycheck to Paycheck

While escaping the cycle of living paycheck-to-paycheck isn’t easy, it’s possible to get ahead by changing your mindset, examining your lifestyle, and creating new habits. Once you free up even a small amount of discretionary income each month, it’s possible to build a better financial life with more security and less stress.

By
Laura Adams, MBA,
June 27, 2018
Episode #550
8 Tactics to Stop Living Paycheck to Paycheck

If you feel like your paycheck is gone the moment you get it, you’re not alone. Many people are stuck living paycheck-to-paycheck and just can’t seem to break the cycle.

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While escaping this dilemma isn’t easy, it’s possible to get ahead by changing your mindset, examining your lifestyle, and creating new habits. Once you free up even a small amount of discretionary income each month, it’s possible to build a better financial life with more security and less stress.

8 Tactics to Stop Living Paycheck to Paycheck

  1. Admit you have a challenge to overcome. 
  2. Forget what other people think. 
  3. Measure your cash flow carefully. 
  4. Cut your largest expenses first. 
  5. Reduce the cost of debt. 
  6. Automate saving (even small amounts). 
  7. Create more ways to make money. 
  8. Focus on the future you want.

Use these eight tactics to break the paycheck-to-paycheck cycle for good.

1. Admit you have a challenge to overcome.

To break the cycle of living paycheck-to-paycheck, first, you must admit that it’s a problem, if you haven’t already. If you’re not setting aside any money, you’re in a dangerous position that leaves you vulnerable to unexpected hardships. Any setback can put you in an even worse position than you are now.

If you don’t save for emergencies or your long-term needs, you’re not financially grounded—you’re simply drifting from one bank deposit to the next. That’s a surefire way to devastate your financial life.

When there’s money left over at the end of the month, you have the power to save and invest. Without it, you simply don’t have the ability to build financial security.

Whether the root of your money strain is due to overspending or earning too little, it’s time to face it head on. If you don’t act now to break the pay-to-pay cycle, accumulating a cash reserve or building wealth for retirement simply won’t be possible.

If you have a partner or spouse, talk to him or her about making a commitment to turn your financial life around. You might set a goal to build a small emergency fund before the end of the year or contribute to a retirement account every month.

When there’s money left over at the end of the month, you have the power to save and invest. Without it, you simply don’t have the ability to build financial security.

2. Forget what other people think.

Living paycheck-to-paycheck is a predicament that can devastate your finances no matter how much you make. Even high earners can let expenses and consumer debt get out of control.

When you want the appearance of success, or feel entitled to have what others have, you’re probably living a lifestyle that you can’t afford. If you equate your self-image with material things that are draining your bank account, it’s time to quit worrying about what other people think.

As I say in my book, Money Girl’s Smart Moves to Grow Rich, “A poor self-image is a bottomless pit that no amount of spending can fill up or make good. Search for ways to fulfill those emotional needs without spending beyond your means.” The first two book chapters are free to download here.

Some people were born savers and others continually struggle to delay gratification. If you can’t seem to put a lid on spending, it’s time to quit rationalizing bad behavior that’s holding you back.

You can take full control of your finances only when you take full control of yourself. For many people, the inability to manage money is really the inability to manage themselves.

So, get comfortable saying “no” to family or friends who may pressure you to spend more than you should. Get focused on goals you want to achieve and don’t let anyone prevent you from reaching them.  

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