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It’s time to say goodbye to the paycheck to paycheck life forever.
If you’re sick and tired of the stress and the late payments and the overdraft fees that come each month with this lifestyle, then it’s time to make some changes. This won’t be easy, but it will be worth it!
The good news is that most of the time this problem is fixable by getting tough and changing your mindset. Follow these steps:
1. Make this your one and only priority
Decide that breaking free from the paycheck to paycheck style is more important than anything else right now. This means that it’s more important than Friday night pizza, buying any new clothes, or grabbing lunch in the drive thru.
If you really want to stop living paycheck to paycheck, and you’ve only got a little wiggle room to work with, then you’ve got to give it your all. If you do it right, you won’t have to sacrifice for long.
2. Do some highlighter budgeting
Highlighter budgeting forces you to analyze your past spending, and be super intentional with your spending going forward. Read this quick post about this fun budgeting method and go create your budget.
3. Cut down your expenses
To speed things up, you need to free up some more money each month. You’re going to have to make some cuts with certain expenses.
Take a look at your top expenses from the highlighter budgeting exercise, and start thinking of ways you can trim those down. Can you enroll in auto-pay to get a discount on some bills? Switch insurance companies to get a better rate? Maybe you need to temporarily give up those convenience meals that cost way more than prepping them yourself would.
Do whatever it takes to start lowering those bills!
4. Save, save, save
Absolutely refuse to touch that “extra” money just sitting there in your account. Oh yes it will be tempting, but refer back to step number one! Move it over to a savings account, freeze your debit card and only use cash, just do whatever you’ve got to do to save yourself from spending any of that money.
5. Repeat each payday until your buffer is fully funded
The best thing you can do is get a month ahead on all your bills. Depending on how much money you make (and how diligent you are about saving it), this could happen pretty fast or it could take a while.
If it looks like it’s going to take you more than a few months to get a full month ahead on bills, take a breather once you hit a certain buffer in your checking account.
Since right now you’re living paycheck to paycheck, any buffer is going to be better than what you’ve got going on. I would set your first goal to be a minimum of $200 extra in your account.
Once you hit that goal, allow yourself a little something special to keep you motivated. Food is a big motivator for me, so going out for dinner would be a huge reward to me!
6. Keep budgeting to avoid falling back into the paycheck to paycheck cycle
Once you’ve finally clawed your way out of living paycheck to paycheck, the worst thing you can do is fall right back into your old spending habits. You need to budget so that you can be in charge of your money, not the other way around.
Need some more help with budgeting? Head to our beginner’s guide to budgeting here.
Breaking free from paycheck to paycheck is possible.
By sacrificing a little in the here and now, you can begin to free yourself from the stressful cycle of waiting for payday. Just stick with it, and feel free to share your story down in the comments!