Today’s blog post was written by our guest author named Adam. He wanted to share with everyone some helpful tips that he’s used to stop living paycheck to paycheck. We hope you enjoy his insights as much as we have!
Sometimes, during the week leading up to payday, I find myself clinging for dear life to my finances. If I can just survive until I get paid, I think to myself, then everything will be OK. I go into crisis mode, axing all discretionary spending and hoping that no unexpected expenses pop up.
When my paycheck finally appears in the mail, I breathe a huge sigh of relief. And then I revert to my old spending habits—eating out, buying the latest gadgets, etc. A few weeks pass, and I’m right back where I started, panicking about making it to my next paycheck.
It’s a cruel cycle, like the spin cycle of a washing machine. But instead of coming out clean at the end, I would just wind up dizzy and half-drowned.
If any of this sounds familiar, you’re not alone. Thankfully, I found a way to escape the constant spin cycle and stop living paycheck to paycheck.
My Arch-Nemesis: The Dreaded Budget
Saving money does not come naturally to me, and money gets spent often without me even realizing it. I knew right off the bat that I was going to get nowhere without a budget.
Budgets take hard work and discipline especially if you want to stop living paycheck to paycheck. You need the self-control to resist making any unnecessary purchases, and you need the personal honesty required to separate wants from needs.
Taking a Long, Hard Look at My Spending
It was time to take out the old magnifying glass and look at how I was really spending my money.
I was shocked. Did I really spend that much money eating out every month? It was atrocious how much of my paycheck went to entertainment.
As soon as I had a strong grasp on where I was spending my money, I was able to craft a budget that accounted for my needs, and even made a little room for some wants (for the sake of my sanity).
My Game Plan for Dealing with Credit Card Debt
One of the big motivators for turning my finances around was that I wanted so badly to get out of debt. Over the years, my spending habits had been subsidized by various credit cards, and I’d built up quite a chunk of debt.
Thankfully, my credit card debt provided short term goals to help me along the way. Basically, I would zero in on one balance, keeping all other balances on the back burner. Once that one card was paid off, I felt the accomplishment of having achieved a goal, which helped me forge ahead with my budget.
Every six months or so, I take time to reevaluate my budget and spending, and make adjustments accordingly. As I’ve reduced my debt and added to my savings, things have gotten easier. I’m no longer living paycheck to paycheck, and I’ve even been able to fit in a few purchases for things I really want, like gadgets and such.
How did you stop living paycheck to paycheck? Leave your tips in the comments section below.