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How to Stop Living Paycheck to Paycheck

When you’re constantly scrambling to make ends meet, it’s easy to feel overwhelmed and stressed. If you feel like you can’t get ahead financially – or if you’re worried that losing your job or an unexpected expense could put you in serious financial jeopardy – it might be time to change your financial game plan. Check out these simple steps to help you stop living paycheck to paycheck.

An American Epidemic

When you feel like you only ever have just enough to pay your bills, you may be living paycheck to paycheck. Living paycheck to paycheck is an expression used to describe when an individual must use current earnings to meet all financial obligations from one pay cycle to the next. Typically, someone who falls into this category will have little to no savings, and if they were to lose their job they would likely be in a dire financial situation.

stop living paycheck to paycheck

If this sounds like your current situation, you’re not alone. A recent report from CareerBuilder claimed that 78% of full-time workers in America say they are living paycheck to paycheck. It was further found that 71% of American workers say they are in debt, with 56% saying  debt wasn’t manageable and that they’re in over their heads.

The number of households that are living paycheck to paycheck continues to grow as many families amass debt. This is one issue that is affecting a wide variety of American workers, even those earning higher figures. In fact, one in ten workers making $100,000 or more say they are living pay check to pay check.

 

How to Stop Living Paycheck to Paycheck

track your spending 

First things first, lay out all of your bills and your monthly bank statement and sit down and take a close look. Do you know just where your money is going? It’s possible you may find areas where you can save. Start by downloading a mobile app that allows you to easily track daily purchases.

If you see that a lot of your money is going toward eating out, start cooking more at home. Maybe you’re paying a lot for cable every month, but could save money by cutting the cord and instead relying on digital streaming services. Create a spending limit for costs like gifts, dining out, and other entertainment. If you look close enough, it’s likely you’ll find ways to save.

create manageable goals 

It’s easy to become discouraged when it comes to debt. Financial change doesn’t happen overnight, but over time, the savings will add up. By creating small, manageable goals that you can reach in a realistic time frame, you will be able to continue your momentum longer.

Want an innovative way to pay all of your debt off in full? Learn more about the snowball method.

ditch the credit cards 

While trying to get ahead financially, avoid spending with credit cards when you can. Pay with cash or debit cards so you’re only spending the money you know you have. This will help you avoid splurging or making purchases that will sink you further into debt.

A helpful tip is to stop carrying credit cards around with you. Carry only what you need for emergencies.

no spend week 

Try to have a “no spend” week. One week where you spend money only on absolute necessities. Pack your lunch instead of going out to eat, don’t buy that new sweater, and rent a movie instead of going to the theater on Friday night. If you can avoid spending for a week, all of the money you would’ve spent can act as a little bit of a savings cushion that you can build over time.

However, no spend weeks should only be occasional. Denying yourself fun or things you want regularly can backfire and cause you to lose motivation. It’s important to utilize this tool in moderation.

Get a Side Hustle

In the modern technological age, there are a number of ways for you to capitalize on your skills. Talk to a temp agency to learn about local part time opportunities in your region that may only require weekends or evenings. Luckily, the internet enables a lot of independent job opportunities that you can self-manage without the help of a hiring agency.

  • Get a part-time job
  • Sell unused items
  • Tutor or train someone in a skill
  • Develop an app
  • Drive for Uber or Lyft
  • Make and sell arts and crafts online
  • Rent a portion of your property through reputable rental sources like Airbnb or HomeAway

Prioritize Saving

Many people but saving on the back burner, thinking it would be nice to do, but that it’s currently not in the cards for them. A good way to start saving is to set small, achievable savings goals for yourself. Even if you just start with the goal of putting $2 into your savings every day for four months, that’s over $200 you now have saved that you didn’t have before. This is the practice of paying yourself first.

Open a dedicated account and deposit a portion of each paycheck into it. Many direct deposit payment systems allow you to route a specific amount from each paycheck to your checking and savings accounts. By paying yourself first, you remove the temptation to skip a contribution and spend the funds on expenses other than savings.

A Financial Partner for U

If you’re trying to get ahead financially, it’s important to work for a bank that wants to see you succeed. At Union, our Trusted Advisors want to put you in the right situation to help you succeed. Start saving more with our cash back checking and cash back savings accounts that will help you earn as you spend.

Union Cash Back Checking Benefits Include

  • Only $50 to open and first order of checks are free
  • No limit on transactions
  • Monthly Cash Back Rebate on all pin-less based debit card transactions
  • Cash back calculated at a rate of 0.4% on purchases up to $750 per statement cycle
  • Cash back calculated at a rate of 0.6% applied retroactively on purchases over $750 per statement cycle
  • Free online banking and bill pay

 

 

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