What does it mean to be living paycheck to paycheck? It means that you literally run out of money before you get the next paycheck. It also means that you spend all your money before the month even ends.
A survey states that 8 out of 10 people live paycheck to paycheck. Being in such a situation can be really stressful as you are constantly worried about making ends meet. This can adversely affect your health and well being. You need to sit down and figure out how you can bring this misery to an end, otherwise life will be nothing, but gloomy.
Here are a few ways through which you can stop living from paycheck to paycheck:
Make a list of your expenses
You already know what your income is, so make a list of expenses you incur month to month. This list can take up an entire month as you will be jotting down all your day to day expenses. This list should consist of all your little and big expenses. Even if you spend $1 on something, write is down. Make sure to include how much you spend on utilities, auto loan, mortgage, food, student loan, shopping, etc. This way you will know exactly where all your money is going.
Highlight unwanted expenses
Now that your list is ready, cross off all those expenses that are unnecessary and can be avoided. You will be surprised at how much you sometimes mindlessly spend on things that aren’t even wanted.
You have your list of expenses and you have a list of things you unnecessarily spend on. Now what you have to do is save money, even if its saving $1 a day. It is advisable to save at least 10% of the money you make. This way you will have money for a rainy day or for any investment opportunity that may come your way.
Ask someone to save for you
If you are struggling with your savings and end up spending it all, then it is advisable to hire a fund manager. But would that be practical if you are living paycheck to paycheck? No, it wouldn’t. So what you can do is ask someone close to you like your mother, husband or your best friend to save your money. You can hand them a certain percentage of your income every month, and forbid them from giving you the money, unless an emergency situation arises or you get a great business opportunity.
Know when to stop
You have your income, you know your expenses and you have your savings plan in place, what’s next? Well now you should learn the art of self control. The world is consumed by materialism and so are you, you love to splurge a little here and there every once in a while, but is it worth it? Maybe not! Your closet is already filled with so many clothes you haven’t even worn; do you still need to go shopping for new clothes? No! Is it necessary to eat out every other night and spend over $20 on a mediocre meal when you have already shopped for groceries and can prepare a healthier and cheaper meal at home? Hence, you should know when to stop. Before making a purchase decision stop and ask yourself if it is necessary. This habit will help you control your expenses.
Look for additional income
Inflation is on the rise, even if you control your expenses, your income may still seem insufficient to do the needful. This is the reason why you should always look for opportunities to increase the flow of your income. If you are doing one job, it is ok to look for another part-time job. Go work at your favorite retail store, or if you are a student look for a job on campus. Uber and Lyft are also great part time job options.
Consistency is key
A month or two will go by with much difficulty, but eventually you will develop the habit of controlling your expenses. The key is consistency; you have to be patient to reap the benefits of efficiently managing your income. It is important for your overall health that you get out of this vicious cycle of living paycheck to paycheck.