Studies show that more than two thirds of people are living paycheck to paycheck at least part of the time.
That's a pretty stunning statistic.
Keeping your head above water financially seems to be getting harder and harder every year, and there are a variety of reasons why that's happening.
Living Paycheck to Paycheck is Not a Modern Problem
Some of it has to do with the way our attitudes have changed when it comes to money. Some of it is the economy we're experiencing, and some of it is due to how the world is changing and leaving some people behind because they won't change.
It's been a phenomenon that's been happening even since ancient times, as evidenced in the Bible in Haggai 1:6 where it says
“You have planted much, but harvested little. You eat, but never have enough. Your drink, but never have your fill. You put on clothes, but are not warm. You earn wages, only to put them in a purse with holes in it.”
But just because there are a lot of reasons why it's more difficult to make ends meet these days doesn't mean that it's not possible to be successful financially.
There is always hope.
You Don't Have to Live Paycheck to Paycheck
Any big change in life always starts with the decision that change has to happen, no matter what.
So what do you do if you're living paycheck to paycheck, believing there is just no way to get ahead? There are several steps you can take.
The first step is to get your mind right.
It's easy to believe when you're living from paycheck to paycheck that that's just the way things are and that's the way it always will be.
But that doesn't have to be the case.
There is a way to get off the paycheck to paycheck treadmill and overcome the mindset that comes with living in that mode forever.
You can read about how to overcome that mindset below.
Figure Out Why You're Living From Paycheck to Paycheck
Once you make the effort to get your mind and your thought processes moving in the right direction, you have to decide that you're done living on the financial edge. It's time to decide you're going to change your financial situation no matter what it takes.
Once you make the decision that you're never going back, then you have to figure out what caused the situation in the first place.
Here are some of the common culprits:
- You've come to the conclusion that debt is just a part of life- It doesn't have to be that way. Decide to be different. Car payments and credit cards are NOT inevitable.
- Luxuries have turned into needs- Cable TV, eating out several times a week, and so many other things that we once looked at as “extras” are now viewed as a necessary part of life. In reality these are not needs, they are wants.
- You're not making enough- You may be underemployed or just not making enough effort to go out and kill it at work. You need to kick it up a notch.
- You're overspending- You are simply spending more than you make. You need to gain better control of what you spend and how you spend it. Usually this is because you don't have a plan.
- You don't have a plan- You don't really keep track of your money and spend until the money runs out. Then you get your next paycheck and do it all over again. You just simply have no idea where all the money goes. This is how most people end up living paycheck to paycheck.
- Money is just too easy to spend- Credit cards, and even debit cards don't feel like real money. When you swipe and sign it doesn't hurt as much as using cash, so you end up overspending before you even realize what you've done.
- You have a spending problem- There is a lack of self control that needs to be addressed such as a shopping addiction.
My friend Lauren Greutman wrote an awesome book to help all you spenders out there! Check out “The Recovering Spender- How to Live a Happy, Fulfilled, Debt Free Life”
- The job market has changed- Businesses are changing the way they hire and compensate workers. You have to learn to change with the times and understand how to overcome those challenges that come with how the workplace is changing.
I recommend a great book by Dan Miller titled “48 Days to the Work You Love- Preparing for the New Normal” that can help you with that.
Be brutally honest with yourself.
You have to take a long, hard, honest look and figure out what is really causing your problem. Maybe it's one of the things I mentioned above. Maybe it's something else.
It might be painful to confront those issues, but lying to yourself never allows you to get ahead in life.
But once you figure out the main reasons you're living paycheck to paycheck, then you can start taking concrete steps to address those problems and totally overcome them.
Now You Can Leave the Paycheck to Paycheck Life Behind
Ok, at this point you should understand that getting your mind right and taking an honest look at your situation are a couple of good initial steps…
Now I'll give you specific strategies that will show you how you can leave the paycheck to paycheck life behind. You'll start getting ahead financially, instead of treading water like a shipwreck victim in the middle of a school of sharks.
Here's what you can do…
4 Strategies for Stopping the Paycheck to Paycheck Cycle
Now that you've worked through this much of the process (I hope), here are four things you can do to get off the paycheck to paycheck cycle for good (you may need to do some or all of these, depending on your situation):
- Get Out of Debt- Debt is a choice. It drains away your hard earned money in the form of interest and fees and keeps you from getting ahead. Becoming debt free is the best way to start succeeding with money, period. My get out of debt course can show you how.
- Increase Your Income- Sometimes, even if you cut expenses to the bone, you still can't make ends meet. You will have to find ways to make more within your present job, get a part time job, start a side gig, or a combination of these.
- Do a Monthly Budget- There is no good way to really know what you're spending unless you keep track. A monthly budget lets you see what's coming in and what's going out. It allows you to see where the money leaks are. A budget is essential.
You can access my free printable budgeting forms here.
- Make a Plan- You won't succeed in changing your financial life without a plan. Winging it doesn't work! Write down how you're going to get out of debt (Here's how to do that) or increase your income, and then go for it. It's difficult, if not impossible to change your financial life without a plan.
Living Paycheck to Paycheck Stinks
Most of us, especially the middle class, have been squeezed for years with stagnating wages and increasing prices. But that doesn't mean you can't succeed financially.
You just have to fight fire with fire.
It's time to be relentless.
You have to become diligent about learning how to overcome those paycheck to paycheck demons and keep them from rearing their ugly heads for good.
IT CAN BE DONE. YOU CAN DO IT!
Have you been implementing any of these strategies in your own life?
Tell me how they have worked/not worked for you in the comments.