Living paycheck to paycheck seriously sucks. About 6 years ago my husband and I were in a tight spot. We had zero emergency savings. We were spending what came in and saving very little. We bought things as we wanted whenever we wanted them. Thus, continuing the paycheck cycle that never ended.
Something had to give and it wasn’t our paychecks. My husband had been complaining about never having cash to do fun things. We were tired of the money arguments and never agree on how to deal with them.
SOMETHING’S GOTTA GIVE
So that’s when it happened the first time. The “something” was the major budget overhaul. I’ve talked about our extreme saving and budgeting before. This looked a lot like that except I didn’t have a full-time job yet. We were still living on one income and that hurt like hell let me tell you. This was the first time I looked at our finances with any real seriousness. I was in my early twenties and would be graduating college that year.
So here’s the deal. No matter what you have going on in your life you NEED an emergency savings fund. At this point in our lives we didn’t have that and honestly anytime we had to pay for a repair or buy something we couldn’t pay cash for we used credit and paid dearly for it.
Having an emergency savings account would have seriously helped alleviate the thousands of dollars in credit card debt we were paying on with no end in sight. Living from tax return to tax return to pay for major repairs sucks and it shouldn’t be how our budgets are structured. Peace of mind is something worth paying for!
HOW TO STOP LIVING PAYCHECK TO PAYCHECK
So by now, you’re probably wondering to yourself, “How did she manage to break out of the paycheck cycle?”
Well, that’s a great question. I took it one hurdle at a time.
- We had to change our mindset. This isn’t as easy as it sounds of course, but it’s necessary. Instead of thinking, “I deserve to buy this blu-ray movie because I haven’t bought myself anything in weeks,” think to yourself “I want to get out of debt and build this savings account. Tell yourself this is necessary to change your lifestyle in the long run. Keep telling yourself whatever mantra you need to hear in order to push yourself forward towards that goal. RELATED: 4 SUREFIRE WAYS TO CHANGE YOUR MONEY ATTITUDE
- We had to set an actual goal. But wait! We had to figure out what our priorities were first. Were our priorities having free shipping at our fingertips for $79 per year? No! Because having access to “free shipping” was too enticing. Our priority was getting money in an account that we could rely on today, tomorrow or next week if we came across that urgent need. After determining our priorities we set a goal. We wanted to have $1000 in savings account for rainy days.
- We had to change our spending habits. This one is equally as difficult as the money attitude step. However, it’s a necessary evil. I started this process by printing our bank statements and seeing just where the money was going. Without knowing where your money is sneaking off to you will never be able to change your spending habits. This gave me great insight. I printed statements off for 4 months and filtered through every transaction so I could follow that money.
- We had to cut costs. I made a list of expenses on a blank piece of paper. All of the subscriptions, drive-thru runs, and movie rentals were the first to go. Beyond that, we set a goal for each milestone we wanted to hit. They went something like this:Goal #1: To put all money we would have spent on eating out towards debt.Goal #2: To put all of the money we would have spent on eating out and needless movie rentals or purchases towards debt.
- The magic happened within my actual budget. I created this nifty budget printable that I was able to use to track our spending and our budget all in one place. That meant I had to manually enter the information myself, however, it was worth it because I was involved in the process. I knew what every transaction was and I was able to better control the spending. This is the same printable I use today for our budget. I’ve gone back and forth on methods, but I always come back to this printable.
- Give every dollar purpose. This is where the printable helped BIG time. I would drop the numbers in for the bills and our savings (because we pay ourselves first) and whatever I had left over would go to debt first then entertainment. See I did this in a couple of steps. First, I factored in my extra debt payments into our budget and we paid ourselves first. Second, the remaining money went to debt before we would spend it on needless crap. See how I did that?
When you give your money a home before you get it then you don’t have an excuse when that deposit hits the bank account. You can take it a step further by setting your payments up on autopay. That includes the savings and retirement deposits you make each month. Make them automatic so it’s not even an option when it comes time. By taking some time to actually learn how to properly budget I was able to take the control back.
RELATED: HOW WE SAVED $5K IN 4 MONTHS
GOODBYE PAYCHECK CYCLE
So by following these steps, I was able to dig us out of debt and start the process of saving for a rainy day. It wasn’t an easy task and it took years to accomplish, but it happened and during the entire process we bought a house and started our journey towards home ownership. Which meant we actually needed that emergency savings account.
Follow These Steps:
- Change your mindset
- Set priorities and goals
- Change your spending habits
- Cut costs
- Give every dollar purpose
- Set the budget
Living paycheck to paycheck is tough. You will need to change your attitude towards money and you will have to work hard on changing your lifestyle. If you want to go even further you could pick up a part-time side hustle and use the money you earn to put towards debt or savings. I detail here just how I set up our budget the second time I performed major surgery on our finances. I’m talking major cost cutting!
No matter how you do it just do it. Say goodbye to the paycheck cycle. If you want the exact printable I used to dig us out of the paycheck cycle then fill out the pretty box below. Stop fooling around today and take action!
Are You Tired of Living Paycheck to Paycheck?
Are you sick and tired of not having money? Grab my free printables that I used to stop living the paycheck cycle and get yourself on track for good!