How To Break The Paycheck To Paycheck Cycle

by Pam on September 21, 2016

Okay, so you have graduated from college, you landed a good job, and you are ready to start your own life now. But, the problem is, you are already living paycheck to paycheck.  While you are no longer in college, you may still feel like you are living the life of a struggling college student and this is quite disappointing. You were ready to kiss that life goodbye and finally be able to live the way you want. Unfortunately, it did not happen that way. But, luckily for you, this article will help you break that horrible paycheck-to-paycheck cycle.

What Is This Paycheck-to-Paycheck Life?
The paycheck-to-paycheck life is one where you are waiting to receive your next paycheck or deposit to make financial moves in your life such as buying groceries or paying a bill that is due. This type of lifestyle can be depressing for many and cause a lot of anxiety and stress, especially if you know that you will run out of food or a bill comes due BEFORE your expected paycheck or deposit.

Let’s take a look at how we can end this way of living once and for all.

1. Own The Problem and Come to Terms with It
You may be embarrassed to say that you live paycheck to paycheck, but don’t be. In fact, many people do and you are not alone. Most people do not want you to know they live this way either, so they simply hide it, so you never suspect anything. Before you can end the cycle, you must realize and come to terms with the fact that there is a problem. If you have any credit cards, you have likely realized there was a problem when you maxed three of them out.  You CAN get out of this problem, but it will take some discipline, willpower, and work. You must want to get out of this style of living before you actually can. One way to help alleviate some of the stress you may experience is to include your partner in the process. The two of you can encourage each other and make better financial decisions jointly.

2. Make Some Cuts to Your Expenses
Just like you trim the fat from your meat, you need to trim the fat away from your expenses. For example, if you are paying to have HBO, Showtime, and other premium channels on your cable box, but you hardly watch them, then cut off the fat. By eliminating these additional channels, you will save yourself some extra money monthly.  Other ways to trim the fat from your expenses include turning off lights that are not in use, raising the air up a couple of degrees, and even cutting out extra luxury expenses such as gym memberships, etc.

3. Refinance or Consolidate Your Student Loans
If you have student loan debt, you are probably ready to just kiss it goodbye for good. Unfortunately, it is not always that easy. If you have a high interest rate or you have multiple student loans out, you may want to look at student loan consolidation or refinancing. You can receive a lower interest rate and lower monthly payment. There are many lenders out there willing to help you save money on your student debt. You should be sure to compare options before choosing one!

4. Make Some Sacrifices to Get on Your Feet

While you may not like the sound of it, it is wise to make some temporary sacrifices to help you stop the paycheck-to-paycheck cycle. You have a couple of options when it comes to sacrifices, but the most commonly chosen one is to downsize.  You can either move back in with your parents until you have saved up enough money, or you can rent a small one-bedroom apartment instead of the large two-bedroom you have now. While you may not like the small space, you can save hundreds of bucks a month just by renting a smaller space.  Also, you could hold a yard sale and get rid of items that you do not have to have. For example, if you have a closet full of clothes, but you only wear half of them, consider selling the other half. You will make some extra cash on items that you have duplicates of and items you would likely never get around to using or wearing anyways.  Lastly, you should consider cutting out the dinner dates, lunches outside of the office, and coffee on the way into work. Let’s break it down just a bit for you. If you spend $5 per morning on coffee, $10 per lunch, and $10 per dinner, if you did these 5 days out of the week, you would spend $500 in a month. Now that is a lot of money you could be saving.

Stopping the paycheck-to-paycheck lifestyle is not easy, but it can be done, especially if you take the time to focus and cut out additional expenses.

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