Wow, I have been on a full blown budget for 2.5 months! Time sure is flying and I am slowly tackling my debt. I get a lot of questions about how I stopped living paycheck to paycheck in only 1.5 months. Even though I work full-time I never had quite enough to cover my living expenses and debt payments. I get paid biweekly and spent every payday stressing over how to make ends meet. It was exhausting and I knew I had to break the cycle, but figuring out how to stop living paycheck to paycheck was going to be tough.
When you’re living paycheck to paycheck
The key to stop living paycheck to paycheck is to pay your bills a month in advance. What does getting a month in advance actually mean? It means all of your necessities (i.e house note, groceries, utilities, etc.) to work and provide for your family. If this adds up to $1200, then you must have sitting in your checking account $1200 by time the next month rolls around. For example if you start on March 1st, then by March 31st, you should have $1200 in your bank account to pay April bills. The money you are making in April will pay for May bills, and so on and so forth.
When you’re living on a tight budget, the idea of getting ahead can seem impossible to achieve. Your thinking how am I going to get ahead and make it through. Recurring expenses can make this harder and leave you with not much to work with. But that doesn’t mean you’re stuck. Start small and keep at it consistently by following these tips on how to get ahead.
Increase your income
I know for some this seems better said then done. When you are working a full-time job and have a family to take care of getting another job can seem a bit overwhelming. But, remember this is not a long term thing! Once you reach your goal you can quit that second job. Some other ideas are work overtime at your current job, is your job looking for volunteers to work overtime. This is your chance to earn extra income. Work from home with a multitude of website were you can work from home you can possibly find an online job to make extra income.
Refinancing your home or auto loan can save you money to put towards getting ahead. Often times when you refinance you home 1) It can lower your interest rate and monthly payments 2) they will usually let you skip a month of payments. Use the extra money to save toward next months bills. You can also refinance your auto loan, with the same two benefits. But, the great thing about auto loans, sometimes they will let you skip two months of payments instead of one! This can really jump start getting ahead.
Look at your budget( if you don’t have a budget click here)and see how much your spending for certain thing and question whether you can lower that bill or expense. For example if you budget $500 a month for personal money, do you need that much? Can your lower this amount in order to reach your financial goals or lower your expenses? Go through your budget line by line and see what expenses your can lower or eliminate all together. Use the money you save to get ahead.
Sell Your Items
Everyone has items around their home that they are not using. Think about selling these items to make extra money. With sites like, e-bay, thredup, poshmark, etc. there are plenty of place to sell your new or gently used items. You will be surprised at the amount of money your can make on these sites. If you need an extreme boost in income you can think about selling your home or your car to greatly reduce your expenses. This is only recommended in extreme cases. But do what’s best for you and your household.
Suspend Extra Activities
Sometime in order to get what we want we have to make some sacrifices. In this case, you can choose to stop all extra activities until you can get a month ahead in your bills. This would include eating/going out, taking vacations, shopping, etc. You can also reduce your spending money on birthday and Christmas gifts this year. Choose people you feel you must get gifts for and cut out everyone else.
When your first start budgeting it can be really hard and sometime you will backslide, but just remember what your end goals is! All of your hard work will payoff in the end. What other suggestion do you have to break the cycle of living paycheck to paycheck? Leave a comment below.