How to break the paycheck-to-paycheck cycle in 8 steps

  • Reset spending habits by restricting your spending to needs only.
  • If you want to get out of the paycheck-to-paycheck cycle don’t buy everything your heart desires.
  • When budgeting isn’t enough, look for ways to increase your income. 

SHIRLENE GRACE ISAAC

Are you living paycheck-to-paycheck and are constantly stressed about your finances?

Here’s some good news, you don’t have to continue living like that. You can break out of the cycle and travel the road to financial freedom. It isn’t complicated as it sounds, but it does take some effort and self-control from your end. 

Here are 8 steps you can take to break the cycle:

Cozy cushion fund

Try to keep a little cushion in your checking account so you don’t have to live in fear of an overdraft fee. Why let your account get down to zero when you can save up an extra $100 or so?

That way, you’re not sweating every penny or worried about ODs right before payday.

Budget always

Get into the habit of budgeting and plan your spending. You might not want to hear this but keep a reign check on your grocery shopping list, that can add up your expenses fast. 

Make a list and assert yourself ahead of time that you’re not going to buy every fun thing in sight. Be sure to walk into the store knowing exactly how much you want to spend. Have a budget planned for every time you plan a grocery trip and stick to that amount.

Failing to plan equals budget ruining. 

Don’t get impulsive

Though it seems tough at the moment, try to reduce impulse spending.

Oh the joy of impulse buying! This is another ruiner of budgets. The joy is temporary! Believe us!

If you struggle with this, try going from thinking, I need this right now to I may or may not need this, so I’ll wait a week just to be sure. AKA delayed gratification. 

Whether you are able to manage impulse buys or not, we don’t now. Just ensure that you don’t sink your budget.

Reset spending habits

Try using a bare-bones budget strategy for a month or two, wherein you restrict your spending to needs only. It’s drastic but it’s totally worth it.

Results? It frees up money for saving and paying down debt and eventually helps you get off of the paycheck-to-paycheck treadmill.

Raise the income bar

When budgeting isn’t enough, look for ways to increase your income. 

A lot of people resort to increasing their income by opting for side hustles. This will in turn help fix your financial situation.

Otherwise, talk to them bosses and request a raise.  Extra shifts and  overtime could help you find a little more financial stability.

Plan your payoff strategy

If you want to get out of living paycheck-to-paycheck then a credit card debt should be off your shoulders. Ouch! You read that right.

Having to pay an interest every month is an unnecessary expense. But if you’ve already got credit card debt, use a payoff plan to wipe out your high-interest debt. 

Write down your debt total, monthly minimum and interest rate. Assess your budget to see if you can pay more than the minimum. Make bigger payments and you’ll eat away at your debt faster. 

Learn and keep learning 

Make time to learn about finances every week. There are 168 hours every week, so the odds of you finding 15 to 20 minutes to expand your financial knowledge are not too low. Nope! No excuses counted.  

Whether it’s checking a finance news site in the morning, listening to a podcast while in traffic, following reputable finance experts on social media, or sitting down to reading a book about money management—the more you learn about finance, the easier it is to make healthier financial choices 

Make those sacrifices

Not everything you lay your eyes on in a store has to come back home with you. Accept that sometimes you have to make some sacrifices. If you want to get out of the paycheck-to-paycheck cycle you probably can’t buy everything your heart desires.

And you know what? That’s okay! It’s not the end of the world, it just means you know what’s worth spending money on and what isn’t.