It’s very difficult to live from paycheck to paycheck. Most times, it stereotypes your life and makes it difficult for you to make the necessary money decisions. I get it! I know how you really feel. For years, I invested my time to learn how to stop living from paycheck to paycheck and it has yielded results.
Let me tell you my story!
I lived a large part of my life depending on my salary. I worked remotely so it made a lot of things convenient for me. A bad business decision reduced the company’s profits and I was told to stall.
The following months were very demanding for me. I had barely enough to feed myself.
It was in that moment I built up my skillset and started taking gigs. Little by little I kept pushing my income up even after I got a job.
So, you can see that living from paycheck to paycheck is harmful for your financial health. And it doesn’t take so much to escape the money trap.
Let me quickly show you how you can do this.
How to Stop Living Paycheck to Paycheck | 10 Sure Ways
#1. Outline Essentials
The first thing a lot of people do when they get some money is to spend. To be precise, spend unnecessarily. This will only cause more money problems.
On the contrary, you should have a list of the essential items you need and cannot do without. Once you have crossed those items off your list, you can momentarily get one of your wants.
When you list out your essentials, you’ll find out that you will spend less money on certain items that will help you when you want to stop living from paycheck to paycheck.
#2. Get a Budget
A budget is a good way to plan your money. When you fail to use a budget, you make unnecessary expenses which you can avoid.
Creating a budget isn’t really difficult. All you have to do is
- Calculate your monthly income
- Calculate your monthly expenses
- Stipulate a sum for savings
- Keep aside a sum for emergencies
You can create a budget using pen and paper. However, there are applications which make it very effective and easy for you.
According to Nerd Wallet, some of the best budget apps include:
- Mint, for saving more and spending less
- YNAB and EveryDollar, for zero-based budgeting
- PocketGuard, for a simplified budgeting snapshot
- Clarity Money, for all-inclusive budgeting
- Goodbudget, for shared envelope-budgeting
- Personal Capital, for tracking wealth and spending
#3. Eliminate Debt
Borrowing money can help you build your business or even live a comfortable life. However, you must understand that there’s only gonna be a boomerang effect.
You have to discipline yourself to avoid borrowing at all means. However, if you must borrow, use the money for an investment that can yield 2x the income within a space of time.
Ensure you avoid borrowing from financial institutions. Instead, borrow from your family and friends.
#4. Sell Unnecessary Items
I have a friend who can preserve things. I’m sure he could make a lot of money selling those items off but he refues. He’s obsessed with preservation.
Storing unnecessary items just takes up a lot of space and can make your lace look clumsy. It’s better you sell them off for some money before they completely lose their value.
#5. Get another Income Stream
I know it’s not a walk in the park. Making as little as $5 can take a lot from you. But you must understand that it is very important you do something else apart from your job that can provide income.
A good way to start is to source for mediums that can pay you online. And I have just what you need. Read this practical article to get started immediately.
Read more: How to Make Money Online
#6. Live Below Your Income
I know this is not the first time you’re hearing this. You’re probably tired of hearing the same thing especially when your income is not enough.
The fact remains: if your money from your job is not enough, then you should find another job or build another income stream fast.
You see why we outlined the need to build another income stream first?
You can’t really negotiate it. So, you need to keep money aside for investments and other vital decisions.
#7. Save for Investment
Saving is good but when you save without a goal in mind, you’re likely to waste your money. Hence, you should always have a projected savings goal when you make savings.
As you save, you find out that you can access investment opportunities which can boost your income over a period of time. More investment opportunities mean more money for you.
#8. Avoid unnecessary spending
Unnecessary spending is one of the greatest destroyers of your budget. Most times, it’s fueled by peer pressure and a desire to keep up with others.
This is an unhealthy financial lifestyle. Unnecessary spending will only keep you in tight and uncomfortable positions. Do your best to get out of them.
#9. Grow an emergency fund
There are a lot of things you cannot avoid and emergencies are part of them. Majority of emergencies take away a lot of money from you and you must be ready for them.
To avoid this ugly scenario, you must have an emergency fund. An emergency fund is basically an account wherein you throw in money momentarily to address emergencies.
It really takes nothing to start an emergency fund but I promise it is one sure way which shows how to stop living from paycheck to paycheck.
#10. Think Ahead
A good way to go stop going from paycheck to paycheck is to create intentional financial projections. In essence, you have to create a financial calendar stating your current income with the income level you want to achieve.
You can do this on your own or by consulting a financial expert.
Don’t be received. You can have more than one stream of income while you still have your job. It’s very possible, you only need the right guidance.
What matters is you take the bold step to build the stream.