Do you live paycheck to paycheck? If so, you’re far from alone. A 2022 CNBC article found that, in the United States, more than 60 percent of adults live like this. I too was one of them, but I found my way out. What can you do to achieve liberation and financial stability?
Here are my top methods for pulling yourself out of the paycheck-to-paycheck lifestyle:
- Make a budget
- Save whatever you can whenever you can
- Plan meals ahead of time
- Focus on paying off your debts first
- Take on a side hustle
- Cut back
- Sell what you don’t need
- Anticipate the unexpected
- Watch out for lifestyle creep
- Stay motivated and positive
If I was able to find my way out of the gut-wrenching, stressful situation that is living paycheck to paycheck as a single mom, then you can too. These 10 tips will get you there, so keep reading!
10 Tips for Financial Freedom from the Paycheck-to-Paycheck Lifestyle
Make a Budget (and Stick to It)
A budget is sort of like a New Year’s resolution. You can say something at the time, and it feels good because you think you’re going to achieve your goal.
Then, time does its dance and suddenly, you find yourself unable to fulfill that goal you had made for yourself.
What I’m saying boils down to this. Setting a budget is one thing and sticking to it is another entirely.
If you’ve tried and failed at budgeting (and trust me, I’ve been there), it’s a good idea to ask yourself why that is.
Is your budget too small to be realistic? Do you want to treat yourself or the kids at the end of a long week, so you overspend?
Do you find that a lot of bad things happen all in a row, like your car having trouble, your kids having a big art project you need to buy supplies for, and your sink leaking in one week?
Whatever budgeting troubles you’ve had in the past, consider them now as you plan for a financially brighter future.
Once you stick to a budget for a week, you’re going to feel so good about yourself. The longer you can follow your budget, the more money that ends up in your pocket.
Budgeting has its rewards, but you have to be patient!
Save Whatever You Can Wherever You Can
This is a small tip that can pay back huge dividends if you only give it time.
Take an empty jar for savings. Then, add whatever you can when you get a chance.
Perhaps that’s the few cents you scrounged up when you cleaned the couch or the couple dollars’ change from the last time you were out grocery shopping.
A few dollars here and there might not seem like much. And at first, it isn’t.
If you keep it up though, a magical thing will happen. Those couple of crumpled dollar bills will turn into hundreds. The loose change will become bills.
You’ll have a significant sum of money in that jar that you can then funnel into other areas of your life.
Plan Meals Ahead of Time
You thought only gym freaks meal-prepped, huh? That’s not true! You can do it too, and it’s a great way to get out of the paycheck-to-paycheck life.
Let me talk about the importance of meal prep with a bit of a setup. How often do you wake up in the morning and defrost the chicken or steak full of good intentions to cook it later? Probably several times per week, right?
And how many of those days do you come home from work feeling dog-tired and uninspired to cook? Or you’ll announce dinner, and the kids will fight over your meal choices?
You then do what a lot of busy single moms with hungry kids do. You pile everyone into the car and get takeout, or your order a pizza.
Fast food may be fast, but it’s anything but cheap, especially if you eat it several times per week.
This New York Times infographic compares the cost of a meal at McDonald’s to a home-prepped salad dish.
The cost of two small Cokes, two medium Cokes, two small fries, two medium fries, one six-piece Chicken McNuggets meal, one cheeseburger, and two Big Macs cost $27.89 according to the infographic.
The home-cooked meal of salad, potatoes, and chicken for four with milk cost $13.78 and is far healthier.
This infographic is from 2011, so you can only imagine how much costlier it is to dine out in the 2020s. Food prices are bonkers!
All this is to say that when you prep your meals ahead of time, you won’t have to wonder what’s for dinner when you have six work obligations on your plate and it’s already 3 p.m.
You’ll save money, and your family will be healthier too.
Focus on Paying Off Your Debts First
Once you have a bit of extra money padding your pockets, you’re going to feel pretty darn proud of yourself. As you should!
Where that money goes can help you out of your financial pit, so you have to spend it carefully.
I recommend focusing on your debts. I know, it’s not fun to pay off debts, whether those are student loans, home refinancing, or credit card debts, but it’s the adult thing to do.
This was part of my strategy for finally escaping the paycheck-to-paycheck lifestyle, and it was quite effective. That’s why I want to share it with you.
The thing about debts is that they only grow with time. No, not the amount on the debt, but the interest. The longer your debts go unpaid, the more monstrous those interest payments are.
It’s the interest that kills you, especially when it amounts to hundreds or even thousands of dollars.
When you prioritize paying off your debts, it can mean waiting to fix that leaky sink for a while, which sucks. Your leaky sink has been that way for months though, and the sink cannot accrue interest.
Take it one debt at a time. I started with my credit card debt because who doesn’t have that, right?
One by one, I got my credit card debt under control. Without any interest payments hovering over my head, I suddenly had more money to work with each month.
Take on a Side Hustle
What if you don’t have more money to work with each month even after getting your debts under control? I know that feeling all too well.
Perhaps your current job made you enough money before you had kids or moved into a bigger house, but nowadays, you’re just barely making ends meet with that paycheck.
You could always discuss a raise with your boss, but that may or may not work. You can also look for a new job, but that’s an upheaval of your entire life.
Before you do anything super drastic, why not consider a side hustle? (Unless you hate your job. Then, by all means, start looking for an upgrade!)
Side hustles are all the rage these days because life is only getting more expensive. With a side hustle, you can bring in some extra cash to pay your bills or start saving up.
What kind of side hustle should you pursue? That’s up to you! You could drive for Lyft or Uber, start an Etsy shop, or maybe even write a blog like I’m doing here.
I recommend looking at what you’re good at and starting from there. Most skills are translatable into side hustles, which is one of their biggest perks.
You also have to consider how much time you have to devote to a side hustle. If you’re a single mom like me who juggles dozens of responsibilities at once, I wouldn’t have time to drive an Uber. Plenty of side hustlers do though!
Just make sure that whatever side hustle is calling your name that you take some downtime for yourself too. If you burn out, then you’ll have more problems than waiting until the next payday to take care of your bills!
Even if you think you live a meager lifestyle, I’m sure it can be meagerer.
You don’t even realize how expensive some of your habits can be until you sit down and tally them up, so that’s what I want you to do.
Go through everything you spend money on per month, including disposable income (especially disposable income). Include your Starbucks runs, your Netflix subscription, and that gym membership you’re always too busy to use.
Although you’re spending fewer than $10 on your daily Starbucks runs, if you do five of these runs per month, you now realize exactly what you’re spending.
Once you have your list of where your money is being allocated, it’s time to decide what you can cut back on or cut out entirely.
Maybe you can start brewing coffee at home once or twice per week so you’re only going to Starbucks once a week or once every other week.
I’m not telling you to strip your life of all joy to save a buck. That’s going to make your miserable situation even more miserable, and plus, the kids will be complaining all the time.
You can keep Netflix, but if no one is watching Disney+ (don’t you love it when the kids outgrow things?), then why are you still paying for it?
Sell What You Don’t Need
Here’s another option that can help set you on the path to financial stability. Sell some things!
I’m sure if you went through your closet right now that you’d find several items in your wardrobe that you haven’t worn in several years. Maybe you’re waiting for that blazer to come back into style or your old pair of jeans to fit.
Most home improvement websites will tell you that if you haven’t worn or used something in a year, you probably aren’t going to again. If your old wardrobe is still in good condition, then sell it!
Look at your kids’ stuff too. I would never tell you to sell off any of your children’s current toys or clothes, but what about those toys from that fad TV show that the kids got sick of in a month? Or the old shoes that they won’t ever fit into again?
These things are just taking up room in your home when they could be making you money.
Whether you use Depop, Facebook Marketplace, eBay, Poshmark, or Tradesy, you have countless options for offloading what you don’t want and making money doing so!
Anticipate the Unexpected
You can’t prepare for the unexpected because well, it’s unexpected.
That said, there’s a difference between going through life assuming that nothing will go wrong and anticipating that something could happen and feeling ready.
If you don’t already have the latter attitude, you need to start. You’re usually advised to have a nest egg or a rainy day fund that can go towards emergencies. That can be hard to do when you’re living paycheck to paycheck.
What you can do instead is save a little bit of what you’re making because you know it’s going to go towards something that wasn’t in the plans such as a new tire for your car or soccer equipment for the kids.
Watch Out for Lifestyle Creep
If you follow some (or all) my tips to this point, then your paycheck-to-paycheck days will finally be behind you.
At first, you’ll think it’s just a fluke. Then you’ll realize that wow, you have indeed achieved financial liberation.
Now you have to watch out for a unique issue that only those who have more money in their accounts have to worry about it. It’s known as lifestyle creep.
Lifestyle creep is the premise that as you have access to more money, you’ll in turn spend more money.
As I’m sure you can imagine, lifestyle creep can cause you to fall back into your paycheck-to-paycheck life faster than you can say “where did all my money go?”
The best way to combat lifestyle creep is to follow a budget. You can increase your budget moderately now that you have more money, but the key is to keep some of your cash in savings.
Stay Motivated and Positive
Is it easy to escape the paycheck-to-paycheck life? If it was, do you think that more than 60 percent of Americans would be in this mess? Of course, it’s not easy.
You will have days when you had a tough week at work and all you want to do is splurge. You might have to turn down the kids sometimes when they want the next extravagant toy because you just bought them the last extravagant toy.
You will be in for some difficult moments, and I don’t want to downplay that. When you find yourself feeling especially financially frustrated, remember why you decided to do this in the first place.
Imagine how much less stress you’ll have on your shoulders once you have more financial freedom. Think of how nice it will feel to know there’s some money in the bank in case your leaky sink finally does give out on you.
These thoughts will motivate you to continue on the path you’re on.
Oh, and do your best to stay positive too, especially if you have children. Remind yourself that although it’s not easy, the responsible saving and spending habits you’re modeling now could inspire your kids to be better with their money way down the line!
When you’re living from one paycheck to another, the stress and pressure feel like it will never end. I’ve been there, done that. I’m here to tell you that there can be a light at the end of the tunnel.
With the 10 tips I’ve presented for you here today, you can begin saving more, spending less, and working your way to financial freedom one day at a time