78% of Americans live paycheck to paycheck, which was highlighted even more by the 2019 federal government shutdown, in January. So if you are one the millions of people that is in this situation of living paycheck to paycheck, you aren't alone.
But I know it's not a good place to be in. I was in your shoes years ago. Actually in my situation, I couldn't even afford to pay all of my bills from paycheck to paycheck. I wasn't making enough money.
I was trying to supplement by pay by working side hustles here and there - I was a Zumba instructor. I tried teaching some classes online. But I was still struggling. I just couldn't get out of the whole living paycheck to paycheck cycle.
Then I lost my home to a fire (thanks to my neighbors smoking habits) and lost my job 2 weeks later. But truth be told, every single day, I walked in, I thought about quitting this job. I absolutely hated it. It was horrible for my mental health, but also horrible on my physical health because the basement of the building I was working in was filled with mold and I developed asthma from working there. (But within 2 weeks of being away from this job, I no longer had any asthma symptoms and I was working full time on my parents' dairy farm, which should have set my asthma off all the time.)
I went from not being able to make ends meet every month, to literally having no money coming in at all.
While I was living with my parents because of the fire, I was jobless and had no savings. But I still had bills coming in.
I tell you this so that you can see that I really do understand the living paycheck to paycheck lifestyle. And most of the time, this isn't even by choice.
There are so many people out there who are well educated, but they have to work their way up the corporate ladder to make the money they were promised their degrees would give them.
And the cost of everything has gone up over the years, but the amount that we are paid at our corporate jobs has not kept up with inflation.
What can you do to get out of this cycle of living paycheck to paycheck?
First you need to dig into the real reasons why you are really are still living paycheck to paycheck. Then go check out this article on how you can stop the cycle of living paycheck to paycheck.
Reasons You are Still Living Paycheck to Paycheck
You are only focused on spending money on things that make you happy right now
You are coming home from work after a very stressful day and you stop at the store because you need to pick up a few things for meals for the next few days.
But while you are shopping for your food, you decide to browse other areas of the store that you don't normally go to very often. And this browsing causes you to find this really cute outfit, or a new movie, or new craft supplies.
Suddenly you feel a tad bit better after the stressful day of work. And you buy this new thing that you just found because it makes you feel happy right now.
It's not something that you need. It's not something that is going to advance your life. But you buy it anyway.
When you get home, you start to regret this purchase, because now your stress from the day is back, but you also have more stress from spending money that you most likely shouldn't have spent. I used to do this do too, and sometimes still do.
But you have to learn what your triggers are for when you buy things you don't need, but only want, and especially the ones you only want in the moment.
The best thing you can do here is:
- Pause and actually ask yourself how you are going to use or how often you are going to use it.
- Ask yourself why you really want to buy this right now? (Is it a purchase just to feel a little better about a stressful day?)
- If you buy it now, are you going to regret spending the money in an hour, a day, a week?
- Is this a need or a want or just a want right now? (A want right now means you only want it in this moment, and 15 minutes from now, you aren't going to want it.)
One of the ways that I broke this habit for myself was I would go shopping and go through the store picking up the things I want right now. Then I'd start totally up my total purchases in my cart and that is when I really realized that I don't really want that thing that I thought I wanted. It was a want right now kinda thing and back on the shelf it went.
Also realize how is this purchase going to help you down the road. Is it just going to accumulate in the clutter that you have in your house? Or are you going to use it regularly?
"I Deserve This" Mentality
I like to think of this as entitlement. Not everyone has this way of thinking, but there are still a lot of people that do have this way of thinking.
Sometimes this way of thinking means that you had a hard day and feel you deserve a reward for what you endured. Other times this means that it's just something that you need to have.
But this way of thinking does nothing for your money and honestly it keeps you stuck living in the paycheck to paycheck mode. No one else can change this but you.
You have to realize that while you may deserve this thing today, is it really going to serve you? Is it going to leave you enough money in the bank at the end of the month to pay all of your bills?
You Don't Create a Budget
Yes I know budgeting isn't fun. And sometimes it can feel restrictive.
I used to think that I didn't need a budget either. I'm an accountant and I have a very good memory. So I would keep a running tally in my head of my spending and regularly log into my bank account to keep an eye on it.
But every single month, I was always missing the little purchases, like a Gatorade or a candy bar or a snack. And these purchases add up. But they never got added to my tally that I was keeping in my head until I saw them go through my bank account.
Those little purchases really do add up, because you think you aren't spending very much each time, but you make quite a few of these little purchases each month and suddenly you are spending money that was earmarked for a specific bill.
By creating a budget, you know where your money is going. And you also keep track of the money that you spend so that you know how much you are spending on those little purchases before it starts taking money from a specific bill that you have to pay.
Convenience is so Much Easier
It's true that the convenience of eating out, having your groceries delivered or getting an Uber is easier. But is it easier on your wallet?
I agree that having groceries delivered may be easier on your wallet because when you are at the store, you are walking around and see something that looks good to make for dinner tomorrow, or you are hungry while shopping so you pick up snacks that you can dig into when you get back to the car.
But for grocery delivery, you also have to consider the cost of having your groceries delivered. Are there monthly fees to keep your membership? How much does each delivery cost?
I'm a person who doesn't like to cook. But I do cook because it's so much cheaper (and healthier!) to make my own food than to eat out. I also keep learning of new food allergies that I have, so it's now easier for me to prepare my own food at home.
Going to a restaurant is so much easier though. You don't have to spend the time cooking. You don't have to clean up the pots and pans and dishes. But can't you also make a similar meal at home for much less than what you are buying it for?
At the end of the day, which is really easier - the convenience of having someone make your meal and clean up, plus also paying for your meal OR spending less on your food and preparing it at home, even if it does mean that you have to clean your kitchen too?
You Get Jealous of What Someone Else Has
Someone else is always going to have something different from you. But it still doesn't mean that you have to have it yourself.
You don't know what anyone else's financial situation is like. So you can't compare the stuff that you have to what someone else has.
Plus that thing that you see that someone else has, do you really want it for yourself? Or do you want it because of the fear of missing out since someone else has it and you don't?
My brother always comes to mind when I think about jealousy. He had a tiny little car, but a friend of his had an SUV. So my brother had to trade in his car for that same SUV. Then after getting the SUV, he drove someone else's vehicle that was newer than his and more updated and he decided that he needed to get a newer vehicle again. The whole time, he was perfectly fine with just car. It did everything for him that he needed it to do. But he was jealous that someone else had something that was nicer and newer than his. So he had to keep upgrading and spending money that he didn't need to spend.
You aren't missing anything by not keeping up with everyone else around you and buying the latest and greatest out there that is available. If what you have right now is doing the job that it's doing, then stay where you are and use what you have.
Not Having Financial Goals
You may set financial goals on January 1st for a New Year's Resolution. But by the end of January, you totally forgot about your financial goal. Am I right? Most people that set New Year's Resolutions abandon them by the end of January. And most goals have to do with money and fitness.
But it doesn't matter if it's the beginning of a new year, the beginning of a new month or even the beginning of a new week, you can set brand new financial goals right now. Read this article on setting your financial goals to dig into this more.
Your financial goals could be as simple as saving $5,000 in the next 365 days or by December 31 of this year. You could plan to pay off all of your debt in the next 365 days or put a different time limit on it.
I like to set a goal for how much money I'm going to make in one month, and then break it down into weekly goals. You don't have to set financial goals to be a one year period. They can be much smaller.
These are your goals, no one else's, so you make the rules with the goals that you set. Do what works for you with your goal setting. But set financial goals so that you have something to work towards with your money.
Refusing to Plan for Emergencies
You've heard it said, you've read it all over the internet, but yet you still haven't built your emergency fund. Don't tell me that it's too hard. I was where you are.
I didn't have an emergency fund for the longest time either. But not having the fund is more stressful than having to use the funds you have saved up in it.
Or maybe you do save your emergency fund, but every time you get it fully funded, an emergency happens so you have to spend that money? It happens. Just start rebuilding the fund again and also check out this article on what happens after building your emergency fund and emergencies keep happening.
What if something happens, you lose your job or you have to quit your job for mental health reasons or you get sick and can't work and therefore you don't get a paycheck from your job?
Having an emergency fund allows you to have a little peace of mind when you live paycheck to paycheck and an emergency does happen.
You can also check out this article on how to start building an emergency fund even if you are broke.
Not Planning for Vacations or Quitting Jobs or Just Having Fun
When you create your budget and build your emergency fund, are you also building in a fund for your vacation or for just having fun? Or what if you have to suddenly quit your job because of a health issue? Do you have the funds just laying around for this to happen? Or are you going to have to use your credit card when something like this happens?
When you build a fund for vacations, for having fun, or even for quitting your job, you have more of a peace of mind that you are taken care of, even if it is only for a short period of time.
Living paycheck to paycheck isn't fun. But when you build that vacation and fun fund, you are able to still enjoy your life while you work hard to get out of your cycle of living paycheck to paycheck.
Now tell me, what other reasons that I have listed here are keeping you living paycheck to paycheck? And what are you going to do to start making a change?
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