How To Stop Living Paycheck To Paycheck

The vast majority of people are not able to take care of a $1,000 emergency if one came up.

Maybe a pipe bursts and you need someone to quickly come and fix it,  a tire blows out and you need a new one, or a last minute emergency room visit is needed for one reason or another.

Something always comes up, and hopefully you’ve spent the time to save up and even fully funded an emergency fund.

Even without an emergency coming up, it can seem overwhelming paying bills every single month, and never having anything left over.

Whatever the ultimate goal is, here is how you can stop living paycheck to paycheck and start truly living your life.

Start Small And Snowball

Every dollar counts.

When you are trying to start saving money and have some set aside for your future it will feel like you aren’t doing anything.

Setting up a $10 a week automatic savings isn’t much, but setting it and forgetting it is the first step. If you’re able to set up an automatic savings of $100, or even $1,000 then great, but even $1 is a step in the right direction.

Whatever you can afford, just start, don’t psych yourself out thinking it’s not enough, that it will never amount to anything. Having forward movement will help you want to save more.

Even if you never increase your savings, with enough time and putting the investments in the right place, you’ll snowball that savings into a huge nest egg.

Side Hustle

Starting a side hustle is the best way to get ahead and stop living paycheck to paycheck. There are two different types of side hustles you’ll want to consider.

First, you have side hustles that make money right away. Things like driving for Uber or Lyft, delivering for Doordash or GrubHub, or even getting a second job allows you to make money the same day. The issue with this type of side hustle is that there isn’t room for growth in them, you can work as much or as little as you want.

The second type of side hustle is one that you can start small, maybe even not making any money for a while. Things like freelancing, starting a blog, selling things online, or anything else that you have full control over.

What we like about the second type of side hustle is that it could eventually become your main focus, or at a minimum your part time job in retirement.

Having a side hustle can help you save more money, and finally stop living paycheck to paycheck.

Get A New Job

The best way to get a raise doing what you do is to get a completely different job.

At the end of the year you may get a raise, the last one I got was roughly $600 extra a year less than 1.5%. Now, I was grateful to get more money for doing the same job, at the same time inflation is eating more money than ever before.

On the other hand, getting a new job can likely get you a raise of 10% or more meaning thousands of dollars a year.

It’s unfortunate, it makes sense to keep good employees by incentivising them with more pay, but the truth is that it’s far easier to make more money by switching companies and doing the same job for someone else then it is to try to get a larger raise from where you currently work.

Make A Solid Plan

Regardless of what you choose to do, or both, you need to sit down and make a plan.

First, create a budget, so you know where your money is going to go, and make sure you have a section on savings, make savings a priority.

After you have a budget, make sure you are already making enough to cover your expenses, if you aren’t then you need to get a new job, start a side hustle, or both.

After you have everything in place, plan out the next 5, 10, 15, and 20 years. Do you want to travel more, pay down debt, or finally get into a house you own?

Whatever you want to do, take the time to put it on paper, and work backwards from that.

Having a solid plan for getting out of the paycheck to paycheck grind is the only way you’ll ever get out of it.

Debt Is Your Enemy

It is impossible to stop living paycheck to paycheck while still in enormous debt.

If every extra penny you make goes towards paying for yesterday's spending spree you’ll never get ahead.

So if you are in debt, now is the time to do all you can to get out of it, and then use the same strategies you use to get out of debt to grow your nest egg and stop living paycheck to paycheck.