“I just have to make it to Friday.”
We’ve all uttered that phrase at some point. Living paycheck-to-paycheck is common for 63% of Americans. Living paycheck-to-paycheck isn’t a sign that you cannot manage money. It just means that the amount of money you spend in a month is equal to the amount of money you make in a month.
There’s not much wiggle room. Over time, it becomes a cycle. Cycles are hard to break.
Sometimes these cycles start because we’ve been dealt a certain hand of cards and have to make do. Other times, these cycles start because we’ve made a mistake or gone through a rough period. The good news though, is that you can stop the cycle of living paycheck-to-paycheck.
Here’s how I stopped living paycheck-to-paycheck.
I Started by Looking at My Finances
We all know that skipping Starbucks just doesn’t cut it. For starters, you weren’t eating at Starbucks regularly, to begin with. Plus, you still deserve to treat yourself occasionally. Instead of punishing myself, I decided to look at my current expenses to see where my money was really going.
I looked at my income in a month. For me, that means a full-time job, and the occasional odd job on the weekend. I’m not afraid to mow my neighbor’s yard if it means an extra $25.
Then, I broke out an excel sheet and started listing my expenses in a month. I considered which priorities to me were.
- Transportation costs (including car care)
- Debt payments
Each month, we use way fewer phone data than what we pay for. So, we decided to hop down to a lower phone plan. I also realized that we pay for a streaming TV service we haven’t used in months, so I dropped it. Finally, I realized that going out to eat is important to me, but if we just cut back on one fast dinner and drink a week, we could save more.
I took the money that normally goes into those expenses and put it aside. At $65 a month, that’s not too bad.
After Looking at My Debt, I Cut Up My Credit Cards
I’m pretty good about paying my credit card for the most part. Unfortunately, I made some mistakes a few years back, and I’m still facing the effects. For starters, my credit score took a big hit. I lost almost 200 points three years ago! Plus, I managed to rack up a lot of debt, and I’m still paying it off.
After looking at my debt, I decided to cut up my credit cards. I don’t want to feel pressured to use cards, even in an emergency.
In addition to the credit card debt, I have other debt as well. I was able to consolidate my debt. That was a big help. The rate is down, and my debt is just one monthly fee instead of several.
I Got Smart About Emergencies
Emergency expenses happen. Towards the beginning of my savings journey, we found out my daughter is allergic to strawberries. She’s fine, but we had to take her to the emergency clinic when she first had her reaction. Even with insurance, those visits can be quite pricey, and it’s not an expense that can wait until Friday.
When I got the bill, I already knew there wasn’t enough money in my bank account. I’d have to pay an overdraft fee unless there was a better alternative. I did a little price compare and found that some personal loans actually cost less than overdraft fees. If I’m going to get nickel and dimed, I’m at least going to go the route of lesser evil.
If you have other options, like borrowing money from a friend or family member, or you have good credit, go that route. But when you’re in an emergency, breathe, think, and choose the best solution at that moment.
Spring Encouraged Me to Clean Out My House and Sell Old Items
There’s nothing I hate more than clutter. Spring cleaning is essential for me. Having a more organized house was the real benefit but pocketing $230 in the process was definitely a plus.
I went through my home and found items we no longer use. The items were in good quality, and deserved to go to a good home, rather than being thrown out. Setting up listings for these items on Facebook Marketplace and Poshmark were easy.
After a couple of months, I’ve made about $47 from clothes and costume jewelry so far. With my kid’s permission, I sold some of their old toys and electronics and made $77. Going through my kitchen and dining room, I found a pasta maker, china set, and fondue set we never use.
Between these three items, we made $53. After the dining room, we decided to work on the garage. My youngest boy just outgrew his bicycle, so we sold it for $20. My husband found some old work tools and sold them for $33.
I Set Up a Savings Account
This has been the best decision yet. After about three months, I opened a savings account. I took the $230 I made from selling items, $195 from saving on expenses for three months, $37 from a jar collecting change, and $39 from my recent paycheck and put it into a savings account so I would have just enough to not be charged a service fee.
Before picking a bank, I researched several and found one that would give me cashback if I kept a certain amount in there and continued to grow it over the course of several months. I did the math on how much I could save each month and found out I should land just a little over their requirement.
I found that this savings account puts pressure on me to avoid making withdrawals for a few months. I think that’s just enough time for me to practice better financial habits and get more into a routine.
Did you know that most Americans don’t have $1,000 in savings? Having savings is crucial to help cover emergency expenses, as well as unexpected bumps in life. It helps protect you from having to use a credit card or take out a loan. My goal is to have $1,000 saved up by the end of the year. Do you think I can do it?
Working More Has Kept Me Busy and Helped My Savings
I’ve always done odd jobs here and there. I mow my neighbor’s yard about twice a month, I bake the occasional cake, and I even sew. A lot of these started as hobbies, but friends kept wanting to pay for things I created for them. I’ve only ever made a few bucks here and there. So, I decided to get more involved.
I went to social media and started showcasing what I had been working on. I started bringing up a lot of these projects in conversations with friends, family, and neighbors.
Already, I’ve found a new business. One friend asked me to make a cake for her daughter’s birthday for $50. Another neighbor has asked if I can mow their lawn once a month. A few individuals online have even asked for pricing for a knitted blanket.
I think with vaccines being more available, and cities reopening, people are wanting to spend more money. I might as well take advantage of that opportunity.
I find that when I’m busy, I actually find more time in the day. My days seem more productive, and I feel more focused. I think these new projects will help me stay sharp and will help bring in more cash.
I’ve Decided to Stop Living Paycheck-to-Paycheck
I got tired of no-spend days and finding myself in situations where I could only breathe a sigh of relief on payday.
I’ve found that as I’ve started this process, my brain has started to rewire. I’m thinking differently and noticing where I’m spending, and how much I’m paying.
Picking up extra work has kept me busy, and I find myself shopping less. When I go to the grocery store, I’m comparing prices. I’ve become conscious of leftovers.
I don’t think we’ve thrown out food in the last month. We’ve been eating all the food in the fridge before it goes bad. Honestly, I think I’ve been able to save money on groceries.
Instead of living paycheck-to-paycheck, I’m now starting to live fully. Honestly, it’s so freeing. If I can do this, you can do this too.