7 Tips to Break the Paycheck to Paycheck Cycle and Save More

This post may contain affiliate links. I may earn money or products from the links in this post at no additional cost to you. Please check out my full disclosure policy

Hey guys! I am so excited to announce my first guest post by writer Mia Jones! She has written a wonderful article about how to break the paycheck to paycheck cycle. So many of us struggle with this on a monthly basis! Read 7 tips below on how to break this cycle!

Do you count days for your next paycheck every month? If so, then my dear friend, you’re probably living paycheck to paycheck. It is not at all good for your finances. If you don’t break this cycle, you won’t be able to save and build a better financial future.

Now answer another question, do you have an emergency fund? Probably ‘no’! Then what will you do if your car suddenly breaks down or you’ve got to do important maintenance work at home?

Therefore, you should have an emergency fund so that you don’t fall into debt if there’s a financial emergency.

So, let’s check out how to save when living paycheck to paycheck so that you don’t fall into debt; and, if you’re already in debt (since the chances are quite high for such a lifestyle), you can pay it off.

1. Plan a budget to track expenses and save

Planning a realistic budget is the first step so that you know how to spend your paycheck in the right way. If you’ve never planned a budget, you can follow the 50-20-30 budgeting strategy. Allot about 50% of your paycheck for your needs. Then, set aside 20% as your savings, and plan your wants with the remaining 30%. When you’re trying to break the paycheck to paycheck cycle, try to save an amount from this 20% too. You can set up automated savings to save 20% of your paycheck directly into your chosen savings account.

Planning this budget will help you track your expenses and cut down on spending.

However, you won’t be successful in the first month. It will take some time to plan a realistic budget that can help you save a significant amount every month.

2. Track every penny so that you don’t overspend

Continuing with the last point and talking about tracking expenses, I would suggest that you write down every purchase. Doing so, you’ll know how you’re spending every penny.

Also, check your account statements every month to get a clear picture.

If you wish, you can also use an online budgeting app. You might get an app that you can use free of cost.

Analyze your expenses every month and highlight the items where you think you overspent. You can take care of such expenses in the following month and thus, make your budget successful.

3. Try to curb your lifestyle a bit

Forget about keeping up with the Joneses. Do not compare your lifestyle with others and stop imitating others. You won’t have to throw a lavish party because your friend invited you to one last month. You can very well arrange a potluck party. Focus on your financial life first.

You can cancel your gym membership along with other subscriptions if they’re not necessary. That doesn’t mean you’ll have to stop exercising. You can always use a free gym in your community or opt to workout outside when the weather is pleasant.

Likewise, restrict your eating outs and carry your lunch to work. Make cooking a family affair and enjoy good family time too. In fact, I would rather suggest to plan your meal in advance. Because with the help of proper meal planning you can not only simplify your life but also save a good amount of money every month.

4. Downsize your home and sell your extra car

If you’re facing a problem in making your house payments, then downsizing your home can solve this problem to some extent. A smaller home usually will lower down your monthly home loan payments as well. Moreover, the maintenance cost will also be comparatively lower.

Likewise, if you have an extra car, you can sell it off. If you’re married, try to share one car with your spouse. Doing so, you’ll save a lot on gas payments.

If you don’t want to downsize your home, you can rent an unused portion of your house too. Rent a garage space, rent a guest room, etc. without compromising your privacy that much.

5. Restrict yourself from acquiring further debt

List items when you go shopping. Often we buy extra things if we don’t have a list. I would say to carry a list even when you go shopping for garments. It will help you to avoid buying things you don’t need.

You will also have to distinguish between your needs and wants to break the paycheck to paycheck cycle and save a decent amount every month. So, the next time when you think about purchasing something, ask yourself whether or not you actually need it. And if you really do, save the money to buy it instead of instantly swiping your credit card for that purchase. It may also happen that with time, you won’t feel the urge to buy unnecessary stuff anymore.

At least for a few months, when you’re struggling to break the paycheck to paycheck cycle, avoid using credit cards as much as possible. This will prevent you from acquiring further debt. Also, try not to take out a mortgage or a car loan during this pereiod; otherwise, it might be difficult for you to manage the monthly payments, and in turn, you may again acquire debt.

6. Try to earn a little extra

Ask yourself what you’re good at and what you love doing. You can work part-time or look for online part-time strategies to earn a little extra. An extra income always helps to break the paycheck to paycheck cycle. You can invest this extra income for a better financial future.

You can give online tuitions, take online surveys, start blogging, babysit pets, and so on.

Doing so, you can earn in your leisure time.

7. Plan a strategy to solve your debt problems

If the reason for your paycheck to paycheck cycle is debt payments, then you need to tackle that first. How will you do so? Only saving money won’t do. You’ll also have to select a suitable debt payment strategy depending on your financial situation. If you think you can’t repay the debts in full, you can opt to settle your debts. Doing so, you can solve your debt problems by paying less than what you owe. However, it can hurt your credit score a bit. Alternatively, opting for consolidation can give a boost to your credit score since you’ll repay debts in full. If required, you can talk to an experienced person to choose a suitable debt payment strategy for you.

As I mentioned at the beginning of this article, you need to have an emergency fund. So, the amount, you’re able to save by following these tips, deposit a portion of it into your emergency fund. Try to have at least 5-6 months’ of your living expenses in this fund. And, make sure you don’t use the money unless it’s a dire emergency like a sudden car repair or a medical cost. And, when you use the funds, try to replenish it as soon as possible.

So, break the paycheck to paycheck cycle, have an emergency fund, and invest for a better financial future. You’ll surely have a rocking one!

Have some ways that you love to save money? We would love to hear about them! Drop a comment and share all your money saving secrets with us!

Author Bio: Mia is a freelance writer. Traveling and writing are her passions, and she uses articles as a platform to share her vivid experiences. She explores various topics on personal finance, frugal living, minimalism, etc. in her creative endeavors. Her mission is to help others find ways towards a healthier financial life. Follow her on Twitter at @MiaJone96792889

Business Directory