I know the pain of living paycheck to paycheck. Only the one who has experienced it know how suffocating it is to live like this. Nothing feels good, and nothing in the world can positively change your mood. But you know what? It’s possible to change. It’s possible to come out of this misery.
Hence, to address this issue, I have created this simple list of how you can actually not only start saving money, but also make money when there’s an opportunity. I hope you get some good value from this…
(1) Embrace Lean Lifestyle
When your life has filled with clutter, and everything feels messy AF, what do you do then? If you go on with the situation and let things be, then you’re doing it wrong. Getting rid of clutter is the first thing you must do. Clean your surrounding. It might feel like a lame advice until your actually do it yourself.
You’ll surprisingly feel at ease, and it might also help you release stress and anxiety. The next step is to start following a lean lifestyle. And, since you have gotten rid of all the clutter, you’ll automatically feel good about working towards something.
Following minimalism and living a frugal lifestyle can literally change your life. It’ll teach you to how to spend life with the most minimum things. Be it money, or anything else… Following a lean lifestyle is especially helpful when you’re living paycheck to paycheck.
(2) Budgeting Won’t Work
I’ll share a harsh truth now: Budgeting worn’t work unless you’re earning good enough. Budgeting is a great idea, and it is a proven method that actually helps in balancing financial situations, but budgeting is hard when your earning is way too low.
It’s even harder if you’re plagued with impulsive spending. Hence, before making a budget, start working on your bad habits. Most people have a hard time with money because they have bad financial habits. In the worst cases, these same little bad habits end-up destroying their life.
So, what are you waiting for? Start working on your bad habits, and when you think you’re ready, create a good budget. You may, or may not go hard mode, but remember this one thing: Short-lived pain is pain, and long-lived paid is suffering. Hard mode can squeeze too much money out of you, but it’ll be short-lived, but if you go easy on yourself, there’s high chance you’ll live in suffering.
(3) Keep An Accountability Partner
Being accountable of something helps you look at life completely differently. Be it anything. Being accountable makes you responsible. If that’s the case, then how can being accountable help you save money?
The thing is… When there’s someone to repeatedly remind you about your bad choices, and hold you responsible for the negative affects of your choices, things will automatically start changing in your life. And, when someone repeatedly holds your responsible for something, a day will come when you’ll automatically become responsible about your life’e choices. Yes, this also works with financial decisions as well.
In fact, it’s actually the best to keep an accountability partner when you’re living paycheck to paycheck. Because you only have enough money to spend on the most important things.
(4) Fight Lifestyle Creep
Also known as lifestyle inflation, lifestyle creep has become a real problem in the past few years. Thanks to uncontrollable inflation and stagnant salary. When something like this happens, you’re only left with two options: (1) Increase earning, (2) Limit expenses.
Most people lose the fight with finances because lifestyle inflation creeps in their life. Rather than increasing savings with increasing earnings, they choose to spend more. While everyone loves prosperity when earnings increase, they hate when earnings go down. And, since there’s already a habit of spending more they can’t put a hold on their spending.
If you’re plagued with lifestyle creep, then it’s high time you start controlling it. Because if you don’t, you’ll never successfully save money for future, and also never come out this paycheck to paycheck life.
(5) Embrace The Latte Factor
The term “the latte factor” is taken from a book of the same name. The book describes how even small expenses when done repeatedly can harm your long term financial savings. David Bach (the author) uses the word latte because he takes coffee as an example of small expenses.
And, he is so right. .. For example, if you spend $5 every day on coffee, that’s $150 every month. Honestly, $150 might not seem a lot, but when you’re short on money, even $10 matters. I won’t extend this section a lot, but learn this… The latter factor follows a simple principle: Small expenses can have big impact.
(6) Get Rid Of Unnecessary Subscriptions
A strong hunch hit me while I was learning more about the latte factor. It’s about how all our monthly subscriptions can also be an insidious expense, and an example of the latter factor. That day, I sat down and calculated the total money I was spending on subscriptions. Honestly, I was surprised, and immediately started getting rid of most of them.
As of today, I only have two subscriptions, and I’m happy with it. Check if you too have such subscriptions, and if you find any, start getting rid of them. Of course, if you actually find help with those subscriptions, then you should keep it, but if you don’t, you know what to do with them.
(7) Review Daily Expenses
By now you know all the ways to get rid of bad habits, and save money. From here onwards you’ll learn how to slowly increase your net worth, and that too without stressing your finances. But before you move ahead, here’s one last thing I want to recommend you: Review your daily expenses.
You’re doing great with your finances now. That’s nice. But, to keep this streak intact you’ll have to track how much you’re spending and saving. If you’re leading in the latter, then you’re fine. If not, then you should return to track before things go absolutely wrong.
I will recommend you to review you daily expenses. If not, then at least please review your budget expenses every week. Trust me, it’ll actually help you in in the long run.
(8) Use 0% Interest Credit Card
Though I’m often against using a credit card, but if a credit card charges 0% interest, then I’m often somewhat interested. Credit cards are good, and a lifesaver, until your don’t pay on time, and also don’t follow the rules. Behind any broke person, credit card always has a big role to play.
Honestly, I don’t want to talk about credit cards a lot, since I have really bad memories with credit cards. But, if you’re interested, search for 0% credit cards from Visa, or from reputed banks like Chase and see whether they can provide good deals for you.
(9) Autosavings FTW
Autosavings are a lifesaver when you have no control over your finances. By now, I believe you have become better than before in money management. If no, then there’s still time. Try harder and see what’s going wrong. After looking at everything, even then if you’re not able to control your finances, then there’s only one option left: Autosavings.
Nowadays, autosavings has become pretty easy. In fact, way too easier than before. Today, you can download an app and start autosavings into mutual fund, Government bonds, stocks, or anything you would like. You can treat those investments as emergency fund, or for retirement savings. Initially, you’ll feel the pain seeing your money getting deducted, but at the times of emergency, this same savings will come for your help.
(10) Market Your Skills
Finally, trying to increase your income is another way of coming out of this paycheck-to-paycheck hell. Today, doing more than one job has become common. More common than before, in fact. Why so? The first reason is uncontrollable inflation, and the second is, often, lifestyle creep.
I have seen some millionaires living paycheck to paycheck. Even though they have multiple businesses, they still live life just one step away from a financial disaster. This is a classical example of bad financial decision. Right now you’re not a millionaire, but you’ll not broke too. Which is good. Start some side hustles and see how much can you earn.
