HOW TO STOP LIVING PAYCHECK TO PAYCHECK

Person putting coins into a jar

Living paycheck to paycheck is more common than you may think. According to this website, over 65% of Americans are living paycheck to paycheck and would struggle to get by if their paycheck was delayed by a week. Why is living this way dangerous? And if it’s so bad, how do we stay away from it? Keep reading to find out.

Why is living paycheck to paycheck so bad? If relying on your paycheck gets you by, some may wonder what the big deal is. Sure, it can be stressful, but it works, right? Wrong.

  • You aren’t guaranteed your job.

Many people find themselves in the unexpected situation of losing a job, and once that happens, there will be no paycheck to live off of.

  • You can’t build an emergency fund this way. 

Living paycheck to paycheck makes it nearly impossible to build up an adequate emergency fund. This is something you should have in case something unexpected took place, like an accident, unexpected car issues, etc.

  • It takes a toll on you emotionally.

Living with the stress of not having a backup plan can really have an effect on a person. This stress isn’t good for you mentally or physically!

So, what can I do to stop living this way? You now realize the dangers of living paycheck to paycheck, so it’s time to talk about what you can do to either avoid it or start getting out of it.

  • Use automatic savings. Having your savings taken out automatically instead of attempting to save whatever is left over makes a big difference. You’ll be less tempted to spend your saved money and your savings will build up much faster!
  • Differentiate your wants from your needs. There are definitely necessary expenses, like food or a mortgage, but lots of spending decisions can be impulsive and unnecessary. Start by being more intentional with deciphering what you need and what is just an added expense.
  • Set some goals and have patience. The best motivator is an end goal. Figure out what you are striving for and remind yourself of that whenever you walk away from a purchase. Be patient and trust the process, because saving money takes time!
  • Find an accountability partner. Talking to a financially wise, trusted friend or family member to hold you accountable is a great way to stay on track and improve your spending habits.

Getting out of living paycheck to paycheck is difficult, but not impossible. The first step is simply to recognize the problem and start making a change. For help with your savings, contact Axiom Bank. We’re happy to talk and help!