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Stop Living Paycheck to Paycheck in Ten Steps

Written by: Kristy Welsh

Last Updated: September 11, 2017

Many of us live paycheck to paycheck without saving any money in between pay periods. It turns into such a common experience that living paycheck to paycheck feels like the norm. If you're sick and tired of the struggle — week after week, month after month, year after year — it's time to find a new normal. Here are ten steps to help you save money, budget your money, and change the way you think about money so you can stop the cycle of living paycheck to paycheck and start saving money.

1. Change your mindset

When you're living paycheck to paycheck, it doesn't feel like you have much choice. And while that may be true today, if you change the way you think about your money, it doesn't have to stay that way.

You are in charge of the money you make and how you choose to spend it. The longer you've been struggling to make ends meet, the more difficult it will be to accept this truth. But like it or not, there is no way around it. The only way to stop living paycheck to paycheck is to believe you have the power to change it.

2. Get others on board

All too often, living beyond your means is perpetuated by relationships. You may be ready tighten your belt, but it's tough to say no to family and friends who don't know just how important it is for you to change the way you manage your money. Call a family meeting and have the agenda be all about financial goals and how to get there.

As for friends, be upfront and tell them you need to spend less and save more. What you'll likely find is that they would love to do the same, and together you can plan more affordable fun accordingly.

3. Visualize your financial goals

You probably have a pretty good idea of what you'd like to accomplish with your money, but a concrete visual will get you there faster. Start with a list then, if you're so inspired, turn it into a vision board which is a fun, creative exercise for the whole family.

There's no one right way to make a vision board, but you can start with a stack of magazines relative to your financial goals from real estate, to travel, to investing. Clip pictures, words, and phrases, then collage them onto a piece of poster board. Feel free to incorporate drawings, paint, and odds and ends that help flesh out your goals. 

4. Track your spending for 30 days

We all think we know where our money goes. Then we track it, and we see our money going places we never would have imagined.

Designate a small notebook to record every penny you spend. Keep it in your purse or pocket so you can write down every transaction as it happens so that you don't forget. Of course, you will forget now and then, so save every receipt too.

At the end of the 30-days, check your receipts against your spending log to be sure they match up. Also, take the time to check your log against your debit and credit card accounts. In this manner, not much is going to slip through the cracks.

5. Create or modify your budget

Subtract what you're spending from your income, then cut where you can.

Entertainment is an easy place to start. For instance, it's a pretty safe bet that we can all stand to sacrifice cable television and Netflix. Your local library likely has an impressive collection of DVDs you can rent for free instead.

Where you can really make a dent, though, is in a couple of places you will resist at nearly all cost — housing and transportation. Look at moving to a smaller place or getting yourself into a cheaper car.

Of course, look at other areas as well; just be practical. The food budget may be ripe for cutting if you eat out a lot, but it could be tougher if you already make all your meals at home.

Whatever you do, do not skip this step. It's the only to way to ensure success of the rest.

6. Start saving money

Be sure to include in your budget money to go toward savings. If it seems ludicrous to think you could set aside anything when you're living paycheck to paycheck, you can always set aside something. As little as $5 to $25 a month will add up, and is a great way to get you into the savings habit.

7. Stop making late payments

If you pay your rent, utilities, car and other bills past the due date, you're just throwing money away on late fees. Of course, it's tough when you're living paycheck to paycheck. But once you cut your expenses, you should have less trouble paying your bills on time, if not early.

8. Pay down your credit cards

When you're living paycheck to paycheck, credit cards can feel like your best friend. This is a fallacy, and a dangerous one. Unless it is an absolute necessity, like keeping the electricity on, do not charge another thing to your credit cards.

If you're already carrying a balance on one or more cards, and only making the minimum payment, you're wasting money on interest fees every month. Start sending in more than the minimum, even if it's just an extra $5 to start.

9. Increase your income

This one comes late in the list only to avoid scaring you off from this process. While there is nothing scary about earning more money, advice like "increase your income" can sound a little ridiculous because it never seems that easy. is. There is always a way for you to make more money than you do.

Maybe it's time to ask for that raise you know you deserve. Or to get another job working nights or weekends. Or to start doing odd jobs when and where you can find them — TaskRabbit is a great place to start.

10. Keep yourself inspired

Steps one through nine won't be easy, and they won't be quick. You'll feel discouraged and you'll want to quit. So it is imperative you do all you can to stay inspired.

Look at your vision board and read your list of goals every single day. Call monthly family meetings to track your progress. Confide in friends for support. Read inspiring books and blogs. Post inspiring quotes on the bathroom mirror, the refrigerator, and your desk. More than anything, be grateful for what you already have.