How to Stop Living Paycheck to Paycheck
Everyone has different financial situations and circumstances that may have caused the paycheck to paycheck lifestyle, but everyone has the potential to escape it.
What Is Considered Living Paycheck to Paycheck?
Living paycheck to paycheck means you have no funds leftover at the end of the month because you are using your paychecks to cover your monthly expenses — and you have little to no savings or money to invest.
Paycheck to Paycheck Statistics
– 59% of U.S. adults said they live paycheck to paycheck, according to a recent survey from Charles Schwab. – Only 38% of people have an emergency fund, according to this Motley Fool article. – 1 in 5 Americans don’t have a dime saved for retirement, according to a survey from Northwestern Mutual.
Steps to Escape Living Paycheck to Paycheck
Below are a few steps I personally took to escape living paycheck to paycheck.
1. Pay yourself first
Start putting a percentage of money into a separate savings account automatically. Keep this away from your main bank account so you are less tempted to access or spend it.
2. Start a side hustle that pays immediately
When you want to escape living paycheck to paycheck, finding ways to make extra money will be key.
3. Downsize your lifestyle
As much as you might not want too, escaping paycheck to paycheck requires downsizing your lifestyle. Sometimes it can be more extreme than you would like, but it all depends on your current financial situation.
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