How to Stop Living from Paycheck to Paycheck

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Living from paycheck to paycheck means you are getting paid a salary from an employer, or your own business, and spending every cent, perhaps more, until you receive your next paycheck. This kind of living does not allow you to save, leaving you without any resources in the event of a crisis, such as becoming ill or being laid off. In the long term, living from paycheck to paycheck can lead to a delayed or even no retirement. If you are living from paycheck to paycheck and want to start saving, here are a few suggestions on how to break the paycheck-to-paycheck pattern and make saving a part of your financial plan.

 1      Be Honest and Realistic about Your Situation

One of the first things you should do in order to stop living from paycheck to paycheck is evaluate your financial situation. Be honest about how you are spending your money and realistic about what you can afford. If you have expenses that equal or surpass what you earn then you will have to figure out how to lower your expenses or get a higher earning job so you can start saving.

 2      Make Saving a Necessity

Saving should be considered a necessity, just as paying your expenses is a necessity. Try to think of saving as something you must do rather than something you would like to do. This way of thinking should help you to have the will power to start and keep saving.

 3      Create a Budget and Track Your Spending

You should create a budget for yourself that allows you to cover your expenses, give yourself some spending money, and save a percentage of your income each month. There are a number of Web sites that offer personal budgeting tools, such as,,, or Once you have established your budget, keep track of how you are spending your money to ensure that you are staying on budget.

 4      Trim Your Cost of Living

Cost of living can include any spending associated with food, clothing, housing, entertainment, and transportation. You may be able to trim these costs and create room in your budget for saving. Some ways of spending less may include eating out less, buying discount clothing, renting a movie instead of buying it, driving a less expensive car, or purchasing a smaller home. Think of additional ways you can spend less, and save more, in your own life.

 5      Set Up an Automatic Savings Plan

Most banks offer ways to automatically take a portion of your money from your paycheck or checking account and deposit it into a savings account. This automatic means of saving may make it easier for you to not spend your entire paycheck. If you do not have a way to automatically transfer money to a savings account, simply deposit a set amount of funds in a savings account each payday yourself.

 6      Stop Using Credit

Credit cards and loans can help contribute to living from paycheck to paycheck. When you use credit cards or spend money from a loan, you are spending the bank’s money, not your own, on purchases and it can be very easy to spend above what you can really afford. Therefore, experts recommend that if you are having trouble saving, you should stop spending on credit, at least in the short term. When you stop using credit for purchases, it may help you to keep better track of your expenses and ensure you have the cash to cover them. Once you have established a system for spending and saving, you may figure out how to reintroduce credit cards into your financial situation.

 7      Get a Second or Different Job

You may not earn enough money in one job to cover your expenses and spending and allow for saving, despite lowering your costs. In this case, you may need to consider finding an additional job or a new job that will give you the extra money to afford your lifestyle.

 8      Move to a Less Expensive City

If you are living in a city that has a higher cost of living, then you may want to consider moving to a less expensive area. For example, New York City and Los Angeles both have very high costs of living when compared to other U.S. cities. Many Web sites, including,,, and, have cost of living calculators that help you figure out which cities are most affordable.

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