You don’t have to live paycheck to paycheck anymore, here’s how!
Are you tired of feeling like there is never enough money? Are you ready to stop living paycheck to paycheck? It IS possible and I’m here to tell you how!
Why Do I Need To Stop Living Paycheck to Paycheck?
I had someone ask me this question a few months ago. I was encouraging my readers to save more each paycheck, and someone asked me, “Why? What’s wrong with living paycheck to paycheck?” I’m going to answer this question right now!
Here are a few benefits of having some extra cash every pay period:
- Less Stress. If you have extra money each pay period you will no longer be having to worry during those last few days before you get paid. You won’t have to wonder whether you will have enough to get you through.
- Prevent Debt. Emergencies come up. Unexpected expenses arise. This is just a simple fact of life. If you are able to save a little bit each pay period you will have the cash needed to pay for these emergencies, rather than putting it on a credit card.
- Save For Your Future. More money means more opportunities to save for the future. This might mean being able to save for retirement or grow a sinking fund for a fun purchase.
Follow the easy steps below and you will have more money in your budget, and more importantly, more money in your bank account.
Step #1: Make A Zero Based Budget
The very first thing you need to do to stretch your paychecks is to make a budget.
A zero based budget is when you budget every penny of your paycheck so that your income and expenses are the same amount. This does NOT mean you spend all of your income. It simply means that every dollar has a place and a purpose within your budget.
To make a zero based budget you will need to first write down the amount of money you expect to earn this pay period.
Next, go write down all of your expected expenses, don’t forget contributions to sinking funds, retirement, etc.
Your goal will be to get your expenses to equal your income.
I explain exactly how to do this in much more detail and a full video tutorial in my Quick Start Guide to Frugal Living eCourse.
There are many different ways to budget! We prefer the You Need a Budget software. You can also use just plain ol paper and pen. feel free to download my budget worksheet below. This is a great place to get you started!
Step #2: Track Your Spending
Now that you have your budget made it’s time to track your spending. And, when I say track your spending I literally mean to track every.single.penny.
It’s easy to track your spending, but it does take time. You will need to write down everything that you buy and what budget category that item falls under.
This exercise gives you a huge amount of insight about how you are spending and exactly where your money is going. Sometimes, we don’t realize how much a few bucks here or there add up, but they do!
Step #3: Cut Out Unnecessary Expenses
The third step to stop living paycheck to paycheck is to cut out all unnecessary expenses. Look through your spending tracker and pick out a few items that you could cut out of your budget. This might be eating out, going to movies, cable TV, daily coffees, etc.
Need some inspiration about what to cut? Be sure to check out these articles:
Don’t forget to look at the expenses that you can minimize on, rather than cutting out completely. Perhaps you spend $150 a week on groceries, could you reduce that to $130 a week? There is an extra $80 a month!
Step #4: Save Your Bonus
Whenever you are offered a bonus or raise at work save it! You are use to living on less, so use that bonus to bump up your savings account.
If you are offered a 5% raise, put that extra 5% into your savings each paycheck. This is one of the easiest ways to save more without having to sacrifice the life you are use to.
Step #5: Automate Your Savings
Set your checking account to automatically take a certain amount each month and deposit this into your savings account. This is an easy way to save for retirement, emergency fund, or anything else you need.
When your savings is automatic you don’t ever have to make the choice whether to save or spend on something else, that decision has already been made for you!
We personally have all of our savings automatically done for us and it makes the world of difference! This money doesn’t even feel like it belongs to me, because it goes straight to savings. It feels amazing to be able to watch that saving account grow at a regular basis.
Step #6: Make More Money Through Side Hustles
Last, but certainly not least is to find a way to make more money. You do not need to get a full time second job to bring in extra income.
All you need is a few hours each week to devote to a side hustle. If you are struggling finding that extra time, try to give up one thing in your life and use that extra time for side hustling. This might be your nightly 30 minute TV time, or maybe those few hours you sleep in on Saturdays.
When choosing your side hustle, be creative! There are so many possibilities! Look at your talents and interests first to find the perfect fit for you.
Are you crafty? Perhaps you could make crafts to sell on etsy. Do you like to write? Consider starting a blog! Maybe you enjoy teaching? Look into teaching kids in China (all from home)!
If there’s a will, there’s a way!
Follow these six steps and you will find more room in your budget and can finally stop living paycheck to paycheck.
Here is your friendly reminder that these steps aren’t easy! Nothing good in life is. It will take some time and sacrifice on your part.
But, I can also promise you that if you are willing to put in the work and the dedication you will find extra money in your budget each paycheck, and this can change your life!