Ten Tips to Stop Living Paycheck to Paycheck

The following is a guest post by Omar Adams, who writes on the topic of online accounting degree . He welcomes your comments at his email id:

The figures are startling to say the least – over 70 percent of Americans live from paycheck to paycheck. By the time pay day comes around, they’re broke and waiting to get their hands on the money that is due them. It’s a vicious cycle that they cannot seem to break; it becomes a habit that is hard to get rid of; in short, it’s like a ticking time bomb waiting to go off. Living from paycheck to paycheck is not such a bad thing if you live within your means and have no outstanding debt except your mortgage; however, it might be a good time to tighten your belt and start putting aside some money every month. This not only builds a fund for a rainy day, it also makes it possible for you to enjoy something you like, even if it’s extravagant, at least once a year. Here is how to get started.

1. Start by taking stock of your income every month (or week). Count only monies that are sureties, not any inheritances or windfalls you’re expecting will happen.

2. For a whole month (or week), keep track of all your expenditures; hold on to bills and receipts and list everything that you buy.

3. Using this list and the receipts you’ve collected, separate your essential expenditures from those that are not necessary for day to day life. This would include payments towards loans, groceries, repairs and maintenance, gas, etc.

4. Now total these non-essential expenditures and subtract it from your overall expenditures for the month (week) and you have a figure – this is the amount you can literally save every month (week).

5. Put aside half of this amount into a savings account and the other half into your checking account.

6. Set a rule where you’re never supposed to touch the money in your savings account unless it’s for an emergency. Use the money you’ve saved in your checking account for any overflows during that month – you may have guests or your child may need something extra for school. Put any amount that remains into your savings account.

7. If you have any outstanding amounts on credit cards or pay day loans, pay them off with the money left over each month. Concentrate on the bills with the higher interest rate, and if possible, try and consolidate all your debts into one with a single, lower interest rate.

8. Now start thinking of ways to bring in more money – if your house is large, rent out a portion of it so you have more money for expenses and maintenance; take on a second job if you have the time; or try to make money off the Internet in your spare time. The best way to save more money is to make more of it.

9. Rework your budget every month to include all the money that comes in; however, don’t start spending more just because you’re making more. Wait for at least a year or until you have a sizeable amount set aside in your nest egg before you allow yourself to spend more. If you start splurging all your hard-earned money, you’re going to go back to living from paycheck to paycheck. Remember that your additional income is not permanent, and until it becomes so, it’s best to keep the purse strings tightened.

10. Finally, resolve never to go back to living from paycheck to paycheck; it’s going to take an enormous amount of willpower and determination, but if you’re able to stay the course for a few months, it becomes easier with time. The sacrifices you make are worth the emotions you feel when you’re finally debt-free and have a sizeable amount in the bank.


  1. Thank you for posting this article to my weekly financial independence compilation.

    Hope to see another one soon.


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