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The recent government shutdown was the longest in United States history. The 35-day-deadlock put a lot of government workers in financial peril. Understandably so, that’s a long time to go without a paycheck.
But the shutdown shines a spotlight on a more important aspect of life in the U.S. in that most U.S. workers wouldn’t last a week of a government shutdown. That’s because a staggering 78 percent of employees live paycheck to paycheck.
If you’re barely making ends meet and one sickness or job loss away from rock bottom, take these four strides to start living each week differently.
Make Progress on Bad Debt
Many factors contribute to a person living paycheck to paycheck. Some are circumstances and take extra time to work through while others are behavioral. They can change sooner than we think.
In either case, leaving the paycheck-to-paycheck life behind isn’t possible when carrying bad debt. Monthly interest rates eat into essential spending categories and lower our quality of life. If an unexpected expense arises, we lose progress on our balance and are back to where we started.
Commit to a repayment strategy like the debt snowball, avalanche, or snowflake method to stop treating debt like a job and more like a sickness you desperately want to cure.
At the same time, it’s prudent to know when a balance has surpassed a manageable level. Savvy repayment strategies and debt consolidation loans won’t help if balances far outweigh income. Instead, consider the pros and cons of declaring bankruptcy or undergoing debt settlement by researching reviews of providers like Freedom Debt Relief.
Create a Buffer
Life is many things, and expensive is one of them. But what makes life even more costly than it needs to be is not having any savings to cover emergencies. When a car breaks down and we don’t have the money to repair it, our commute to work and the ability to earn money might be impacted.
When we get sick for more than a few days, we don’t have the option of taking time off to rest. When we need to purchase essential things like food and clothing, but we only have what’s remaining of the previous check, we have to buy lower-quality items, which is far more expensive in the long-term. Building a buffer and no longer using every dollar earned to pay for something allows us to start putting money away for retirement.
Increase Your Income and Slash Any Unnecessary Expenses
There are no two ways around it. If you want to shed your paycheck-to-paycheck existence, you’ll need to widen the gap between what you earn and what you spend.
After all, it’s not uncommon for high income-earners to live beyond their means, eager for the next payday. It’s also no anomaly to live paycheck-to-paycheck because not enough money is being generated. For increasing your earnings, look into developing or improving an existing skillset that you can use to form a side income or leverage into a better full-time job. When looking at the budget sheet, use the KonMari method and highlight every non-essential purchase over the last month that didn’t spark joy for you. Then avoid repeating the same mistakes the next month.
Get Insured
A less-talked-about but crucial area of building wealth and personal economic stability is to have various types (and adequate coverages) of insurance. From health coverage and auto insurance to homeowners or renter’s insurance, paying premiums ensures you never have to start from scratch.
Health insurance can be expensive even for basic care, but you’ll still be protected from serious issues that would have left you buried in debt. Ensuring your car, in addition to being required in most states, keeps your mobile to fulfill your daily obligations. Ensuring your living space protects your valuables, like a computer that can up your skillset, or providing financial assistance if your residence were to become unlivable for a period of time. These things aren’t common, but they do happen.
It’s draining wondering where the money will come from each week. However, nothing will change with inaction. Gaining a financial foothold takes multiple steps, but you can get there when you tackle debt, build a buffer in your budget, widen your earning-to-spending ratio, and take out essential insurance coverages that protect your bottom line.
It is very important to not spend more than you can afford and to make sure to have money saved in case of an emergency!
It is, and sometimes it is so much easier said than done.
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I agree with you wholeheartedly. It’s not always easily done. This is especially true with the society we live in today.
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I’m almost 63 years old and my husband is 71. We can’t remember a time when we weren’t in debt! Raising children is very expensive! Every time we had a nest egg, something happened to a kid and there it went!! We did without a lot of luxuries! Then I got Multiple Myeloma and I couldn’t work and our funds were depleted more. When life is going good so is the money! Plus taxes are killing us!! We are constantly paying taxes! It is hell to get old! The money coming in is dwindling and so is our health, but the government and no one cares!! These are the hard facts and a lot of my elder friends are in the same predicament – so SAD! It’s going to get worse, because the government won’t leave our Social Security alone or pay it back with interest!! Here’s to our golden years after working our youth away!!
Sue,
I’m so glad you shared your experience with us. I agree that the government should leave our SS alone, after all, we worked for it and it was taken out of our check. The older I get the more I see how the struggle is even harder. My heart goes out to you and him.
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Thank you for sharing your life experiences with us. I’m sorry you’ve had a rough road, but it sounds like you’ve taken it in stride and have made the best of it along the way.
I agree that our government needs to stop messing with the money that we worked hard to earn. They took the money from our paychecks with the “promise” of us getting it back, but now they are basically stealing it from us.
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I’m all for this, I find living from one paycheck to another stressful #KCACOLS
It is very stressful! That’s why I hope some of the posts I share help people to find the means to break this cycle.
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It is so important to keep checking your outgoings, and cancel any direct debits for things you don’t need or use. Recently we cancelled our Sky (cable) TV, and it saved us £80 ($140?) a month. Shopping around really helps too… #KCACOLS
Yes, these are small ways that can have a huge impact on one’s financial situation. Thank you for sharing your experience too.
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Thanks for these great tips. I need to think about where we can cut some unnecessary expenditure. #KCACOLS
It’s not always easy to make the decisions on what stays and what goes that’s for sure.
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This is great advice. I am currently trying to create a buffer for myself in case of any unexpected bills etc.
#MMBC
I hope that you’re able to create that buffer in a timely manner. It’s not always easy to do, but well worth it to have the nest egg when you need it.
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Thanks for the tips. So many people live paycheck to paycheck now and it’s very stressful. #KCACOLS
It definitely has become a very common thing. I can remember growing up it was the minority who did it, but now it seems that the majority of the population around here are living this way.
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I agree completely.It does lead to a stressful life.
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These are great tips, and I am certainly someone who lives paycheck to paycheck…well, actually I live in my overdraft after all my bills come out and I just can’t seem to climb my way out of it! It depresses me every day, but taking on more work means paying for more childcare, which makes working more hours counterproductive! I worry I’ll never find a way out sometimes. I will try your KonMarie tip, thank you. Thanks so much for linking up at #KCACOLS. Hope you come back again next time.
I hope that tip helps you. I would also recommend you check out the work from home options I’ve provided in the How to Work From Home Legitimately post I did. Maybe you’ll find some ideas there.
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Very good advice especially as a lot of families are in these desperate situations to get back X #kcacols
I’m glad you liked this advice. I hope it helped you in some form.
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Fantastic tips especially as a lot of families are living in this difficult situation X #kcacols
Unfortunately, that is very true. I hope this will help people in some form.
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Definitely a good idea to give yourself a buffer or contingency money, just in case. I like the idea of checking through last month’s expenditure and seeing the ones that didn’t bring joy or were necessary. Repeating the same mistake is madness. #mmbc
I’m glad you found a useful suggestion.
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Hi I tried leaving a comment a couple of days ago but I don’t think it worked so I hope it does this time! They are great tips and I know that it is an everyday problem for a lot of people. We find that one of the best ways to save money is to not go out. I know that sounds a bit dull but it costs so much money to go out for meals, concerts etc. that if you start staying in you will truly see the savings! I have two small children so most times I don’t have the energy to go out anyway! #KCACOLS
That’s a great way to save money! I’m sure you find many wonderful ways to make life entertaining for all involved.
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This is my situation and you’re right, it is draining living paycheck to paycheck. Thanks for the useful tips! #KCACOLS
I’m glad you found these tips to be useful. I hope that they help you get out of this situation.
Great advice again! We’ve done a lot to try to cut down on our outgoings and pay off debts etc, but without increasing our income, we’ll be living paycheck to paycheck for an eternity. So increasing incomes is now moving into focus for us. Thanks for the advice! x #KCACOLS
You’re welcome for the advice. I hope it helps you.I hope you consider checking out the various ways I’ve shown you for making money from home to help increase your income.