How to STOP Living Paycheck To Paycheck 

What exactly is living paycheck to paycheck?

It means that the income you make is just good enough to pay all of your bills, leaving you with almost nothing to save, or use for much else. And then the cycle starts all over again month to month. It’s like running in a hamster wheel, working and running as hard as you can, but getting nowhere. According to, 64% of Americans are living paycheck to paycheck in 2023. So, how do you make sure you stay on the better side of that statistic? Well, if you’re reading this, you’re already getting one step closer to taking action. Many people want to live better lives, but many fall short when it comes to making a change.


What do we do about it?


The first step to stop living paycheck to paycheck, is to identify that you’re living paycheck to paycheck, and if you are, take action. The actions you take should include things that only help you, not make it worse. So the first couple of tips are what you shouldn’t do; then we’ll go into a few things you should do.


What should I NOT do with my finances?


#1 – Don’t spend money you don’t have

If your financial health is questionable, the first thing you should do is cut out anything that has high-interest rates and that you have to pay back. That means, STOP using credit cards. When you buy things on credit, and you pay small amounts each month, you end up paying more than the original purchase. Sometimes much more. Check out our post on Understanding Credit Cards and How NOT to Use Them, which provides a step-by-step example on how using credit cards can build up debt.


#2 – Don’t spend more than 50% of your income on housing expenses

I’m talking about what you spend on your rent, or mortgage. If your household income is $4000 per month, and you’re paying more than $2000 for rent/mortgage, you should consider downsizing. Make sure you have at least a 50% margin. The ideal situation is when you can make the margin bigger and save much more money.

Why? You might ask. You need to consider if for whatever reason, you miss a paycheck, or some life event happens where you lose your job, or are not able to work for a while. The larger the margin you have between your income and your housing expenses, the more secure you’ll be if something like this were to happen. This margin can be a great start to begin building your Emergency Fund.


What should I do to Stop Living Paycheck to Paycheck?

#3 – Create a budget

Oh man, I feel some people cringe when they hear the word budget. “You mean, I have to work all day, all week, all year long, and you want me to come home and work more?” – said 64% percent of Americans. Why is it that so many people put so much hard work and effort in their place of employment, but at home, in their lives, in their finances, where it truly matters, they don’t want to put in the effort? Shouldn’t we put the same, if not more effort into bettering our finances?

That being said, creating a budget doesn’t have to be a chore. Keep it simple. The basic idea is – write down your income, your monthly expenses (rent/mortgage, food, utilities, subscriptions, etc.) and find out where you could improve. Next month, look at last month’s budget, and do it again. You can start improving one baby step at a time.

Here’s a simple easy-to-use template from that can help you start your budget – Click here to download


#4 – Live below your means

In order to stop living paycheck to paycheck, a crucial financial practice is to live on less than what your income is. Here’s a quick example: If you add up all of your expenses throughout the year (housing, transportation, food, and all other living expenses,) and your total comes up to $30,000. That means your lifestyle costs $30,000 annually. If your household income is $60,000 annually, you should technically have at least $30,000 left at the end of the year (before taxes.) That’s living below your means.

Now, if you’re making $60K and your lifestyle costs more than $60K, to improve your finances, you’re going to have to make some sacrifices in your lifestyle. Not to mention, living above your means is a quick way to go into debt. 

What sort of things should you change?

  • Are you driving a new car with a high monthly payment? Can you get by with something used in good condition?
  • Are you getting takeout more often than not? Could you start meal-prepping early in the week? I’ll have a post soon on what you can do to eat inexpensively.
  • Are you buying expensive clothes, shoes, jewelry, or other accessories? Could you save some money by not buying brand name clothes? Maybe going to thrift shops, or other places that are much more affordable. Don’t be too proud to do this! Pride can be a downfall in finances.
  • Are you spending too much on entertainment? Movies, streaming services, going out to bars or clubs often, excessive traveling, etc. We all need a break, but we could also do things in moderation, and find things to do that are even free. I’ll have a post on types of things we can do at a low cost, or even free soon.

These are just some things you can change, this list can absolutely go on. You’ll have to make an inventory of your own lifestyle to see what things you can change that will help you.

Making sacrifices to stop living paycheck to paycheck might seem like a daunting task. Many people try to avoid it, and end up in a world of financial crisis. I’m not saying you have to do everything at once. Take care of things a little bit at a time, and don’t add any new expenses you don’t need along the way. You can make your first goal to practice meal-prepping, and take a month aside to practice that. Next month you can set a new goal. If you fall flat on your face and don’t meet your goal, it’s ok! Just try again. Practice makes perfect.


#5 – Be Frugal! Even if you make more money.

Most of us would like to make more money if possible. Whatever stage of life you’re in, if there’s an opportunity to increase your income, chances are, you’re going to take it. However, just because you increase your income, doesn’t mean you have to increase your expenses. Many people start making more money, and think it means they now have a hall pass to buy more stuff. This isn’t always a great idea. If you want to stop living paycheck to paycheck, a paycheck with a higher amount is not going to fix the problem. Because, if you live above your means making $40k per year, and you don’t learn how to manage your finances, you’re going to live above your means making $50k per year, and the same when you make $60k per year. 

Natalia and I have been steadily increasing our income since we met. In 2015 I personally was making less than $30k per year. Fast-forward 8 years later, and I’m making six figures. She was making more than me (still is) but the situation was similar. Other than upgrading our house and our cars because we’re looking to expand our family, we’ve been living a similar lifestyle to our 2015 selves. With God’s grace, our income has multiplied since that time several times over, but we’re still not living any more lavishly than we did in 2015. So where does all of this extra cash go? Some of it gets invested, some saved, some will be going to investment properties, but all of it is going towards our goal of financial independence. 


Bringing it all together

Everyone’s story is different, and we’ve been conditioned to think a certain way about money since we were young. You have to break that conditioning and realize that you don’t have to live life waiting to just have enough money every other Friday. I’m not saying that this is something that will happen overnight, but if you put in the effort, your finances will change for the better. Once you do put in the effort, you can and will stop living paycheck to paycheck! The more you educate yourself about money, the more knowledge you’ll have on how to use money correctly. You’ll be able to make money work for you, and not the other way around. However, you have to be the one to put a stop to that cycle. Believe me, you won’t regret it. Once you do, you’ll never want to turn back!

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