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Saving Money When You Live Paycheck to Paycheck

Bills, Bills, Bills. It’s not just an awesome song circa 1999 by Destiny’s Child, but it’s also just a fact of life. We all have them. The sad part is for millions they struggle to keep them paid in full on time each month because they are living paycheck to paycheck.

I’ve been there. While it’s the easiest thing in the world to admit that you have been through, I can tell you there is a light at the end of the tunnel, and it is possible to make it out and still survive.

Try to find ways to start making “passive” income

Earning passive income has been the ultimate side hustle for many years. However, due to the rising cost of everything (except our paychecks), for many, it has become a way of life. Passive income is simply earning money without putting any real work or thought into it. Having an extra $100 a week for many people can be the difference between having your lights on or off and food in the fridge.

How to do it

  • Try installing one of those apps on your phone that allows you to earn money for watching movie trailers.
  • Ebates while you may be thinking “I don’t have extra money to shop and make this worthwhile”, well you don’t always have to shop. Refer friends and when they shop you earn.

Talk to bill collectors and negotiate bills

This can be scary, but it works. There are understanding people in the world and as much as your pride may hurt doing this, it doesn’t hurt to give it a shot. Many places (like AT&T surprisingly) were very helpful with us in lowering our bills. There isn’t much we could do about the electric and water company, but they were great in giving us tips to monitor our usage which significantly lowered our bills and saved us nearly $300 a month on those two items alone.

See where your money is going

Are you (or your spouse) eating out during lunchtime? Did you order a $20 pizza for dinner instead of going grocery shopping? Is Hulu or Netflix eating up too much extra money?

If so then stop and cancel. This is called discretionary spending and it’s time you cut it out. Yeah, I know this sucks. But the reality is if you can’t afford it then you don’t need it. Yes, I understand Hulu is only $7.99 a month, but that $7.99 could be used toward another bill. And that $20 could actually feed your family for a week if you shop wisely.

No one wants to be told they can’t have or do something, but this is where adulting comes into play. If you want to make living paycheck to paycheck a temporary thing, then you need to tighten the buckle and dig yourself out of the hole you’re in.

Control your expenses

Now that you see where your money has gone, the next step is to put it in check. Meaning that it’s time to tighten your belt a bit (or a lot depending on your situation). Stop eating out, cut out the cigarettes or beer if it’s a habit (because it is a money sucking habit) and start living frugally.

If you are renting and are able to move someplace that is cheaper do so. If you aren’t able to break your lease without penalty or if your family is too big for a smaller home (per law for renters in some states), then come up with other ways you can cut corners and save.

Sacrifice today so that when you are older you can enjoy life. No one wants to be 80 years old having to work because of poor decisions they made early on.

Snowball your debt

You may have heard of the debt snowball method if you’ve ever listened to Dave Ramsey. I can tell you first hand this method works and is great for clearing out debt.

Simply list out your debts from smallest to largest. Paying off each debt in full. As you move through to the larger debts, you are adding the payments that would have been made to the smaller ones, which allows you to pay off the larger ones faster. Depending on your debt and your income, it may take a few years to get it all worked out and paid off. But please believe when I say it is worth it. We conquered $40,000 in six months using this method and on one income (and my husband was not making anywhere near that amount at the time).

Start an emergency fund

I have to say this should have been at the top of the list. Save a minimum of $1000 to emergency situations (being short on cash for a movie is NOT an emergency).

Begin depositing into it regularly, at least $100 per paycheck but more if you can. If you can’t find $100 then see the next step for how. Make it an automatic deposit, the first bill you pay each payday because it is the most important! A savings account will help you smooth out your finances — when an emergency comes up, like your car breaking down or someone having to go to the hospital, you won’t be thrown back into indebtedness or brokenness. You will have some cash to pay for that emergency, and you can use your regular paycheck for regular expenses.


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