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Stop Living Paycheck-to-Paycheck Break the Cycle & Gain Financial Freedom!

Updated on August 12, 2018
Pam Morris profile image

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In this article, you will learn how to make and stick to a budget, how to save in the case of a disaster, how to determine your needs versus your wants, how to manage risk, and how to stop living paycheck-to-paycheck.

A vast population of the world is searching for ways to stop living paycheck-to-paycheck and save money to improve their financial situation. The problem is most of us do not have an action plan to begin saving money. We all know money consists of great power in today’s world, and money plays a crucial role in everyone’s life. Most people know how to make money, but they do not know how to save or spend money. Although most of us work hard on the job to earn a decent salary, we are unable to manage our money right.

While a six-figure high-paying job can secure a person in the top 1% of the earners, but it is the saving and spending habit that can get them on the road to better fortune. Because it is the little things—your money habits—that often make the difference. As a result, we need to use it in a right way, so that there would be a portion of the money which can go into our savings account.

Tired of Being Broke? How to Break the Cycle of Living Paycheck-to-Paycheck

Breaking free from the paycheck to paycheck cycle is not an easy task, but it can be one of the most mentally relieving things anyone has ever done. When you are living paycheck to paycheck, getting out of debt and breaking the cycle to live a happier financial life may seem impossible. Nonetheless, if you want to break the cycle of being broke so you can live a more comfortable economic life, here is my advice on how to break the cycle and let’s start with a substantial budget that will help you to stop living payday to payday.

How to Save Money: Budget 101: If we want to be able to save money budgeting is the key factor. Most of us do not know how much income is coming in or going out. Therefore, it is tough to achieve our financial goals. Putting a budget in place is a significant way to begin saving money. The budget also assists to show how much income is coming in and what going out.

Three important things a budget will do:

  • free up cash for a savings goals
  • help in paying off existing debt
  • Assist to become financially independent


If you are living paycheck-to-paycheck and you tired of it, the most critical step you can take that will break the cycle is downgrading your lifestyle. Most of us try to do what we cannot afford and buy what we do not need. Get rid of the gas-guzzling car as an efficient one would do? Most people no longer need a big house with five bedrooms. The children are off to college get rid of that big house and consider moving to a more efficient version of it. The smaller more efficient version home will lower the monthly bills, and utterly put some cash in your pocket.

The downgrade is how to get started saving: With the cost of living going up and wages going down or at a standstill, many are searching for ways to save money and improve their financial situation. Very few people genuinely have a plan to save money to escape the stress and live a better and happy life. As consumers, we have a choice to live a stressful life or take action to better our self and put a plan in action to begin saving and living a happier life.

How to Start Saving Money: It important everyone know how to save money, it also a pattern everyone should make a habit of doing. However, saving money is hard for most people to do. Before you begin saving it important to know why you are saving. There are many different reasons to start saving, but the most important reason are to be able to stand on a firm financial foundation. To save money it necessary to have a saving account. Many different saving accounts can help many meet goals of saving money.

Ways to begin saving money:The first way to begin saving money is to spend less than you earn. It is not easy to spend less than you earn but it is possible. For most people the ability to save money is often easier said than done but there are lots of ways to begin saving money, but why is it so difficult? One important factor that can assist with saving money and give you the ability to spend less than you earn is to know what factors drive your spending habit.

Next set up a financial plan, a financial plan can assist you with taking charge of your future. What is a financial plan? It is wisely planning and managing your finances so you can achieve goals and dreams. While negotiating the financial difficulties, that may arise unexpectedly in every stage of life.

Tips on saving: Putting money up from every paycheck is a habit everybody should make. Putting up money per paycheck will assist with bills in the event of a disaster or if you should become unemployed. According to the survey, More than three-fourths of Americans don’t have enough money saved to pay their bills for six months.

Tips on how to save money
General: Save your pocket change. Collecting 50 cents per day in the course of a year will permit you to save almost 40% of a $500 rainy day fund.

Keep count of your spending. At least once a month, use a bank card, checking, and other evidence to review what you've bought. After this, question yourself if it has the sense to distribute some of this spending to an account with emergency savings.

Create a Savings Account: I would suggest you to create a savings account at the regular branch you hold your checking account and transfer a small amount into that account which is a great way to build funds for emergencies. You may think that how money can be saved by transferring into a savings account? Yes, you can do that by not touching that savings account.

Make sure that you inquire about interest rates and fees for the savings accounts and do not draw money from that account at any cost. It best to choose a bank with the highest interest rate but you can earn a higher interest rate with a CD accounts, over a regular savings account. Every week on pay day, transfer a small amount to this savings account or CD account whichever is your choice and make that as a hobby. You will be shocked by looking at the amount you have in your account.

A Bill-by-Bill Guide to Saving Money on Monthly Expenses

Established wisdom will tell those who use it that everything becomes more expensive over time and if you want to live a more comfortable life you need the income to cover the required bills and spend less than your take-home pay. Living way above our means is a problem those who are not natural savers created. While some people are good at saving money, there are those who actually go overboard.

Individuals who are a virtuous spenders know how to save and live within their means. They have a habit of keeping their living expenses level balanced to their earnings. Individuals who are not a good spender, by contrast, they have a tendency to overspend all of their income on wants and their human needs. Over spender waste more money than they bring home and pile up debt in the process.

If you want to stop feeling like your paycheck has vanished after you have paid your required bill, here's a bill-by-bill guide to look over to lower your monthly expenses and make sure you keep a little extra cash in your pocket.

To stop living paycheck-to-paycheck for most of us, all we need is a few simple tips to follow, practicing a little know-how and organize your monthly bills without giving up our lifestyle to do it.

How to Organize your Monthly Bills

  • Mortgage/rent
  • Cellphone
  • Cable/ Internet
  • Credit Cards Bills
  • Water bill
  • Electric/Gas bill
  • Grocery bills
  • Car note
  • Car/life insurance

I cannot emphasize enough how important it is to take the time to look at how and where you spend your money. Once you have a handle on how much you spend if there are monthly bills that you wish you could lower or get rid of you can start eliminating additional debts. Now you know how to free additional debt why not, motivate yourself.

Motivate yourself: Keep track of everything you save. For example, save the money instead of purchasing items like clothes, Laptop, jewelry or a Television. Save your money for continuous six months and then pampering yourself. This will motivate you to save more and more money for a longer period.

Also, this would make you a habit of saving money and it will be available when you need it in the case of an emergency. However, if you decided not to pamper yourself at the end of the targeted time, then there is no problem. Save that money itself and it will be available to add to the saving account.

Paying the bills is not on a person list of favorite things to do, but they are necessary in life and cannot be avoided. Therefore, in this face up to reality challenge, our goal is to organize our bills and get this done as efficiently as possible. Four steps to organizing the monthly bills.

Step one: Gather and sort all the unpaid monthly Bills.

Step Two: Set up a weekly schedule that will assist you to concentrate on your monthly household finances to successful pay the bills.

Step Three: Purchase an organizer folder and file your bill into it after payment for quick access.

Step Four: Establish a monthly routine for getting rid of the old bills to maintain your filing system.

Prioritizing Your Financial Goals: It is more likely to reach your objectives if you transform the savings process in a priority. First you need a list of motives for what you need to spend your money on. Dream and write down on the list the house with a beautiful garden, the sport car, the trip around the world, etc. Next you need to estimate the cost for each of these.

One of the major issues is that you did not have a goal. You just have a plan that goes around the idea of saving money, but without a true cause for your money. It is difficult staying influenced when you have no clear idea what the money is for, so it is much simpler just to spend the money.

Instead of pointless savings, build obtainable savings goals that offer purpose to your money. Whether you want to save $ 6,000 USD in the next six to eight months for a vacation, or whether you want to cache up six months of expenses by the end of the year for your urgent situational fund deposit, having a rational objective, can give you something to force your work toward.

The savings plan can be as simple as this:

  • Calculate the time period necessary for saving the money you need.
  • Build a schedule when you can put money aside.
  • Be perseverant when making the respective savings. Put money aside with the same consciousness as when paying your taxes or your mortgage.

The right way to reward yourself: Most persons will agree that there is no better method to increase motivation, than rewards. Every time you achieve something great, reach a goal, or go forward with a task, a little and simple reward will go a long way. Depending on the duration of your goal, you can reward yourself at determined milestones. This can aid you to track your progress, and also helps in maintaining you motivated to continue saving money. These self-rewards should be joyful things that you may not normally do. Even if they are still small they play a good role and are a strong reason for you to continue saving money.

It may be a day off, a walk in the park, dinner at a pleasanter restaurant than normally, or other fun activities. Just do not spend all your savings to enjoy your small reward. When you do accomplish that milestone, the best way to commemorate and strengthen the positive performance remains to reward yourself, this indulges you a good reminder to not quit your saving money task and keep moving on.

Motivation doesn’t always need to be in material things, just think of rewards that will calm you, inspire you, and settle your inner spirit.

Remove bad habits & break bad spending savings:Some bad habits can put a significant damper on your efforts to save money. In addition, these habits can transform in serious dependencies which are nearly impossible to overcome without aid. Most of these dependencies can be exceedingly dangerous to your health in the long term. Save your money and your body the trouble of passing across these addictions by keeping away from them in the first place.

Do not smoke! Smoking is well-known for its damaging effects like lung cancer, heart disease, strokes, and all kind of diversity of other serious diseases which are familiar to be produced by smoking. On top of this, cigarettes are expensive.
Do not drink excessively! While one or two drinks will not hurt you, frequent heavy drinking can produce serious issues in the long run, liver disease, mild cognitive impairment, weight gain, even death.

Spending Money Intelligently:If you don't already have a “rainy day” fund with sufficient money in it so that you can get through if you unexpectedly lose your income, start donating to one right away. Having a rational quantity of money stored in a secure savings account offers you the liberty to easily sort out your cases in the event that you lose your job. After you protect your necessities, you will want to allocate a portion of your income to create this savings account until you have sufficient saved to cover about 4-7 months of expenses.

The living expenses can fluctuate based on the local financial climate. While it is realizable to survive on $1,600 for a couple of months in most cities, this could not even pay one month's rent for a low-priced apartment in some cities. If you stay in a costly area, your “rainy day” fund will naturally need to be higher.

Apart from providing you the relaxing peace of mind of knowing that you'll be just fine in the event of career problems, having a “rainy day” fund can also get you money in the long run. If you suffer the loss of your job and you don't have a “rainy day” fund, you might be needed to take the very initial job you are given, even if it doesn't pay as you would want. On the other hand, if you can get through without being employed in working for a period of time, you can manage to choose from a vary of jobs and probably get a better paid job.

Money Management: Money management can be seen as the procedure of budgeting, saving, investing, spending, or in other words organizing the money use of a person or group. The overriding usage of the phrase in a financial market is when investment professionals make investment choices for massive stock of funds, like mutual supply or pension goal. Good money management can be many things, like living inside the bounds set by your means of saving money for a short or a long-term goal, having a rational plan to pay off your financial obligations.

Build your subbase: Evaluating your personal net worth is the best way to see what your starting point is more exactly, in any financial objective you want to develop. A balance sheet report estimate your net worth by matching your financial assets, everything you own, with your financial liabilities, all of your debt. The distinction between these two is your private net worth. Don’t be demoralized if your net worth is negative, just keep in mind that this will be an accurate study of your financial situation. Placing goals is much easier now once you know what your present net worth is.

Retirement savings: It is frequently discussed if Social Security will be around in twenty to thirty years. But the truth is that you won't be able to survive only on Social Security benefits. Structuring your prime concerns so that you offer the same awareness to your future retirement savings that you offer to your present household and actual expenses is fundamental to strengthen that well known nest egg.

One rule of thumb for retirement is named the four percent rule, and in the opinion of this rule, what you require to withdraw in your first year of retirement should be about 4 percent of your total retirement money saved.

Some are more restful with a three percent or even a two percent rule. When putting in application the rule, remember that specialists recommend that you plan on spending about eighty to ninety percent of what you pay out before you retire. For example, if you lived on $100,000 USD before retirement, planning to spend $80,000 USD after retirement, then following the four percent rule, you would be required to economize $2,000,000 USD. Another rule is to economize eight times your pre-retirement income; this would outcome in just $800,000 of the nest egg.

You can stop living paycheck-to paycheck, You can do It! It's easier than you think: No one is born with the ability to know how to manage their income, save or to invest their money. However, knowing how to process the capacity to secure your financial well-being is one quality everybody will need in life.

A person does not have to be a genius to know how to start spending wisely, manage their paycheck, save money or investing it; they just need to know the fundamentals and how to create a saving account with a financial security plan to be prepared to gain and enjoy the benefits of managing their money. No matter how much money you bring home, it is hard to administer if you spend unwisely.


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Do you know the total amount of money you spend and total income yearly?

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Tired of Being Broke? How to Break the Cycle of Living Paycheck-to-Paycheck!

How much you need to save each day to have $1000,000 at 65

Starting age
3 % Return
5 % Return
7% Return
you need to save each day in order to have $1 million saved by the time you're 65, assuming you start with zero dollars and receive a 12% annual return.

How to stop living paycheck to paycheck

© 2016 Pam Morris


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