Statistics show that almost half of America isn’t prepared for a $1,000 emergency. In fact, only about 4 in 10 Americans could cover it with the money they have saved. And, many Americans, even those who “seem” to be doing well, are living paycheck to paycheck.
So the question is, how do you escape the paycheck to paycheck cycle? Especially if you can’t depend on family, friends, or the economy? Here’s how to make it a bit easier on yourself, and focus on building your savings.
1) Take Care Of Your Four Walls
First things first, you can’t focus on anything other than living if your four walls aren’t together.
It’s as simple as Maslow’s hierarchy of needs. If you don’t have physiological and safety needs met, you can’t continue to grow in life.
Not only has psychology basically proved this, but it also shows why it’s so hard to get out of the poverty cycle. No one is focusing on saving and investing if they’re trying to keep a roof over their head.
So, before you go any further in this journey, you need to make sure your four walls are taken care of. Nothing else matters if you can’t take care of those walls first.
How to Save Money to Protect Your Four Walls
For many people, they can’t depend on parents to take them in, or friends that will let them sleep on their couch. If this is you (trust me, I understand), there are other things you can try.
- See if you qualify for living assistance.
- Find a roommate if you have an extra room, or become someone’s roommate (be safe and make contracts).
- Try to downsize or get a cheaper apartment. Yes, I realize this may put you in a less desirable area. I’ve lived in areas like that for a lot of my life, and I promise you, it’s not as bad as you may think. As with anything, be aware and understand what is going on around you. Sometimes, you have to do what you have to do until you can do better.
- Sign up for social services (more on that below).
- Downgrade your vehicle if you can, and try to own it outright.
- Downgrade your car and housing insurance if you can (it’s a catch 22 I know…but this should only be for the extreme short term).
There are many other ways that you can cut costs and still keep your four walls. But these ideas are a great starting point and can cut your expenses significantly so you can focus on other areas.
Once you’ve got your four walls together, you’ll still want to limit other expenses while you try to save your emergency fund.
Other expenses include:
- school expenses (if you have children),
- eating out,
- pets, and more.
If possible, try to limit these expenses.
I’m not saying to get rid of your pets (unless you truly can’t afford them and take care of them properly), or stop eating all together. I’m just saying to see where you spend the most of your money (outside of shelter and expenses like health insurance) and try to save where you can.
This is one of the hardest things to do if you’ve already cut out a lot of living expenses. But every penny saved is better than nothing at all.
3) Make More Money (Whenever & Wherever Possible)
If you have reliable transportation or access to the internet, you can make extra money on the side. I know that it’s hard working full-time and also trying to find the time to side hustle (again, I’ve been there), but in this day and age, it’s become more of a necessity.
Many people just can’t survive and thrive on one salary alone, especially when they live in a high cost of living area without the high salary. And of course, it’s not like you can just leave (after all…with what money?). So instead, try to make more money.
While side hustles like Uber may have gone down a bit due to the pandemic that started in early 2020, there are still plenty of different ways to earn extra money.
4) Negotiate Your Pay/Benefits
Did you know that it’s still possible to get a raise or better benefits, even during hard times? And you don’t have to negotiate just your salary either. If you need better health benefits, more PTO, or anything else that will make your life easier, don’t be afraid to ask.
Even during the pandemic, many people were able to negotiate higher salaries and better benefits, especially in areas like healthcare and “essential” services. Yes, you may be told no, but it might not hurt to ask.
And imagine this… What if they say yes? How can that change your life and financial situation for the better?
I’ve said this on multiple blog posts on this site, and I will continue to say it. When you’re living paycheck to paycheck, it’s not shameful to take help where you can.
Of course, there will always be people that abuse the system, whatever system that is. BUT, that doesn’t mean that you should feel ashamed for taking help because you truly need it.
There are so many services that you can reach out to for help.
For example, just in my city, they have services for:
- electric bill help,
- water bill help,
- numerous food pantries, and more!
And, they even have services for grandparents raising their grandkids.
There are quite a few other services too, but these alone could really make a difference for someone living paycheck to paycheck.
Of course, you’ll want to find the services that are being offered in your area. No city or county is the same. However, anything is better than nothing when you want to make your financial situation better.
Living Paycheck To Paycheck: You Can Break The Cycle
It is possible to break the paycheck to paycheck cycle! However, sometimes it takes putting your pride down, or being willing to ask and accept help, even if you think you can handle it on your own.
You can do this, I know you can. And I’m rooting for you.
Are you ready to escape living paycheck to paycheck? What advice will you choose to implement into your life?
AUTHOR Kimberly Studdard
Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.