Break the Cycle of Living Paycheck to Paycheck

If you find yourself living paycheck to paycheck, you most definitely are not alone. The stark reality is that a significant majority of Americans live paycheck to paycheck. Bankrate, an organization that monitors consumer debt and spending, reports that upwards to 76 percent of adults in the United States are living paycheck to paycheck.

There are two primary categories of people who live paycheck to paycheck. First, there are individuals who have lived in this state for so long they don’t even really think about their being an alternative. Second, there are men and women who have reached a level of hopelessness and are resigned to the idea that they cannot do anything but live paycheck to paycheck.

In fact, if you are in this situation, you need to think about your situation seriously. You need to understand that there are tactics that you can employ to improve your financial health. You ultimately can bring living paycheck to paycheck to an end.


Recognize Reality and Downsize

Quite like a majority of Americans living paycheck to paycheck, a majority of Americans can realistically downsize. In most cases, living paycheck to paycheck is indicative of a person that is not just living beyond their means, but is doing so because of unnecessary expenditures.

The first point to examine your spending is in regard to your mortgage or rent payment. If your housing cost is more than 28 to 30 percent of your gross income, you are paying too much for your residence.

Although downsizing your residence can be easier said than done in some cases, accomplishing this goal is not an impossible task. For example, as you approach the end of a lease term on your residence, you need to begin investigating alternate housing options.

Keep in mind that when you downsize to a smaller, more financially manageable residence, you save money on more than just your mortgage or rental payment. You are also likely to save money on utilities of different types and maintenance.

Downsizing your residence is not the only step that you are likely able to take as part of an overall effort to reign in living paycheck to paycheck. You very well may be making monthly payments on an automobile with a price tag that is beyond your means. You may need to take a serious look at downsizing to a less expensive vehicle.

Quite like with downsizing your residence, when you downsize your automobile, you save money beyond your monthly car payment. For example, with a less expensive car, you will save money on associated items like automobile insurance.


Cut Your Entertainment Budget

There is absolutely nothing wrong with socializing with friends and family. This is true even when you live paycheck to paycheck. However, if you are like most men and women who live from payday to payday, and most people do, you can make what may amount to pretty significant cuts in your entertainment budget.

You should set a concrete entertainment budget each month. In other words, you establish a fixed amount of money you will spend on such activities as dining out, taking in films, even grabbing a more expensive beverage from a coffeehouse.

This strategy does not mean you need to abandon spending time with your family and friends. Rather, because most of them are likely in the same boat as you are, using some level of creativity, you can come up with more affordable, and yet entertaining, activities to participate in going forward.


Establish an Automatic Savings Program

One step that you should take in order to permanently break the cycle of living paycheck to paycheck is to “pay yourself” each month. What this really means is that you automatically set aside a specific amount of money each and every month to go into your savings account.

This strategy works to ensure that you start to build what ultimately can prove to be a healthy savings account. This tactic also serves to blunt the need in the future to rely heavily on credit cards when you find yourself in a bit of a financial pinch.


Seek Professional Coaching or Advice

You do not need to go it alone when it comes to your desire to break the cycle of living paycheck to paycheck. In fact, there are experienced, reputable financial advisors and coaches that can assist you in developing solid strategies to stop living from one payday to the next. With professional assistance you can end up living a comfortable life with true financial stability.


Holly Morphew is a certified financial coach specializing in helping clients stop living paycheck to paycheck and eliminate debt. With more than 10 years of experience, she has coached thousands of people to achieve personal financial success.  View client  testimonials here!



Jessica Kane is a professional blogger who writes for Faxage a leading company that provides Internet fax service for individuals and businesses.

Holly Morphew, AFC® is personal finance expert, coach, writer, and speaker based in Denver, CO. She is the CEO + Founder of Financial Impact, a specialized financial coaching practice that helps career-driven entrepreneurs and professionals create personal wealth and financial independence. She is the author of Simple Wealth, a #1 best-seller in wealth management, personal transformation, real estate, and women & business. Holly began teaching personal finance in 2006 as a service project with Rotary International, and received the prestigious “Rotarian of the Year” award for her work in financial literacy. As an Accredited Financial Counselor® with the AFCPE, Holly has also been recognized for “Bridging the Gap” for outstanding work in private practice. Her philosophy, “abundance is our natural state” is the core of Financial Impact programs, which help clients bridge behavior and mindset to realize their potential. In addition to personal wealth building, Holly also helps clients start and scale businesses and create new streams of income.

Hi! I’m Holly, the founder of Financial Impact and an award-winning financial coach. I help career-driven leaders and entrepreneurs create wealth, take the stress out of managing money, and feel confident and powerful when it comes to their finances.

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