Dealing with the Hell of Living Paycheck to Paycheck

The subject of living paycheck to paycheck is as old as working for a living is. Despite the fact that we all strive to be financially well off or even financially independent, we have to face reality. Many of us aren’t well off and many of us struggle just to get by week to week. That’s true even in a country where the economy is strong and the stock market is breaking records almost every minute these days. Here are a few startling statistics from a survey taken in 2017 by CareerBuilder.

It's time to stop living paycheck to paycheck. Here are the steps you need to start taking control of your finances and building your future.
  • 78% of U.S. workers live paycheck to paycheck
  • About 10% of workers making $100,000+ live paycheck to paycheck
  • More than 25% of workers do not set aside any savings each month
  • Nearly 75% of workers say they are in debt today and more than half think that they always will be
  • More than half of minimum wage workers say they have to work more than one job to make ends meet

Assuming you do have an income from something you do or an actual job, even one you really enjoy, sometimes your passion for it doesn’t match your paycheck. What can you do to make it from this week to next week?

How Can You Deal with Your Personal Financial Stress?

You’ve tightened your belt so much that you just can’t find one more thing to cut from your budget, and you’re about to scream out in pain. You are not alone. Over 40 million American households say they are living hand-to-mouth. So what is it you can really do to get through the pain and start trying to relieve the pressure and stress that you haven’t already tried?

If you find yourself in this situation, here are some things you can do to help remedy the situation. The paycheck-to-paycheck life doesn’t have to be the “hell” it seems.

Warning: I swear to you my first suggestion is so obvious that I can get myself really upset when I have to explain this to anyone, but…here goes.

Step #1 – Your first step is taking a really good look at where your money is going

How will you ever know how to use your money properly unless you actually know where you are spending it? You know that you’re being stretched to the limit, but what exactly is causing you financial distress? The only way to do this is to track your spending for a minimum of 30 days.

Write down everything you purchase during that time. At the end of the 30 days, you’ll be able to see what you need to cut out completely and what you need to start spending less on. This will prove to be a really eye-opening exercise. Why?

Because most of us spend money on lots of things we don’t actually need. We are impulsive and convenience slaves to the really easy “spendz” and just do it without thinking. And the crazy part is we do it even when we don’t have the money.

But, one caution here, too. Make sure that you don’t become overly conservative once you do set up a monthly budget. When you cut back too much, you set yourself up for impulsive spending sprees. Do build some fun into your budget by setting aside savings just for some fun purchases. This way, you won’t feel totally deprived. That’s a “hell” you shouldn’t self-create!

Step #2 – Avoid being used as a personal ATM machine

A big reason some people get stuck in the paycheck-to-paycheck trap is that they often lend money to their friends and family members. Not a surprise here, you may never see that money again! Even if you do, more often than not it will not come back when you really need it.

If this is you, stop it right now. Don’t feel pressured to lend money to whoever asks you for it. Remember that you have your own needs and expenses. If you do feel compelled to lend, make sure that your financial obligations are taken care of first—and oh yeah, don’t expect to see your money ever again.

Step #3 – Don’t “over-withhold taxes” and be happy getting an annual tax refund

Maybe this step is really step #1? After all, your spending, budget, and all your money thinking can’t even begin until you actually have some of it in your hands. So get as much as you can legally get in your paycheck every week and take it home!

Make sure the correct amount of money is being withheld from your paycheck. Depending on your situation, the IRS may be taking too much from your paycheck, money that you could use right now. Don’t ever give the IRS an interest-free loan. If you’ve experienced a major life event such as the birth of a baby, divorce, or marriage, you will need to make adjustments. You can do this by filling out a new Form W-4.

Coincidentally, there is a brand new W-4 for 2020 that is easier for most to fill out and you should do it if necessary ASAP. There is no rule or law preventing you from changing withholding to an amount that you want as long as you are comfortable with it and will not put yourself in a position to owe taxes at year end!

Step #4 – Save money when you are struggling to make ends meet?

Yes, I said it. As weird as it may seem, there may be a hole in your roof right now when it comes to money, but believe me when I tell you that a roof with a hole in it is much better than not having any roof at all! Save for that rainy day!

It may be just a matter of time. Consequently, it’s wise to designate some of your paycheck for savings. So when you do have an emergency, you won’t be seeing things like check overdrafts, spending cash that was designated for another urgent purchase, or relying on your credit cards to bail you out of this hole and then burying you in another even bigger one.

The best way to take the pain out of saving is to have a certain amount of money automatically taken out of your paycheck each pay period. This way you won’t see or miss the cash. Setting up your savings on autopilot will also take the temptation away to check your balances frequently. Checking your savings balance too frequently tempts you to make lots of withdrawals.

Step #5 – Look at how you deal with food

It is ironic that food is the easiest way you can go to stretch your dollars since that also is the area where there is the most waste. The average U.S. household throws out 25% of the food it purchases. For a family of four, that is between $110 and $200 a month that ends up in the garbage. Wow!

An even bigger waste of food money is dining out. The Bureau of Labor Statistics says that the average U.S. household spends about $220 a month eating out, which is more than enough to cover a week’s worth of groceries cooked at home. So stretching your food dollars means eating at home and using perishable food and leftovers rather than pitching them in the garbage. Think about it: how much do you spend on eating out every month and how much food do you toss away?

You can use any and all of the basic food strategies I have written about dozens of times here like making a good shopping list, shopping you own pantry first before you buy more, buying generic, using coupons, cherry picking sale items, etc. to save when food shopping,. And then there’s the big one: avoid dining out all of the time. Brown bag your lunch and dine out when you have a reason, not because it’s so much easier!

Related Posts:
19 Tips to Save Money on Groceries Every Month
Top Ways I Score Free (or Almost Free) Groceries
5 Easy Steps to Save Up to 50% on Your Grocery Budget
Smart Couponing Tricks That Make Savings Even Better!

Final Thoughts

Look, dealing with a paycheck-to-paycheck lifestyle is difficult. But the good news is once you start dealing seriously with a paycheck-to-paycheck existence, you realize how much waste there is in your spending habits and how creative you can be when the pressure is on to fix them.

Try this one simple philosophy when it comes to spending if you live paycheck to paycheck. Do it yourself. Do your own cleaning, mowing, laundry, and any other household chores or tasks you might pay someone else to do. Eliminate paying for it and learn how to save your money when you really need to do it, otherwise you will “have to pay for it”. Do you get my drift?

Are you that paycheck-to-paycheck family? If so, what’s your plan to get out from under that pressure and stress? Remember, there are only two things that can change your financial fortunes: Earn more money or Save more money!

5 Comments

  1. Louise

    A very important post, Gary!
    Not being able to save more than five or ten dollars a pay period would be very disheartening. Having those little bits of savings wiped out by a single crisis might make it seem like saving anything isn’t worth it. But it is, if you averted one crisis.
    I’m sending mental encouragement to people who still try! The little costs and the little savings do matter!
    When tracking spending, your #1 points, really think through what is a need and what is a want. To me, make-up, fancy hairdo’s, mani-pedi’s, pets, alcohol, and much new clothing are not necessary. I am fortunate that no one ever got me hooked on tobacco. But I do spend money on plants for my yard and nice presents for others, which some people would consider unnecessary. So in making a budget, consider each item carefully. If it is chosen to be included in your spending, make the most of using and enjoying it!

    1. I really appreciate your feedback, Louise. I know it’s difficult for many to think savings is possible when you’re living on a small income, but you are definitely right. Some savings is certainly better than ignoring it. Choosing the wants and needs may sound like a simple task, but it’s very personal. To some, a pet may be a priority. To others, a charity and helping others becomes a similar priority. I’m not ever going to criticize someone who makes a thoughtful decision and chooses to live with it. The important part is to look at these things and make the best decisions you can so that you can avoid the “hell” that living paycheck to paycheck can bring you. Once again, thanks for your thoughtful comments.

  2. Louise

    I agree– and I certainly do not mean to criticize the choices of others either.

    Being in a marriage or other shared financial situation with someone who doesn’t share priorities adds a whole new layer of “hell.”

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