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How to Stop Living Paycheck to Paycheck

Phew! Finally made it to payday. Time to pay the bills (only a few days late) and put gas in the tank. And hey, it’s Friday—so pizza night!

Suddenly, that paycheck is almost gone. Just like that. Now you’ve got to figure out how to survive until the next payday. And there’s definitely not enough left to save for later. How exactly are you supposed to get ahead?

Hey, if that’s you, please know you’re not alone. I’ve been right where you are. And in fact, 78% of Americans feel like they live paycheck to paycheck.1 But hear me when I say: You don’t have to stay stuck! You can break the cycle just like I did!

I’m going to show you how to stop living paycheck to paycheck—so you can find extra money in your month, eliminate money stress, and finally make progress toward your goals.

How to Stop Living Paycheck to Paycheck

  1. Get on a budget.
  2. Take care of your Four Walls first.
  3. Cut extra expenses.
  4. Start an emergency fund.
  5. Ditch debt.
  6. Increase your income.
  7. Live below your means.
  8. Save up for big purchases.
  9. Remember your why.

1. Get on a budget.

First things first. Do you even know what you spend your paycheck on every month? I’m not asking if you have an idea—I’m asking if you know where every single dollar goes. If not, it’s time to start budgeting.

Budgets are like toothbrushes—everybody needs one. Taking good care of your money by giving every single dollar a job and tracking your spending daily is just good financial hygiene!

Trust me, you’ll notice spending habits you didn’t even know you had. (I spent how much on eating out last month?) Then, you can make the changes you need to not only cover the basics—but also plan for your future.

Another way to think about budgeting is that it’s custom organization for your money. And if you’re living the paycheck-to-paycheck life, your money needs some organizing. Don’t put it off. Create your first budget. Like, right now.

Save more. Spend better. Budget confidently.

Get EveryDollar: the free app that makes creating—and keeping—a budget simple. (Yes, please.)

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2. Take care of your Four Walls first.

When you first set up your budget, you write down your income. Then you’ll subtract your expenses—starting with the essentials (aka the Four Walls). The Four Walls are your top priority, so make sure your budget is ready to cover these things before anything else (in this order):

  • Food
  • Utilities
  • Shelter
  • Transportation

After you take care of those, make a list of everything else you need to pay for in order of importance. By starting with the Four Walls, you’ll know you’re keeping your family fed, your lights on, a roof over your heads, and gas in the car to get to work—instead of getting to the end of the month and realizing you don’t have enough to cover the necessities.

3. Cut extra expenses.

Once you’ve made a budget, look for areas where you can cut back on spending—or better yet, areas you can cut out completely.

Do you really need all those streaming services? If you feel attacked, I get it. But think about what you could do with the money you save. Fifty bucks here, $25 there. This cutting/spending thing can mean hundreds extra a month and thousands extra a year! And just when you think you’ve done all you can do, I’m here to tell you there are plenty more ways to save money and give yourself more margin.


Start budgeting with EveryDollar today!

And here’s a big one: Stop eating out. (Yes, I’m coming directly for you.) But seriously, meal planning will help you avoid the temptation of ordering food because you know what’s for dinner back home. Plus, you’ll spend less on groceries when you know exactly what you need to buy for the week, which frees up space in your budget and your fridge.

I know making sacrifices hurts, especially if you’re not used to telling yourself no. But this is a short-term sacrifice for a long-term gain. We are learning good money habits and going after big goals—so that later, you can do as much of that fun stuff (like eating out and traveling) as you want! And I predict you’ll realize during this journey that you can actually be content with less.

4. Start an emergency fund.

If you’re living paycheck to paycheck, chances are, you’re only one layoff or broken HVAC away from a full-blown crisis. That’s why you need an emergency fund! It’s your safety net for those “life happens” moments.

Start by saving $1,000 as fast as you can. That might seem like a lot now, but once you’ve cut some expenses out of your budget, you’ll be able to save up faster than you think. In fact, most folks are able to save $1,000 in 30 days!

And take it from me, knowing you have this buffer between you and life will help you sleep waaay better at night. Because you know if you get into a jam, you can pay cash—instead of going into debt to cover it . . . which brings me to my next point.

5. Ditch debt.

Debt holds you back. It’s got you paying off last year’s Christmas presents in June. And then you’re stuck paying off that beach vacation in December. You can’t get ahead like that!

And let’s be real: Debt is getting sneakier and sneakier. Traps like buy now, pay later plans are on the rise. They tempt you at checkout by saying you can pay for that air fryer in four easy payments.

I’ve even seen the buy now, pay later option on food delivery apps! (Okay, now I’m deeply disturbed.) Fact: If you have to break your food order into four, $13 payments, you can’t afford it. But I’ll take it a step further—if you have to make payments at all, you can’t afford it. Period.

Living with debt (of any kind) is one of the biggest things keeping you in the paycheck-to-paycheck cycle because the payments eat up your hard-earned income. But the time has come to break the cycle!

Here’s how: First, stop taking on any kind of new debt. Don’t take out a new car loan. Cut up those credit cards. Say no to saving 10% on that cardigan by opening up a store card (which will actually cost you more in the long run, trust me).

Next, pay off whatever debt you already have using the debt snowball. It’s the fastest way to knock out those payments (I know because I used this method myself to pay off all my debt—and trust and believe that debt was a doozie).

Just think: How much of your money goes to debt payments every month? That’s how much extra you can have in your budget when your debt is gone! Goodbye, payments. Hello, progress.

6. Increase your income.

If you’ve set a budget and dialed back the spending, but you’re still barely able to make ends meet, you probably need to increase your income.

Are you able to work extra shifts or longer hours? Are you a freelancer who can take on more clients? Do you need to look into getting a better-paying job altogether?

Maybe you need to take on a side hustle. Some great options for making extra money are waiting tables, driving for Uber or Lyft, being a barista, or working at a call center. It’s even better if you can use your own skills and interests to serve people.

My favorite side hustles while paying off debt were babysitting, cleaning houses, giving music lessons, dog sitting, building websites, and making wedding cakes. The best part about side hustles is that you can set your own price. And who knows? That side hustle could turn into your full-time hustle. Whatever you choose, the point is to get more cash flowing into your budget.

And once you get some more money in savings and kick debt out of your way, you can let off the gas a little—or maybe you want to keep hustling toward your other savings goals (like a house, your kids’ college funds, or your retirement).

7. Live below your means.

This one may seem like common sense, but don’t skip over it! Earning more money doesn’t make you a better manager of your money.

Don’t increase your income just to keep living a lifestyle you can’t afford. If you aren’t careful, a bump in pay can make you bump up your standards of living (that’s called lifestyle creep). Suddenly, you have more money in your bank account than you ever have before—and you start spending more than you ever have before.

Income doesn’t make you wealthy, how you handle it does. Remember why you wanted to increase your income in the first place. Stay intentional, pay attention, and stick to your budget!

8. Save up for big purchases.

Nothing makes you anxiously count down the minutes to payday more than if you just blew a ton of money on a big purchase.

So, if you see something coming up (like you notice the tread is getting real worn on your tires) use a sinking fund to save up and pay in cash. That way you’re putting a little away each month instead of blowing an entire month’s budget.

Also, if you’re living paycheck to paycheck, you should rethink making any nonessential big purchases—at least while you power through saving up your emergency fund and paying off your debt.

So, hold off on the vacations and other stuff you want (but don’t need), like that awesome gaming system a friend is selling or a new couch for the living room. Even if it’s a great deal, you need to wait until you’re in a better place financially.

9. Remember your why.

I know firsthand just how hard it is to stop living paycheck to paycheck. It can be slooow. It can be hard. Some days you might want to give up.

But when things get hard, remember your why. I always say: the stronger the why, the stronger the try. If it helps to think about the big future goals you’re working toward—traveling during retirement, giving your children a better life, buying that condo on the beach—then do that.

For my husband and I, we knew we had to break the debt cycle because we wanted to create a home for our kids and ourselves where money didn’t create angst. We wanted money to create ease.

But maybe you just need to think more short-term right now and imagine a life where there’s no fear of overdraft fees or your card getting declined. If so, then focus on that. Whatever keeps you motivated to take the next step.

Remember your why when you’re working that extra shift delivering groceries. Remember your why when you hold back from hitting Add to Cart even though you really want (but don’t need) those shoes. Remember your why when you skip the barista and make your own coffee.

Making big changes with your money and your life is tough. But you are tougher. Let your vision of where you want to be push you to keep going. I promise it’s worth it.

Stop Living Paycheck to Paycheck and Start Living

Living paycheck to paycheck can have you feeling like a rat on a wheel. You’re going around and around and never getting anywhere.

Break the cycle for good with Financial Peace University (FPU)! This nine-week class will show you how to save for emergencies, pay off debt, and build real wealth (without all the confusing financial mumbo jumbo).

FPU has helped millions of people take control of their money and get more breathing room in their budgets—and their lives. In fact, the principles taught in this class helped my husband and me pay off over $460,000 in consumer debt! And now it’s your turn.

You deserve to do more than just survive from month to month. With FPU by your side, you can ditch the paycheck-to-paycheck life once and for all.

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Jade Warshaw

About the author

Jade Warshaw

Jade Warshaw is a personal finance coach, bestselling author of Money’s Not a Math Problem, and regular co-host on The Ramsey Show, the second-largest talk radio show in America. Jade and her husband paid off nearly half a million dollars of debt, and now she’s a six-figure debt elimination expert who uses her journey to help others get out of debt and take control of their money. She’s appeared on CNBC, Fox News and Cheddar News and been featured in Fortune and POLITICO magazines. Through her social content, recent book, syndicated columns and speaking events, Jade is on a mission to change the typical American money mindset. Learn More.

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