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I’m Living from Paycheck to Paycheck. Help!

According to Forbes, 78% of workers live from paycheck to paycheck. Follow these tips to help you seal those money holes that are draining your income.

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According to Forbes, 78% of workers live from paycheck to paycheck. Follow these tips to help you seal those money holes that are draining your income.

Photo credit: Cookie_studio

One of the suckers of joy when it comes to working is living in lack even when you have a regular salary. How disappointing and demotivating is it when you have to be frugal, not by choice but because circumstances have forced you?

The stress that grips you in the middle of the month when you realize that you have very little to live on for the remainder of the month is debilitating. It leaves you coming up with contingency plans that sink you into further problems such as getting into bad debt to finance your lifestyle.

If there is no intervention done in time, the vicious cycle of failure and lack will only get worse. So what should you do?

Firstly, you should realize that you’re not alone. According to Forbes, 78% of workers live from paycheck to paycheck. Therefore relax and don’t get drowned in anxiety. Rather be sober and get your head in the game because it will help you make rational decisions concerning your money moving forward.

The following are some of the tips that you can employ to seal those money holes that are draining your income.


Track your expenses

When someone goes to the hospital for treatment, the first thing the doctor does before commencing treatment is diagnosing the source of the problem. Tracking your expenses is like diagnosing where you lose the bulk of your income.

In my opinion, diagnosis is the most important part of the journey towards financial freedom. A couple of years back, I was an apprentice in one electronics repair shop and for every damaged device, there would be a very detailed evaluation of the damage procedure. Once the source of the damage was revealed, it determined the kind of intervention that would be most appropriate for that problem.

Tracking your expenses means recording every shilling you spend for the month. Don’t leave anything out including the subtle yet dangerous transaction charges. For example, when you use electronic money transfers, they always attract transaction fees. Many people often tend to overlook and ignore those little money suckers yet their impact on your money is significant.

Personally, I decided to monitor my transaction fees for a month and discovered that it took up almost more than 2% of my income. I had to make changes and bring those fees to a minimum. The most important part is forming a habit out of it such that you’re always conscious when spending money.

You should consider withdrawing money in bulk for your needs and paying physical cash for your expenses where necessary. This will greatly bring down your transaction expenses.

According to Dave Ramsey, one area that bleeds people’s cash in a devastating manner is eating out. Restaurants are fun and enjoyable, but they are an unnecessary expense that you can do without. Additionally, you should also check your spending habits on snacks and impromptu lunches.

You need to learn how to tame your urges and cook food at home.


Customize the solutions to your needs

These general solutions can only effectively work for you if you tailor them to your lifestyle. It’s like a material from which you cut out a cloth that fits your body type. Once you observe your expenses you’ll be able to see what you can do with or without.

The problem with taking financial solutions from the internet and copy-pasting them into your life is that they will further worsen your problems. You should look at how these solutions can be applied to your life in particular because we all go through different challenges and needs.

For instance, monthly expenses between a man and a woman would differ significantly because demands and needs are different. As such, a woman’s budget will look different from a man’s budget. Generally, men are more minimalistic compared to women.

Similarly, a husband and a bachelor have different needs and responsibilities therefore their financial plans have to be customized to accommodate their different lifestyles.

This point should be coupled up with spending less than you earn. Financial experts at Centonomy advise that you should spend 50%, save 20% and invest 30% of your income.

Make the sacrifices you need to make even if they are painful. If for instance you’re single and you live in a two-bedroomed house, you should move to a one-bedroom house or even to a bedsitter establishment to minimize your rent expenses.

It’s not pleasant but the results are impressive if you are patient with the process. The solutions that I’m proposing don’t give instant results but they require patience and discipline. Because the end goal is forming the habit of making sound financial decisions for the rest of your life.


Live on a budget

John C. Maxwell says formulating a budget is telling your money what to do. Having done this for a while I would recommend you observe your expenses first before you come up with an appropriate budget. As discussed in the previous point, you need to know your needs and distinguish them from your wants.

Your wants are things you like and can do without but your needs are those things that you can’t do without. Having known what your outflows look like, make a budget as soon as you receive your monthly salary and stick to it as much as possible. You will be tempted to go over your budget a lot and there are times where you will fail.

But even in failure don’t give up. Dust yourself and get back on track as long as you’re making progress. Start by making baby steps and with consistency and discipline you will grow towards perpetual success in your finances.


Increase your incomes

Side hustles that supplement your income are advantageous when it comes to living in financial peace. Taking on an additional job could be tasking and pressing. But an extra income will help you break the cycle of living from paycheck to paycheck and promote you to living abundantly.

One of the best ways to get a side hustle is to leverage your skills and talents. Look for freelancer sites such as Upwork and Fiverr and update your Fuzu profile.


Think long-term

Set goals for your financial life and let them guide you. The late Zig Ziglar is famously known for saying that if you aim at nothing you will hit it 100% of the time. Choose to live a better life and agree to make the painful changes because whether you like it or not, financial freedom comes at a cost.

Also, ensure that you get out of debt and minimize your credit intake because interest rates will keep sucking the life out of your paycheck. Only take loans when you absolutely need them and you have an elaborate repayment plan. Start your journey towards financial peace today.

Written by

Wahome Ngatia

Peter Wahome Ngatia is an all rounded Marketing Specialist who deals in Graphic Design, Social Media, SEO and Content Writing. My passion is to use my skills and knowledge to help African businesses grow and thrive so that we can create employment for the youth. I also want to churn helpful content that inspires millennials to go hard after their dreams. Mantra: You learn more from failure than success.

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