4 Steps To Stop Living Paycheck To Paycheck

Are You Living Paycheck To Paycheck? Start With These Simple 4 Steps

It’s getting close to the end of the month, funds are tight or non-existent and you tell yourself, “I just need to wait until my next paycheck and I’ll be okay.” Many of us have been there and many are still there. Living paycheck to paycheck can seem like a rollercoaster and groundhog day all rolled into one.

When the next paycheck arrives there can be a feeling of relief that is shortly thereafter followed by dread and worry as the money dwindles. Repeat next month, and the next, and the next. There is a way to get off this paycheck to paycheck carnival ride.

The Statistics

In December 2020, a CNBC article by Megan Leonhardt reported that based on a Highland Solutions survey of roughly 2,000 U.S. adults, 63% of Americans have been living paycheck to paycheck since Covid-19 began. That number was at 47% prior to the pandemic. Additionally, the article stated 64% of millennials reported they are living paycheck to paycheck.

Highland Solutions

These are alarming statistics. Living paycheck to paycheck is not fun and it is stressful. It also takes up your precious time worrying when your time could much better be spent living your life and pursuing your dreams. So how do we get off this stomach-churning paycheck to paycheck ride?

Start Taking Control of Your Money

Empowering yourself financially is a process. It is often not a quick fix but there are steps you can take immediately. Steps that will help you to start taking control of your personal finances. Once you start on the path to financial wellness you can continue to get more and more financially fit but you have to first get on the path. So let’s start walking together.

1. It Starts With Eyes Wide Open

  • List all your monthly expenses yes, write them down either on a piece of paper or on your computer. There is something about writing down your expenses that makes them materialize more. (If you don’t know everything on which you are spending money- start keeping track daily. Do this for a month. It will be enlightening and worth your time)
  • List your monthly income. All sources of income.
  • Do the math. Income minus expenses.

This basic accounting of what you earn and what you spend is one of the first steps to understanding your current financial situation. You have to know this in order to move forward. When you take the guesswork out of personal finances you start to take back the control. You are being accountable to yourself.

2. Where Can Adjustments Be Made?

Although it is not the best scenario if your math shows you have more money going out than coming in, at least now you know. Once you have the actual numbers, you can do something about it. First, look at your expenses. Sometimes there are expenses you can cut or eliminate that you really don’t even want or need.

One easy example: I reduced my monthly television bill. I mainly watch Netflix and hardly ever touched a premium television channel, so I switched to a much lower-cost monthly plan. This is just one simple example. There are many ways to cut expenses.

Grocery shopping is another place where if we don’t keep track, the food spending can get out-of-hand. If my monthly budget is running high, groceries and personal care items are one of the places I look to adjust. It’s incredible how much money you can spend at the drug store if you are not paying attention. Just yesterday, I put down a package of cute hair scrunchies. Definitely, a want, not a need- I have a drawer full at home.

Remember, we are going somewhere with this- moving towards financial wellness and ultimately financial freedom. None of this is deprivation or scarcity thinking. It is taking a good look at where you are now and being honest with yourself.

You learn how to be in budget so you can begin to make your money work for you. Scrambling just to make ends meet causes stress not freedom. Becoming aware and taking control of your money situation is where the freedom begins.

3. A Client’s Commitment to Her Budget

Increasing your income is another way to get in budget. In today’s world there are many ways to create multiple streams of income.

I asked one of my young clients, in her early-twenties, if I could share part of her story. Let’s call her Carly.

Carly had recently graduated college and was renting her first apartment. She had a good job but the apartment she wanted to rent was a little more than she could afford.

She came to me to create a budget and figure out how to make this situation work for her. After our first session, it was clear to both of us how much she wanted the apartment. Her expenses were already trimmed, so another option was to get a part-time second job.

The part-time job she acquired was driving children to school before her primary job started. She made a conscious choice to have the more expensive apartment. Carly was willing to do the extra work to make it happen.

Carly did this while still putting money into her 401K plan at her primary job. As the 401K is part of her long-term financial freedom vision. She understood that investing young for retirement is one of the keys to that freedom.

Soon thereafter she got a promotion and the second job was no longer needed. Her commitment at a young age to not go into debt for a want was a smart move.

Today, Carly continues to budget, invest, and grow her emergency fund. She has started the path to financial freedom at a young age and it puts a smile on her face and mine.

4. Let’s Continue To Talk About Money

Paycheck to paycheck living is not only stressful but it doesn’t allow you to have money to create an emergency fund, invest, and save for retirement. Paycheck to paycheck living keeps you stuck. I don’t want you to be stuck, I want you to be financially free.

In the financial responsibility ultimately lies the financial freedom.

Susan Howell
Written by: Susan Howell, The MoneyMaestra.

Even though I grew up without money, I was able to retire at 50 based on my financial practices. I worked for the Federal Government for 26 years, with 6 of those years at the IRS and 20 at the Department of Justice, which included investigating many money-related cases.

I created MoneyMaestra to share what I know and to help people get on the path to Financial Freedom.


  1. Cheryl

    This is such sound advice. I’ve resisted budgeting out of a combination of laziness and not wanting to ‘cut’ things out of my life. I’d rather just work harder and make more money. And, after working with Susan, I decided to track my expenses for a few months just to see where my money is going. That knowledge gave me clarity on what I spend without changing a thing. From there I was able to set strategic savings goals and know how I can shape my future in a more intentional way.

    • Susan Howell

      Cheryl, thanks for sharing this. Many people resist budgeting for a multitude of reasons. As you discovered tracking your expenses gives you clarity and lets you be aware and in control of what you spend. A monthly budget is a key building block on the path to financial freedom. I am happy to know you have strategic savings goals and are moving towards those goals intentionally. Keep us posted!

  2. Karyn Keil

    I have always known my expenses and income ratio, but since being laid off during the pandemic I needed to find ways to decrease my expenses. I took a look at my “trouble spots” which were spending too much at CVS and on grooming (nails, hair, toiletries, etc.) At first, it was a challenge to change my patterns. I found it best to only use the drive-through window at CVS to pick up prescriptions, since I didn’t want to face temptation inside the store. Now, I use coupons and find the best deals on products or services I want. When I stop to think how many hours I have to work to pay for an item, it puts it into perspective. I don’t want to be a slave to debt or worry about making ends meet. That reminds me to keep my spending in-line with what I can currently afford. And I think it will be even easier to save money once my income increases again because I am now comfortable with not making impulse purchases.

    • Susan Howell

      Karyn, thank you for sharing. Yes, a trip to CVS or Target can turn into over spending on items that we don’t really need but are impulse buys and feel good at the moment. Kudos for going through the drive-through prescription line to avoid the temptation. There are so many creative ways to change our money patterns if they are not serving us. Using coupons and searching out the best deals saves quite a bit of money and makes you think more about what you are purchasing. Absolutely, now that you have changed your spending habits, when your income increases you can pad your emergency fund, invest, and increase your retirement fund. When you learn to spend at or below your means, at least some of the extra money from an increased income can be used to get you further on the path to financial freedom.


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