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Break free from living paycheck to paycheck

Last Modified: October 08, 2021



This post was written by Heather Burgette, MBA, employee financial educator, Parkview Employee Assistance Program.

Are you tired of living paycheck to paycheck? You’re not alone. According to the research, 54% of consumers in the United States (125 million U.S. adults) are living this way, struggling to pay their living expenses. In fact,

  • Nearly 40% of those with annual incomes over $100,000 live paycheck to paycheck.
  • 53% of those who make between $50,000 and $100,000 annually live paycheck to paycheck.
  • 72% of those who make less than $50,000 per year live paycheck to paycheck.

Most of us are stuck in that never-ending cycle of earning and paying bills with nothing to show for it at the end of the month. There is a way out if you’re committed to the process. It’s possible to build a financial cushion and remove most of your financial stress even if you don’t have a high-paying job.

Gain financial freedom by taking control of your finances

If you’re ready to get out of this merry-go-round, here are a few ways to get started:

Get excited. If you’ve been living paycheck to paycheck, it’s most likely been going on for a significant amount of time. Make a list of the advantages of getting out of this cycle. Pay special attention to how you would feel.

  • You would be able to handle any financial emergencies, such as a broken furnace or the periodontist for your children.
  • You’d sleep better.
  • You could take a nice vacation.
  • What else can you think of?

Pay yourself first. It’s difficult to save any money if you don’t make paying yourself a priority. Consider your savings account to be a monthly bill that must be paid regardless of the circumstances. It’s not the last bill. It’s the first. No exceptions.

Get a handle on your spending. Everyone should have a budget. Do you? There are countless resources covering the topic of setting and sticking to a budget. Use them. In addition:

  • Make a list of all your purchases and review them at the end of each day. Every candy bar, magazine and soft drink are included. Even if it only cost a cent, write it down.
  • Avoid making big purchases without a waiting period. The urge to spend a lot of money will often pass after a couple of days.
  • Create a decision-making process before purchasing anything you don’t need. This can be as simple as asking yourself a couple of questions: 1) Do I need this? 2) Is this helping or hurting my goal of breaking free from my paycheck-to-paycheck lifestyle? Then remind yourself how great you’ll feel when your financial situation is better.
  • Eliminate unnecessary expenses. If it doesn’t help to keep you alive or employed, reconsider it.

Earn more. There’s a limit to how much you can cut your expenses, but there’s no limit on how much you can earn. Most financial gurus only focus on the expense side of the equation, but your options are ultimately limited. If you’ve been in your current position for at least two years, find out if there are ways to increase your pay rate through additional training, classes or certifications. Find a way to earn some money on the side. With the popularity of the internet, there are ways to earn extra money without leaving home.

Tough it out. It’s not easy to get excited if you’re only saving $30, $50 or $100 each month, but it’s a start. There’s a lot of inertia in your personal finances. It will take time to accumulate enough change to make a significant difference. It’s important to be pleased with your progress, no matter how small.

Most Americans are stuck in a cycle of living paycheck to paycheck. Even those with well-paying jobs are at risk. Just a couple of weeks without a paycheck would spell disaster. We saw this play out in March 2020. Though it seems like a long journey to break free of this cycle, it’s worth the time and effort. Not worrying about your bills or what the future may hold is a worthy goal.


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