When we asked some Goodbudgeters what their biggest money challenge was, we got a wide array of responses. But there was one theme that really stuck out: it’s hard to get ahead.
The challenge of getting ahead can manifest itself in many ways. Sometimes it means it’s hard to save or pay down debt. Other times it means that there’s no money left at the end of the month. Or it could mean that, just when you think you’ve saved some money that month, a big surprise bill hits and sets you back again. Regardless of how this challenge shows up, oftentimes the underlying issue is living paycheck to paycheck.
What is living paycheck to paycheck?
Put simply, living paycheck to paycheck is when most, or all, of the income you earn is spent almost immediately for bills or other necessities, leaving little for savings or other things. On top of that, folks living paycheck to paycheck often don’t have savings to fall back on if an emergency expense pops up or if a paycheck comes late. For those of us that are living paycheck to paycheck, it means that even if we pay all of our bills, it can be a juggling act to make sure there’s money for the rent payment that’s due, as well as next week’s groceries.
If you’re part of the 78% of working Americans that live paycheck to paycheck, you may already know about the physical and emotional stress that can come with it. Living paycheck to paycheck can put a huge strain on your mental health, and may cause you to feel anxious or disconnected from friends and family. It can be debilitating to say the least. And the financial impacts can be just as acute. You may feel like the Goodbudgeters who responded to our survey, who said they couldn’t save up or pay down debt. When you can’t get ahead, you can’t build up an emergency fund to protect yourself against unforeseen expenses. You may have a hard time paying down burdensome debt that keeps you from focusing on other money goals. You may even turn to credit cards or personal loans to manage expenses, putting you in even more debt. The list goes on.
There may be a way out.
Unfortunately, the reality is that many economies aren’t designed to be equal for everyone. That means some may have to try three times harder to break the cycle of paycheck to paycheck living. But that doesn’t mean the fight isn’t worth it.
If you’ve been feeling stressed about money, or tired of not being able to get ahead, know that it is possible to make things better and gain back some financial stability. Goodbudget can help by guiding you through some practical first steps to help you stop living paycheck to paycheck.
To give you a brief overview, start off simple by taking a look at your spending to see where it’s actually going.
Next, create a budget in Goodbudget that you can stick to, based on your income and past spending. Make sure that saving for an emergency fund or paying down debt is part of that new budget so you’ll be motivated to make it happen each week or month.
By understanding how you’re spending and making a budget that makes sense with your income, you may be able to start breaking the paycheck to paycheck cycle little by little.