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’s possible to make things better and gain back some financial stability. Goodbudget has some resources that might help, guiding you through some practical first steps to help you break the paycheck to paycheck cycle.
Here are two routes you could take:
- If you’re able to devote time and energy on creative ways to boost savings, then our course called Goodbudget 30: Break the Cycle might be the thing you’re looking for. In that course, you’ll spend 30 days working to boost your savings so you can begin building a one-month cushion to break the cycle. You’ll learn more about what one-month cushions are, as well as tips for preserving them for the long haul.
- Or, if GB 30 doesn’t fit your situation right now, our How to Stop Living Paycheck to Paycheck guide might be a better starting place for you. It contains a guide for building a budget where you spend less than you earn, helping you slowly build up to a one-month cushion.
Both Goodbudget 30 and the How to Stop Living Paycheck to Paycheck guide are great options that can aid you on your journey towards breaking the cycle.