People are really struggling in this poor economy. They are faced with downsizing, foreclosures and debt out of control. The paycheck to paycheck syndrome is not new. There has always been some portion of the population that was living paycheck to paycheck. This poor economy and the housing crisis has been the catalyst to more people living paycheck to paycheck. You may think that only poor people live paycheck to paycheck, but the middle-class are also victims. When you barely have enough income to pay your expenses you are living at risk. An unexpected emergency can push your finances into total chaos. A person in this situation cannot afford to take on any additional expenses. A person could be very talented or have skills and abilities that they would like to pursue outside of the 9-to-5 job but because they are stuck in this never-ending cycle of barely making ends meet, they cannot figure out how to leave the comfort the current job to pursue their dreams of the future. Some people are in worst shape because they don’t have enough income to cover their monthly bills, so they are turning to credit cards or payday loans to pick up the slack. Of course, this is definitely not a solution. It is an action that will lead you deeper and deeper into a spiraling debt trap.
You can get out of the paycheck to paycheck cycle but it will take commitment, determination and a plan. There are various reasons why people are stuck: 1) more expenses than income 2) spending more than their income. There is a solution! If your expenses are more than your income, you need to implement one of these action steps: 1) Increase your income with an additional job or alternative income making venture; or 2) Decrease your expenses. If you are spending more than your income, you need to track all your expenses for a month to determine where money is getting away from you. Then, you need to cut out the waste. 3) Create a spending plan which you decide upfront how you will spend your paycheck. 4) Save more money than you spend. Make savings number one in your spending plan. If you don’t make savings a priority it will never happen. Savings is the key to destroying the hold of the paycheck to paycheck syndrome. In addition to making savings a priority also make a commitment to stop creating any debt or using credit. Imagine your life with abundance and with money leftover at the end of the month. No more barely surviving from paycheck to paycheck. As you build your savings consider building an emergency fund that will cover you in the event of an emergency, so that you will have the money to cover those costs. Remember savings is key! You can’t break the cycle without savings.
