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How to Stop Living Paycheck to Paycheck: 7 Steps

Written by admin on Jun 5th, 2008 | Filed under: Uncategorized

One of the worst feelings in the world is working hard all week long, only to watch your paycheck completely disappear as you write checks to pay your bills.  If you’re tired of living paycheck to paycheck and never having any extra money around to save or take a holiday, there are a few things you may be overlooking that could help you stretch the money you make while reducing the amount you have to pay each month:

  1. Set a goal.  When you have something specific to work towards, it can make it easier to find ways to make it happen.  Be very specific when defining your goal, and write it down.  You might have a goal to save £300 in your rainy day fund, or something as simple as having an extra £50 available to go to the movies or dinner.
  2. Determine where your money is going.  For one month, keep a notebook at your side at all times, and record every penny you spend and what you purchased with it.  This will show you where you could cut back on unnecessary spending, and give you an accurate picture of what you really do with your money.  You may not realize how much those quick stops at the store on the way home from work add up – and on snacks and items you don’t really need.
  3. Consolidate your debts. If you have substantial outstanding debts, it might be worth considering a consolidation loan. This is a low cost loan that you use to pay off all of your expensive credit cards and loans, then pay off through one more manageable monthly payment. For a table of the cheapest loans available in the UK, take a look at, while you can work out what you can afford easily by using Alliance and Leicester’s loans calculator.
  4. Pay on time.  Make every effort to pay your bills before they are due to avoid extra fees and charges.  It will also prevent your interest rates from being raised.
  5. Create a budget.  Armed with your notes from a month’s worth of spending and bill paying, figure out a budget that will work for your family. Remember the goal you set?  Create the budget to accommodate that goal as well as you’re spending and expense needs – it will make it easier to stick to the budget. has a very useful budget planner on its website.
  6. Clean out!  Everyone has stuff they don’t need or use any more.  What are you saving it for?  Sell it in a yard sale or on eBay and generate some extra cash for the things collecting dust around the house.
  7. Participate in a work savings plan.  With your budget in hand, and your newly trimmed spending habits, you may be able to join an employer sponsored savings plan and contribute pre-tax money to an account.  If your employer doesn’t have any type of savings plan, set up a direct deposit into a separate savings account of a certain amount each pay period.
  8. Consider a second job.  Most people don’t enjoy working two jobs, but if you’re dedicated to paying off your debts, a second job can speed up the process and get your financial situation back in check.

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