Living paycheck to paycheck is so frustrating.  There is increased stress when you don’t know if you can cover all of your bills.  If an emergency comes up, you can just feel your stomach drop. Can you actually afford to do this thing that has to be done?  Why is it so hard to master money management?

I know that feeling all too well like when you are ready to make a purchase, and you aren’t quite sure if you have enough money to cover it.  You hold your breath as your card is processing…..phew!  It worked!  You live to fight another day!

You just ignore your money until you get close to being really low in your bank account, then you go on a spending freeze until the next paycheck.  There is a constant feeling of being “okay,” to then being panicked about having enough to make it to the end of the month.

I used to live like this during my internship year after vet school.  I was working too many hours during the week to pay attention to money which left my husband to be in charge of our finances.  His style of management was exactly what I just described.

In his mind, there was a certain amount of money that we had to have in our account at all times.  If we dipped below that amount, he was in a panic and we were on a spending freeze. It made me feel like we might lose everything at any second.

But, when we weren’t on a spending freeze, we would eat out, go shopping and do whatever we wanted.  When we had money (ie. the first 10-14 days of the month), life was good. But, the second our bank account dropped below that cut off my husband had in his mind, we were in conservation mode…like living with the lights off to lower our electric bill conservation mode.  It was serious.

We were broke.  We ran out of money every month because we didn’t pay attention to what we were doing.  We couldn’t even afford our rent. We had a family member essentially supporting us for an entire year.  Instead of taking advantage of it and saving money, we took that as having that much more money to spend elsewhere.  So dumb.

We didn’t have time for a lot of activities so we used going out to eat and shopping as our entertainment.  We found joy in acquiring more things. All of our joy came from spending money. The money we definitely didn’t have.

It’s a weird pattern that I figured out about us.  The less money we made, the more we spent.  Are you doing this in your own life? I didn’t even realize it until looking back. The same goes for some of the veterinary technicians and assistants I work with.  I notice that they will go out to eat every day and I pack lunch.

They don’t make very much money, yet they spend it eating out because it is fun and entertaining.  I have a salary now, and I pack my lunch every day to save money. It is a pattern I see over and over, and I have lived it myself.

I spent more money when I didn’t have it because I was unhappy and was trying to find joy somewhere.  Now that I have more money, I don’t need to spend it because I am happy with what I have.

If you want to go from broke to wealthy, there are steps you can take to get there.  If you want to stop living in the paycheck to paycheck cycle, you can get there. Being broke is not a good reason to just throw in the towel altogether, which is what my husband and I did.

During that internship year when we had more month than money, we gave up on being successful with our finances.  We didn’t budget, we barely monitored our bank account, we spent money we didn’t have and we were unapologetic about it.

We gave up financially because we felt so bad about our situation.  We weren’t willing to change anything to make it better. We lived like this for a year and a half before we made any changes to how we managed our money.

Instead, you should be driven to get out of the paycheck to paycheck cycle and start making financial progress.  

5 Money Management Tips to Stop Being Broke:

Money Management Tip #1:  Assess Your Current Situation

There has to be a beginning to your financial journey.  Stopping and taking an assessment of where you are right now is step one.  If you don’t know where you are, you won’t know how to improve for the future.

If you are living paycheck to paycheck, there is something (and probably more than one something) that needs to be improved.  The best way to really see your financial situation is to figure out your net worth.

Debt

This means you will take a sheet of paper and write down all of your debts.  Just list them out. Owing money on anything to anyone constitutes as debt. If you borrowed money from a family member, write it down.  If you financed furniture for your sick new house (that you can’t afford), write it down. If you have massive student loans that are crippling your future, write them down.

One debt you don’t have to include in this number is your mortgage.  This will be a totally separate entity.

After you have written down all of your debts, add them up.

Assets

On the second piece of paper, write down all of your assets.  An asset is anything of value that you own 100%. This includes vehicles (get the approximate value from Kelly Blue Book), a home (use Zillow for approximate market value), any jewelry that has been appraised and any other recreational vehicles.

All of the other “stuff” in your life can be worth a blanket $3,000-$5,000 depending on how much stuff you actually have.

After you have written down all of your assets, add them up.

Ready for the moment of truth?

Take your Assets minus your Debt and this equals your Net Worth.

Once you have this number, just know this is only your beginning.  If you have zero net worth or even a negative net worth, you can change it.  

When I first did this in 2015, I had a negative net worth of over half a million dollars!  That’s insane!! No matter where you are, this is just the beginning and things are going to change from here.

Money Management Tip #2:  Say No to Debt.

If you are absolutely serious about turning around your financial situation, you have to stop making it worse.  If you have debt, you have to stop taking on more debt.

If you are struggling living paycheck to paycheck, you can not make your life better by taking on an insane car payment because you “need” a reliable car.  It just doesn’t work that way.

If you want to change your future, you have to decide to not take on any more debt, ever.  There are no excuses for this. You do not borrow money for any reason. You will not put yourself further into the hole.  

There is no way around this, you can not take on more debt.  You have to decide from this day moving forward you are only making positive changes concerning your money.  You are only beginning to build wealth, get out of debt and change your future for the better.

No more debt.  Ever. There will nothing so important that you have to borrow money for it.  Instead, you will save up for whatever purchases you need to make, and you will have an emergency fund to take care of those surprise expenses.

Money Management Tip #3:  Set up a Budget.

This may be the single most important thing you do to change your financial future.  Your budget is the financial road map that you will follow to be successful with your money.  

Do you want to stop living paycheck to paycheck?  You need a budget!

People get all freaked out when they hear the word budget because they suddenly feel like they’re in a straight jacket.  What’s insane is, it really is the exact opposite that happens.

When you know how much money you have in your account for the month, you have a plan for all of those dollars, and then you follow the plan………you have zero stress!

There is no question where your money has gone.  You won’t reach the end of the month sweating bullets as you swipe your debit card for food, praying it gets approved.  You won’t have to deal with any of that.

If you write down a plan and follow the plan, you will have security knowing exactly what your money is doing.  And, if you screw up, it’s only your fault. You have no one else to get mad at. Nobody else is trying to control you.

Feelings of constriction happen when you make yourself start to change your lifestyle and spending habits.  The budget doesn’t do that to you, your own choices do that. But here’s the amazing thing, when it’s YOUR choice to cut expenses and live below your means, instead of feeling constricted, you are going to feel empowered.  

You have made the choice to live this way.  No one else said you had to. You have decided you want a better future and you are going to make sacrifices.

That’s freaking empowering!  You are going to feel like you can conquer the world.  In no way does that feel restricting.

Let’s look at this a little differently.  Say you are going on a diet where you count calories and you get 1,400 calories per day.  The nutritionist tells you, a calorie is a calorie, you just can’t go over 1,400.

When you first start this diet, you may be using up your calories with Oreos and Reeses Peanut Butter Cups (I know I would).  You feel good because you aren’t deprived which keeps you motivated to continue with the diet. You start to lose a little bit of weight, but you feel a bit tired and the snack food isn’t super filling.

You decide to change your food to healthier foods that are lower in calories and more filling to be able to eat more and still be within your calorie total.

Once you start doing this you are feeling fantastic and even more driven to stick with the diet.  You have made healthy choices, you get to eat more and you don’t feel like you are sacrificing because YOU have chosen the foods you want to eat.

See how that works?

Budgeting is the exact same thing!  You can budget for all entertainment, clothes, and cosmetics and stay within budget and feel great.  But, once you start taking control of your money, and not feeling deprived, you will want to change your lifestyle to squeeze even more money out of your budget.

It will be a natural progression.  I don’t care if you spend the first three months of budgeting, doing it so you can spend more on clothes.  Just learn to budget and figure out how it works.

Eventually, you are going to want more money to accomplish your goals, and when that happens you will start to cut expenses somewhere.

My guess is clothing will be one of those areas you cut.  But, instead of feeling bitter about it, it will be your choice and you will feel amazing and encouraged by the sacrifice you are making.

Experts say budgeting is 80% behavior and 20% math.  I completely agree with this. Your behavior is running the show.  You just need to start and then that behavior is going to take over and guide you to be more successful with your money.  Things will be better than you ever could have imagined them.

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Money Management Tip #4: Decrease Your Expenses.

In order to stop living paycheck to paycheck, you have to find extra money every month to build up an emergency fund, or a sinking fund, or pay off debt.  If you budget but never find extra money somewhere, you will never break the cycle.

Cutting costs is one of the easiest ways to find more money and feel like you have given yourself a raise.  There are a million ways to decrease expenses, especially if you are willing to get a little bit creative.

• Stop eating out
• Make food substitutions that are cheaper (generics, shop in a different grocery store)
• Make coffee at home = NO MORE STARBUCKS
• Cut cable
• Downgrade your internet speed
• Change cell phone providers
• Put all vacations on hold
• Cancel gym memberships
• Stretch the time between haircuts
• Stop going to the movies
• Stop buying clothes
• Cut up your credit cards
• Stop contributing to your 401K (if you are focused on debt payoff)
• Use less product at home (cleaning, bath, and body)
• Reconsider adding pets to your life
• Cut out yogurt, potato chips and pop
• Meal plan
• Grocery shop once a month

There are tons of ways to decrease expenses, you just have to be willing to make some changes that may feel very much outside of your comfort zone.

One of my favorite quotes is

“If you want something you’ve never had, You must be willing to do something you’ve never done.”

~Thomas Jefferson

This says it all in one sentence.  If you keep living the same way and expect to break your paycheck to paycheck cycle, it isn’t going to happen.  You will keep doing the same things over and over with no end in sight.

But, if you start to change how you live and do some things you’ve never done before, you will end the paycheck to paycheck cycle.  I guarantee it. If you want extraordinary results, you must do something extraordinary.

You can not keep doing the same things and living your life the same way and expect things to just magically change.  It just doesn’t work that way.

I used to wish for some long lost uncle to come and hand me $250,000.  I swear I wasted more time on that daydream when I should have been brainstorming ways to decrease my expenses.  

Nobody is going to come and save you.  Nobody is going to just drop a chunk of money in your lap.  I wish they would, but I don’t want you to spend your time wishing for something that isn’t going to happen.

You are going to have to take care of yourself and start to change your life by putting in some work.  None of this is hard. It truly is just making a series of small changes and decisions over and over until you achieve your goals.

If I can do this, so can you.  I have no doubts. Out of that quick list I gave you of ways to cut expenses, I want you to commit to one change today.  This is you taking one step to change your finances and stop living paycheck to paycheck.

Make one small change today.

Money Management Tip #5:  Increase Your Income.

There are only two ways to find more money to work with for your life:  

• decrease your spending
• make more money

This can be a hard one if you are used to living a certain lifestyle where you have free time to do whatever you want.  This can also be challenging if you have a family and struggle with wanting to spend time with them.

The obvious way to increase your income is to get another job.  Find another source of income. This can be a traditional part-time job, an online job or selling a bunch of stuff you don’t use to make up some income.

I have done all three of these things.  I have also done them with and without a family.  I am a full-time veterinarian, but 8 weeks after I had my first child, I started working part-time at a Starbucks.  

It was a minimum wage job, but it was still extra money.  Eventually, I moved on from that to doing some online freelance work related to veterinary stuff.  Then I started a blog which is definitely not a get rich quick scheme.

In the midst of all of that, twice a year, I go through all of our possessions and sell anything we haven’t used in the previous six months.  Selling stuff alone has easily gotten us $3,000-$4,000.

My husband started a side job making Christmas trees out of pallets.  He makes enough to pay for our Christmas every year.

I know there are only so many hours in the day, and if you have a family, you want to spend time with them.  But, if you are trying to stop living paycheck to paycheck, you have to make more money. This may mean you don’t see your family very much for a season of your life.  

If you are resistant to that, let me ask you this.  Right now, if you are living paycheck to paycheck and you see your family a lot, are you relaxed when you are with them?  Deep down are you peaceful and really soaking up every moment? Or do you have a little cloud above you and quiet whispers of negative thoughts in your mind slowly eating at you because you are stressed out about your money?  

Do you enjoy doing outings with your family or do you worry every time you swipe your debit card to buy things you didn’t plan for?  

My point with these questions is, will you be a better parent for your children and be truly peaceful in your life when you don’t have money stress?  Your kids are not going to hate you for working more. Your kids will learn the value of hard work and value the time you spend with them.

Using your children as an excuse to not better your financial situation is a cop-out.  My husband tried to do this with our family as well.

10 years of time is going to pass whether you are trying to fix your finances or not so why wouldn’t you better your situation?  You are going to become 10 years older either way.

Find another source of income.  If you don’t have enough money at the end of the month, you need more money.  It really is as simple as that. Getting a second or even third job will not be permanent.  

Once you have your money in a better situation and you know how to make it work for you, you don’t have to sustain the multiple job life forever.  

But, when you have more than one job, make sure you are making the sacrifices count.  Do not spend more when you make more. Use the money wisely to begin to get ahead, pay off debt and build your retirement.  Make it count!

Living paycheck to paycheck can feel like you are living through a constant earthquake.  You keep waiting for the ground to fall out from under your feet. No matter what your circumstances are, you do not have to keep living like this.

If you can face where you are today, vow to never take on more debt for tomorrow, then it is just a matter of putting new practices into play.  This means you will start using a written budget, decrease your expense and increase your income until you are just kicking butt!

This is doable.  It requires effort and sacrifice, but you can absolutely do this.

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