226-378-7748 joe@budgetboss.ca

Tuesday, October 9, 2018

Stop Living Paycheck to Paycheck

Why is Friday always the most popular day of the week? The answer is pretty simple. For most people, it means they don’t have to go back to work for 60 hours. 50% of the time it is also payday for the majority of people as well. Now I do not think my way is the correct way for everyone, but I also don’t believe any of us should be too excited for either Friday or payday. These small arbitrary weekly milestones say a lot about the person who is celebrating them. Chances are if you are happy its Friday, you hate your job. Chances are if you are happy it’s payday, you need that money. Having been through both of those circumstances I have a bit of insight on them. Hating your job is a tough one, but living paycheck to paycheck can be corrected. Today I am going to give you my tips on breaking the cycle of living paycheck to paycheck. Over 30% of Canadians state that this is how they live. Let’s change that stat, starting now.

 

Stop Anticipating Payday

This one is tough. We all know when payday is and it is hard to not get a little excited about when the big day is. I will suggest that maybe you are happy about a payday for all the wrong reasons. Most people think about payday in terms of what they will do with that money they get, ie: shopping, nights out, etc. I suggest thinking about payday in terms of what you will accomplish with that money. This could and should include saving, paying down debt, getting ahead on bills. These tasks will get you out of the paycheck to paycheck zone. Chances are it is shopping or nights out that got you into it. It all comes down to looking at money as a tool to achieve the things you want like living comfortably and being debt free.

 

Track Spending

Once again, you are more than likely in this zone because you lost track of spending for a month, or year, or ten years. Tracking your spending will help you narrow in on the crap that you really don’t need to be wasting money on. I will try to say this as politely as possible. Broke people don’t get new stuff or go on vacations or spend $7 on a coffee, or at least they shouldn’t. If you live paycheck to paycheck then you should not do these things. I guarantee that if you track your spending for a month you will find at least a couple hundred dollars spent on crap you can live without.

 

Go Ghost

There is absolutely nothing wrong with taking a week off, or month off, or even a year from being a social butterfly. I took 5 years off. Kind of payback for the excess of my early 20’s. Times can be tight and when they are there is nothing wrong with chilling at home watching Netflix with a box of wine. Your true friends should understand that you are trying to accomplish something. If they don’t understand then forget them. Look at it as a workout for your wallet. Keto-wallet training…

10 Ways to Avoid “Lifestyle Creep” – Budget Boss

 

Booze

Speaking of boxes of wine, booze is damn expensive. It might actually be the one thing in our society that we spend the most on that actually serves no legitimate purpose. Now I would never tell people not to drink because quite frankly I enjoy a drink here and there. The truth is that spending a lot of money on booze has no appeal to me whatsoever anymore. Drinking at an establishment is extremely costly and starting your Friday off with an expensive night out boozing makes your 2 weeks without a paycheck very difficult. It is very easy to spend $1000 a month on drinking and all you get out of it is nasty hangovers. Again, I won’t tell people how to live their lives, but mine got dramatically better when I decided that having 1 or 2 was enough for me.

Financial Advisor

 

Dining Out

Here’s another money grab for you. Restaurants charge absurd prices for their meals and it gets worse all the time. Now I love someone else cooking for me and I even enjoy dining out. For me, however, it is just the social aspect of it. This whole “foodie” craze is ridicules in my opinion. I would love to just be able to go out and enjoy the company of good friends without having to eat some greasy line cooks version of chicken parmesan. $20 for noodles and sauce…..sounds good! I have seen hundreds of people’s personal finances and the ones who in turmoil all have one thing in common: They dine out too much. It is a surefire way to be trapped in the paycheck to paycheck zone.

 

Earn More Money

Sounds simple right? It really is simple. In order to have the life you post on your social media, you have to have the money to back it up. That often requires a second or even third job for some people. It definitely requires working hard for what you want. There is absolutely nothing shameful for working a part-time job to pick up some extra cash. Even something as simple as an extra 8 hours a week waiting tables can net you an extra $800 a month. That is savings money, debt repayment money, vacation money, heck even booze money if that’s your thing. The key is to understand that making more money should be a lifelong pursuit and you will never get ahead unless you do.

How to Stop Living Paycheck to Paycheck – The Balance

 

Avoid Traps

Paycheck to paycheck is a zone of bad decisions. Here is what I mean. If you have a plum savings account, zero-balance credit card, and all your bills paid would you ever take out a loan from the bank with a 700% interest rate? Of course not. Yet people wait in line at payday loan stores and do it daily. You must vigilant to avoid traps that will cause you a headache on the back end. This includes buying choices as well. 0% interest for your furniture sounds great as well, until 18 months later the bill is due and you have no money. These are traps, money traps, and they bite people in the butt all the time. Understand when something is too good to be true and avoid it.

A Blueprint to Financial Success – Budget Boss

 

Say No

Warren Buffett once said, “Successful people all have one thing in common, they say no to almost everything.” Pretty negative eh? Well, it’s true. You have to be aggressive with your future and with your bankroll. Being aggressive means making wise choices and protecting it. Things like friends guilting you, the family needing money, sales at stores and get rich quick schemes can ruin you. Saying no doesn’t mean you are a bad person or even that you are selfish. All it means is that you are focused on what’s important. Remember a broke person can’t help anyone so you are better off making yourself financially fit so you can then give comfortably to others. Giving too much that you cannot afford just puts an extra person in the bread line.

 

Adjust Your Attitude

There is one common theory many broke people prescribe to. I hear things like, “Money can’t make you happy,” or “Money is the root of all evil,” or even “It’s just money.” That’s broke talk. Money is important, very important, and we must start treating it that way. My main man Dave Ramsey says that we must live with Intentionality. What that means is that we have to purposefully choose what we do with our money. You choose to live within your means and you choose not to get into debt. You choose that being in debt sucks so much that you will avoid it at all costs or you choose that you are sick of living paycheck to paycheck. The key is that you choose because if you don’t you will have no choice. We are sadly at the mercy of many things in life that we have no control over. Living paycheck to paycheck is not one of them. Be angry at your situation but be optimistic about finding a way out.

 

I’ve lived paycheck to paycheck before. It’s a terrifying place to be. Not knowing how you will get by for a few weeks, or even worse, what if something happens and you cannot work. Taking the time to get out of this zone is well worth the struggle. There is a whole industry based on people living this way, from payday loans to dollar stores. Do whatever it takes to be ready for the first of the month and I guarantee your life will change.

“Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” – James A. Baldwin
Financial Advisor

How to Regain (or gain) your Money Optimism

Email – joe@budgetboss.ca 

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