5 Ways to Avoid Living Paycheck-to-Paycheck

Posted - March 16, 2020

Payday. It’s a more important day for some of us than others. If you’re one of those people who counts down the days until you get paid, you’re not alone. Approximately 78 percent of Americans live paycheck-to-paycheck to make ends meet, according to a survey by CareerBuilder. That’s more than three-quarters of the workforce.

Making more money doesn’t necessarily solve the problem, however. One in 10 who make $100,000 or more live paycheck to paycheck as well, according to the same survey. 

So what’s the solution? There’s no “one size fits all” approach, but there are a few proven methods for getting out of the paycheck-to-paycheck cycle. Here are some ways to manage your budget better so you can avoid this stressful situation.

  • Create a Budget

Many Americans struggle financially because they simply don’t keep track of how much they’re spending. By getting it down on paper (or a computer), you’ll be able to see how much you have to work with and how much you’ve been spending. Creating a budget (and sticking to it) will help you stay more organized and live within your means.

  • Evaluate Your Lifestyle

Speaking of living within your means, does your lifestyle match your finances? This is why many people making more than $100,000 a year live paycheck-to-paycheck. They are spending more money than they are saving in an attempt to keep up appearances, comforts or conveniences. Take a hard look at what you’re eating, wearing, driving or doing and see if it’s worth the stress your financial situation is creating.

  • Take Advantage of Pre-Tax Savings

Would you miss $50 each paycheck? OK, what about $20? By setting aside a certain amount each paycheck (even if it’s small), you’ll be able to start saving money without it having a huge impact on your lifestyle. You might still be living paycheck-to-paycheck, but you’ll be saving money without even knowing it. This also reduces the amount of taxes taken out of each check.

  • Get Help!

Many companies offer financial advisors and there are government assistance programs where a professional can help you get your finances on track. Even if you have to pay for this help, it will be a short-term pain that will result in a long-term gain. Be patient with yourself and don’t be ashamed of turning to others for help.

  • Access Your Pay Early

What if you could avoid counting those days down to payday and had access to some of your earned wages whenever you wanted it? You’d be able to pay off those surprise expenses or avoid late fees, for starters. With Spentra’s Money Earned feature, you can access up to 50 percent of earned net wages at any time. This can give you both peace of mind and financial flexibility to move beyond thinking about the next paycheck.

Spentra can help you avoid living paycheck-to-paycheck. To see how you can get it at your company, contact us today.