Always waiting on you next check to finish meeting your monthly obligations?

Ever experienced more month than money left?

You are probably experiencing the paycheck to paycheck cycle.  The paycheck to paycheck cycle is when your expenses are equal to or more than your income.  Know what? You are not alone.  In a recent survey it was revealed that more than 50% of Americans live paycheck to paycheck. It impacts ALL income levels, reasons may be different but experience is very similar.  At some point in life, most people have experienced or been very close to living the paycheck to paycheck cycle.    I believe in being transparent so here it goes…….  Years and years ago I too was living the paycheck to paycheck cycle.  It was so bad that I would withdraw funds from my account knowing that my check wasn’t going to be deposited for a few days; my spending was outpacing my earning and I was digging myself deeper in debt.  (I know, what was I thinking?!?!?!?!) The reason I was stuck in the cycle?  Well there were several reasons including a lack of money management.  I was on the hamster wheel and was spinning out of control.  It’s not that I didn’t know that I needed to make changes; the fact is I really didn’t want to face it.  To get off of the hamster wheel I was going to need to make some serious changes.  After spinning on the wheel for a while and not getting anywhere, I finally decided to face it and take action to start moving forward.  I was able to eventually break the cycle but it didn’t happen overnight.

Breaking the cycle 

Breaking the cycle was not just as simple as jumping off of the wheel.  It took a lot of reflection, analysis, planning and action.  So here are the steps I took:

1.       Stopped Spending – The first thing I had to do was stop spending, I needed to stop digging myself in deeper until I figured out what was going on.

2.       Reflected– Took time to reflect and see what caused me to get to that point. The reflection included analysis of my finances and spending habits.   What was causing me to have more month than money left?  It wasn’t that I wasn’t making enough; it turned out to be that my spending was outpacing my earning.

3.       Created a plan– I had never really had a budget, my method was to keep track in my head.  Well it’s obvious that that didn’t work out so well.  I created a plan and then a budget to be able to follow that plan through.  Let’s just say having it on paper was a much better option.

4.       Stopped letting my credit cards be an extension of my income– I would always just reach for my credit card with the intent of paying it off but the paying it off part didn’t really ever happen.  What was I buying?  Who knows, it was definitely items that fell into the wants category instead of the needs category.

5.       Stopped counting my bonuses and extra income as part of my regular budget– I would get bonuses and extra money often.  The problem is I developed a lifestyle based on it and eventually the bonuses and extra money stopped but I didn’t scale back my lifestyle.

It’s never really easy to face the hard truth but the fact of the matter is, if you don’t you will never be able to move forward.  I am so glad that I took that initial step of facing it head on so that I could move forward. 

Let me know in the comments if you have broken the paycheck to paycheck cycle and how you jumped off of the hamster wheel.

Still going through the paycheck to paycheck cycle?  Schedule a session so that I can help you get control of your finances.