Sunday, May 26, 2024

5 Ways to Stop Living Paycheck to Paycheck

by Harrine Freeman
Harrine Freeman Harrine Freeman is a personal finance expert and the author of, "How to Get Out of Debt: Get an "A" Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients. She is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She is a member of the American Association of Daily Money Managers, SPAWN, AAUW, Toastmasters, NAWW and the Women Network. For more information on how to get out of debt or to buy her book please visit She can be reached via email.

Over one million Americans file for personal bankruptcy every year. The average American household has 10 credit cards. People are living above their means. Americans are drowning in debt and the problem is getting worse. Many people are foreclosing on their homes and will be forced to live on the street because they are in so much debt.

Many Americans spend their entire paycheck the same day or within a week of being paid. Americans want to live the dream of having a nice house, nice yard, and a nice car. But, the reality is that most Americans can’t afford that dream, yet they are still trying to live it.

If you are living paycheck-to-paycheck, here are 5 ways to improve your financial situation.

1. Direct deposit.
If you do not have direct deposit through your job, enroll immediately. Cashing checks at a check-cashing store costs on average anywhere from 1 to 5% of the amount of the check. If you do this each payday, this is money that you are losing. Use direct deposit for free, and save yourself some money.

2. Education.
Go back to school to further your education or take training classes to expand your skills at your current job. This will put you in a better position to get a promotion at work or a salary increase. That money can be used to create a savings account, plan for retirement, pay down debts, and pay for necessary expenses.

3. Budget.
If you are in debt, stop using your credit cards and pay for everything with cash. If you do not have enough money to pay for necessary expenses such as food, clothing, shelter, or healthcare, create a budget for yourself to determine your total monthly expenses and your total monthly income. Reevaluate your spending habits, reduce your expenses and various plans or cancel them (cable, phone, cell phone, internet, etc.). Shop at discount stores, outlets, use coupons, carpool, etc. to find extra money, which can be used to pay down debt.

4. Savings.
You should have savings to cover 3 to 6 months worth of bills. The interest rate at banks right now is very low. Try opening a high interest online savings account, at such places as or which earns you, on average, 4 to 5% interest on your money. Then you can develop long-term savings goals such as planning for retirement, college education, homeownership, etc.

5. Seek Help.
Don’t feel like you are alone. Talk to friends, relatives, or neighbors who have gone through similar situations. Go to the library or do research on the internet for various ways to reduce expenses, gain new skills, and shop on a budget. Some great websites are and In addition, many grocery stores teach classes on how to shop on a budget.

Nothing last forever. If you want to stop living paycheck-to-paycheck, you have to change your mindset, take a leap of faith, and focus on your financial goals. You can also watch financial shows on television, or check out books at the library on personal finance, financial empowerment, and various other topics.