I remember the feeling of feeling so helpless and confused when we would yet again overdraft in our account or reach that dreaded $0 in the bank. It felt so defeating. Every single month I would try so hard to do better, but it was like I didn’t know-how. Sometimes I felt confident that I was keeping my family on track with our budget and then I would check our account balance to find that we had no money left. I had kind of learned how to budget and did my best to always pay our bills but it seemed like after that the money just fell into a bottomless void of despair. The worst part of is all is that when we feel stuck in cycles like this, we want out but we don’t even know where to begin to get out. So, if you can relate to this at all, I’m here to give you all my best tidbits to help you break the paycheck to paycheck cycle so you stop running out of money every month!
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Communicate about money
If you are living life with another person, it is so important to have an open line of communication about your finances. For so many years the only conversations my husband, Tom and I had about money looked a little something like this:
“Ugh! All of our money is gone again! I don’t know where it went!”
“Don’t worry, I pulled some money out of savings.”
“Don’t buy anything for the next few days. We have no money.”
I didn’t like having to tell Tom these things because I knew us being broke again would just stress him out. Having grown up hearing that money was the biggest cause of divorce, I just figured it was better if I tried to handle it all on my own rather than getting in fights about it.
What I have since realized is that money troubles only grow when kept in the dark…kind of like mold on a loaf of bread.
If you have a spouse, start communicating in a healthy way. Try to avoid talking about money like it is an inevitable problem. Avoid words like, broke and poor.
Trust me, I know how scary it can be talking to a spouse about money, especially when the situation is grim, but two heads are better than one and when you can open up the lines of communication you are more likely to find a way out.
Find a teacher
A lot of us are not given the opportunity to experience smart finances at a young age. If our parents struggled, we’ll struggle…or maybe our parents were great with money but left us to figure it out for ourselves thinking that we would benefit from having to learn the hard way.
At our lowest point, I wasn’t sure where to turn. My parents had never been all that great with money and I began to see more and more that even the people who I thought were doing well financially didn’t actually have that much knowledge on the subject.
This is why we started with Financial Peace University taught by Dave Ramsey. I just needed a plan, a starting point…something that would help me get in the direction I wanted to go and his program was it. However, feeling the need to always be “Gazelle Intense” added a lot of anxiety to my life and I would even argue that it set me back further in my mindset with money.
I’m forever thankful for the lessons I learned through Financial Peace, however, I am so thankful that I continued to seek out more teachers. In doing so was able to find a peaceful balance between money management and my mental health and now work to help others learn how to create this balance as well.
My financial resources:
- Fun Sized Budget Bundle – My own personal budget bundle with a guide to show you how to better track your spending, saving, and budgeting.
- Automatic Budget – Get my actual 5 step system for paying your bills, building savings, and making a little extra cash every month!
- How to Outsmart Your Money – This one-hour training will give you strategies to grow your bank account, stop living paycheck to paycheck and help you understand the mindset shifts that need to take place to create lasting change.
Understand your cost of living
One of the biggest reasons people struggle with living paycheck to paycheck is because they are living above their means. (I know we did!) What this means, is that we can very easily get caught up living a lifestyle that is larger than our paychecks.
A popular rule used to be the 50-20-30 rule, which meant you used 50% of your income for necessities (housing, bills, food, transportation), 20% for savings, and 30% for everything else. However, I like how this article discusses a simpler way of doing it: the 80-20 method.
The 80-20 method
In order to simplify the entire process (AKA to keep percentages out of it) just make sure that you are saving 20% of your income every month and then using the rest to pay bills and then spend however you want!
When you learn to automatically start saving part of your income, there is almost instantly a lot less guilt and stress about the money you are spending now!
That means, if right now you are not already or not able to start saving 20% of your income, you may want to look into ways to reduce your consistent monthly bills.
More posts on saving money every month:
- 22 Things You Can Negotiate to Save Money
- How Our Family of 5 Spends $100 on Groceries Per Week
- 5 Ways to Simplify Paying Your Bills
Getting out of debt
One of the best ways to increase your monthly bank account is to decrease the amount of money you put toward debt every month.
Take a quick minute to add up how much you spend paying just your minimum monthly payments toward debt and imagine what financial shifts you could make if you were able to get that money back in your pocket month after month.
When it comes to paying off debt, there are several methods that will help you accomplish this. Our family personally chose to use the Debt Snowball Method.
You’re living The Drive Thru Life
Another common problem that we all tend to fall into is “Drive-Thru Living.” This is a concept I teach to my students in Unstoppable Purpose that I think we can all relate to.
The example that I always use for The Drive-Thru Life is this:
Imagine you are craving a burger from your favorite restaurant. It’s a really nice place that makes an amazing aioli sauce that you love and the cheese on their burgers always melts perfectly. They toast their buns in a way that makes the bottoms a little crispy but the top is still super soft and delicious. The patty is perfect and the waffle fries on the side are to die for!
This is the burger that you want!
But no one can go with you right now.
It takes about 20 minutes to get there.
This burger combo costs like $20 bucks.
You’re hungry right now.
So instead, you hop in your car, and go through the local drive-thru. It’s closer to home, it’s way cheaper and you get to eat right away instead of waiting.
But… you’re still not satisfied.
Yeah, you ate a burger, but you didn’t eat the burger that you wanted. You didn’t get the bun, the sauce, or the fries. So ultimately you feel unsatisfied and spend $7 to feel full and unhappy when you could have spent $20 for an amazing eating experience that would have left you insanely satisfied
This is an example of using food, but how often do we do this with other things?
Have you ever had someone ask you to join them on an amazing trip? Something you have been wanting to do forever…but you can’t go because you’re totally broke. You spend $100 on new clothes, $80 on Starbucks, $200 on booze, and another $100 on miscellaneous random crap from Target. How stores trick you into spending more.
Moments like this usually happen because we don’t pre-decide the bad-ass ways we want to use our money. Instead we just randomly give in to little impulse buys.
I’m not saying there is anything wrong with Starbucks, new clothes, or Target. It’s just that it’s not the “burger” that you’re craving.
Plan to live a kick-ass life
If you are feeling called out right now and are starting to realize that maybe you are living The Drive-Thru Life just a teeny tiny bit, then hear me out for a second…
Why not start planning for a kick-ass, gourmet burger-filled life?
In my Automatic Budget email series, I will walk you through how to start automating savings for FUN STUFF and how to make sure you always have spending money on hand!
If you want the short version, here it is:
- Open a savings account separate from your checking account and automate deposits every month. Use this as emergency savings. Click here to open a Savings Builder.
- To save for fun stuff like vacations remodels or large purchases open another separate savings account and automate fun savings. We use CapitalOne360. You can plan for these savings like you would Sinking Funds.
- Designate a “fun spending” amount every month and transfer this amount to a Cash App debit card.
Instead of just leaving your spending up to chance, you can intentionally start planning how much you want to spend and where and what you want to spend it on!
Sneak in extra cash
Sometimes, no matter what we do or how savvy we get with money, we still go through those times in life where we need extra cash. If that’s the case, there are so many ways to start making money on the side and I am all about trying to make money doing things you already do or have access to so there is little start-up costs.
Here are some things I have done personally:
- Dog sat/walked
- Watched friend’s kids for less than daycare costs
- Started a photography business (already had a camera my mom gave me)
- Worked 2 hours in the morning at a local school (before the kids even woke up)
Another quick start, affordable side hustles:
- Sell used books
- Start writing
- Grocery delivery
- Photography with your phone
- Pinterest Virtual Assistant
- Dog sitter
Remember, always have a financial plan for all of your money — this includes extra income. A lot of people work side hustles and never end up using the money to make changes toward their financial situation. Personally, I have done this so many times to count. It’s so tempting to head to the store and splurge a little after working so much, but remember, the fastest way out of the cycle is to intentionally get out!
Trick your brain
There are also sneaky little ways that you can begin to trick your brain into building your abundance mindset. Here are some of my favorite ways to do this:
- Begin giving away $5 every week/day. This could mean buying someone a cup of coffee.
- Take out your “Fun Money” in a crisp $100 bill. The majority of people are more likely to be wiser on how they spend this and feel wealthier carrying it around.
- Take pictures of what you want to buy. I know this sounds bananas, but I swear this is a method I use all the time. If I really want to buy something (especially if I want to gift it to someone else) taking a picture helps me get that instant gratification without spending a dime. Then, if I want to show the person who it made me think of, I can show them.
These are just a few of my personal favorite ideas on how to increase your abundance mindset that is simple and easy to apply.
A lot of times in the pursuit of more money people look for quick wins or financial strategies and while both of these things exist and can benefit you, I truly believe you first must conquer your mind in order to see lasting growth. Have you applied any mind tricks that have helped you improve your spending?