How to Stop Living Paycheck to Paycheck

Michelle Jackson

If you’re struggling to stretch your income, you’re not alone. According to a 2017 CareerBuilder survey, 78 percent of U.S. workers live paycheck to paycheck at least sometimes. Nearly three in four respondents were in debt (hello, student loans, is that you?), and only 1 in 4 saved money every month.

Even if you’re making decent money (and especially if you’re not), breaking out of that cycle isn’t easy. The internet is full of promises and easy ways to pay off all your debt, save thousands a month, and stick to a budget without stress crying, but increasing savings isn’t that simple. Stuff happens, life gets in the way, and before you realize it, your paycheck is gone—again.

But with time and energy (and spending cutbacks), you too can build a nest egg. To help you get there, we talked with four real people who didn’t start off as personal finance experts. On the road to financial solvency, all of them encountered a ton of challenges and learned lessons the hard way—but they made it, and so can you.

Jessica Garbarino, senior account manager in Charlotte, South Carolina

What was your wake-up call? January 2010. Watching my Cuban grandmother balance her checkbook and thinking of all the sacrifices she and my grandfather made coming to the U.S., I knew I owed it to them—and to me—to take better control of my finances.

What was keeping you living paycheck to paycheck? Trying to keep up with everyone else’s status level and using debt to do that. When I started budgeting on my debt-free journey, I was paying over $1K per month in debt payments.

How did you change that? Created a monthly budget that I actually followed. Then I used the debt snowball method to aggressively pay down my debt. [The debt snowball method employs paying off debts from smallest to largest.]

What’s your advice for others trying to do the same? Don’t base your spending on what you think everyone around you values. Figure out what’s important to you and what your values are to create your financial goals. It makes the money management process so much easier.

Gina Zakaria, who manages a family of four on $150,000 in Los Angeles

What was your wake-up call? Watching so many of my friends and family enjoying life and realizing I never had enough money to do the same. I wanted to buy a house and felt like it would never happen with my current spending habits.

What was keeping you living paycheck to paycheck? Big things like getting a car loan every few years and never saving any money. But also, seemingly small moves like buying things I didn’t need and eating out way too much.

How did you change that? I set up a budget with my husband, we wrote down our goals, and I started adopting frugal tweaks to my lifestyle to save money.

What’s your advice for others trying to do the same? Start with a realistic budget and pair that with your life goals. Your budget should be a priority checklist of what you value in life. Pay off the debt as fast as you can and start saving for the things that matter so you don’t enter into debt again.

Logan Allec, entrepreneur in Santa Clarita, California

What was your wake-up call? One day, I thought about what my life would look like 5, 10, 15 years down the line—and I had a minor panic attack! That wasn’t the future I wanted.

What was keeping you living paycheck to paycheck? When I graduated college, I had over $35,000 in student loans, no car, no investments, and no savings. And all of my money was going toward rent and student loans with little left over to prepare for the future.

How did you change that? I significantly restricted my spending, rarely if ever going out for entertainment or dining. For breakfast every morning, I had plain oatmeal purchased in bulk. For lunch, I would eat the free snacks in the office. For dinner, I would eat microwaved spinach and frozen chicken breast.

Once, some people actually invited me to go eat with them at a Vietnamese restaurant. Not wanting to appear rude, I accepted their invitation—but brought my own raw meat to cook in a bowl of hot water that I asked the waiter for! I kind of feel ashamed about this now: How cheap was I that I couldn’t bring myself to buy a $6 bowl of pho at a hole-in-the-wall Vietnamese restaurant? But this just goes to show where my mentality was during that time of my life.

What’s your advice for others trying to do the same? Not everybody has the life circumstances to be as extreme. I mean, I was a 21-year-old single guy with no children or real responsibilities other than taking care of myself and my own situation. My parents were relatively young 40-somethings and in good health, so I didn’t have to care for them, and I myself was healthy enough to work long hours with little rest. I also had a job that could provide me with almost unlimited overtime opportunities. Not everybody is this lucky.

Athena Lent, program manager for a nonprofit in Phoenix, AZ

 What was your wake-up call? In my mid-20s, I wanted to leave a toxic relationship, and I realized there was no way I could keep living on my own only bringing home $900 a month.

What was keeping you living paycheck to paycheck? My mom died when I was 15 and I ended up homeless in high school. Instead of realizing how resilient I was, I was stuck feeling like a victim to my circumstances. I didn’t want to deal with my issues, so instead, I became a shopaholic.

How did you change that? I had to be honest with myself about my own issues. For me, that meant getting therapy and really doing what I needed to do to feel better. From there, I really started to focus on making more income.

What’s your advice for others trying to do the same? Be honest with yourself, no matter how much it hurts. Don’t be afraid to ask for help to change your mindset or situation. It may be uncomfortable, and it will be hard. Don’t give up.