Are You Living Paycheck to Paycheck?

Filed in Budgeting, Money, Spending by on January 14, 2013 81 Comments

When things get rough...Well, here’s your official invitation to join the “Broke-Ass Mo’Fo’s club.”

‘Cause we are.

(And if you’re not living paycheck-to-paycheck, pray tell what in the hell you’re doing so we can do it, too.)

I bet half, if not more, of all the people you know are secretly living paycheck-to-paycheck.

I mean, it’s not something that most people want to shout from the roof tops. *I* just tend to be so open because I am a blabber mouth a blogger and TELLING is what I do, in hopes of opening the lines of communication.

People are so secretive about their money: how much they make, how much they owe, how much they’re saving (or NOT saving)–and the list of secrets go on. And it’s those secrets that perpetuate the lies that we tell ourselves about our money and our financial situation.

So let’s have an honest discussion about money, or lack thereof.

Because this living paycheck-to-paycheck cycleΒ sucks. And it’s time to do something about it.

Once Upon a Time…

…we were doing damn good: we had money in the bank (ahhh….security), we had an affordable small 2-bedroom condo, and we had no kids (no daycare costs, which is a freakin’ mortgage!). We also had no car payments because we’d kept our cars after paying them off.

Life was easy.

But somewhere along the way……..we had a baby…….and then another………and we began needing wanting more space……..and we bought a 4-BR single-family home………and then baby #3 popped out (SURPRISE!)…….and…..and…..and….and…..

…..aaaaand you get the point.

My 3 Sons

My 3 beautiful sons!

Life became more complicated, and expensive.

  • Our “new” 1973 single-family home needed tons of repairs and updates:Β  cha-ching!
  • We had 2 kids in daycare at the same time (still do): double cha-ching!!

And now here we are, living paycheck-to-paycheck.

Why People Live Paycheck to Paycheck

If your expenses are greater than your income, you’re in trouble. When you begin shelling out more than what’s pouring in, it’s time to change it.

Some of these expenses, regardless of whether they’re fixed expenses, like mortgage or life insurance, or variable expenses, such as groceries or gas, you can cut back.

You can even make more money.

But even if you make more, and cut back, the heart of the matter is to manage it better.

You’ve got to set a realistic budget.

I’ll be honest with you, I don’t think I’ve ever budgeted my money. Budgets have always made me feel restricted. Sort of like dieting. When you’re on a diet, all you can think about is chocolate cake. Or bottles of wine. And you hate feeling like you can’t just splurge when you want to.

I’ve always paid my fixed expenses, and then just lived off the rest. The problem is that I would use some of that “what’s left over” pot of money for, say, cans of paint to redecorate my house (which is fine), but come the end of the pay period, I’d be struggling to pull together enough money for a small trip to the grocery store for that night’s dinner.

It’s not a problem spending money on things like cans of paint, or whatever hobby or fun “latte factor” you’ve got going on, but when you’re not budgeting for it, you totally throw yourself off, and then you find yourself living paycheck-to-paycheck.

So here is what I am doing to break this cycle:

1. Track my spending to get a realistic idea of what I spend money on. I’ve been tracking forever, but now I’m actually USING the data.

2. Create a “CURRENT” budget using the average of those tracked expenses in all the categories that I spend. I did this last week and was SHOCKED to see that I was in the hole several hundred dollars and was operating at a LOSS.

3. List ways that I can make more money, such as these 20 Ways to Make More Money and Cut Expenses.

4. List ways I can cut expenses.

5. Get off my ass and actually make that extra money and be courageous to cut costs! It’s easier said than done!

6. Create a new budget based my new income and lower expenses.

7. DISCIPLINE myself! Budgets won’t work if I won’t stick with them.


So I want to know, are you living paycheck to paycheck, too?

And if so, when did you first start noticing the squeeze?

And what are you doing to correct this vicious cycle?


NOTE: If this post has resonated with you, and you’d like to add to this discussion, I would love to hear from you! Please consider leaving a comment πŸ™‚ Or find me on Facebook and say “hi!”


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About the Author ()

Serena Appiah is a wife and mom to 3 boys in the Washington, DC metro area who enjoys writing about family, finances, and raising children.

Comments (81)

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  1. This is all good advice, thanks for sharing.

  2. I’m not doing as bad as I have in the past. I WISH I would have budgeted when I was younger. Then maybe I’d actually have more in savings now.
    I thought it was normal to live paycheck to paycheck. All the trips to fast food, buying the kids a new toy every time we’re at the store, etc. were causing us to quickly run out of funds in the bank account before the next payday.
    One thing I’ve done is stop being so impulsive. Need over want. I also shop sales, use coupons, and I do stick to my budget.
    There are a bunch of small changes I’ve made to our spending that have really helped us, and those are just a few. By no means am I just rolling around in all my money (I wish), but I’m certainly doing better than we have in the past.

    • Serena says:

      Loreina, that’s what I thought, too–that it was normal to live paycheck to paycheck. That’s all I saw growing up, and what I have ingrained in my mind. But after doing “okay” back before we have this house and 3 kids, and seeing how less stressed we were when we weren’t strapped, I see now that living P2P is really not what’s supposed to be happening! And yes, I agree, curbing those impulses helps sooo much!

  3. Holly W says:

    I really like this post. I used to live paycheck to paycheck until about 2 years ago when we started following the Dave Ramsey program. I had never been on a budget, and I like you hated the idea of them. But without one, we were going nowhere. Now 2 years later, we have paid off all credit card debt, our cars are all paid for, we don’t own a home so there’s no mortgage, and we have paid off all our student loans. We use a cash envelope system where each and ever dollar we make is accounted for and basically spent before we even get it. We never worry about having enough because we have already planned that we have (for example) $100 for restaurant money for the month… if we run out and spend it all during the first 2 weeks, welp, i guess we’re just out of luck for the rest of the month and can’t go out to eat.
    Dave Ramsey has saved our lives financially.

    • Serena says:

      Hey, Holly! Dave Ramsey is pretty kick-ass. I read his book earlier in the year, and I have to say, he’s soooo motivational. I love that his advice goes against what a lot of financial gurus preach: pay off low balances FIRST, then hit the bigger ones with the snowball method. And, savings $1,000 quick. I think you’ve just reminded me that we should try his method. And that ROCKS that you guys are debt free!! It must feel so liberating!!!

  4. Liz Colon says:

    We currently live paycheck to paycheck . . . HA! Waiting for it to come tomorrow just to be spent totally on my baby shower! There are several problems with what we bring home . . . 1. The last job I had paid $10,000 more than this one, but I got laid off and this one is at a University and pays for my tuition for my MS degree which I will finish in May! 2. I also pay about $11,000 a year on health insurance for my family . . . I could go with the cheaper insurance, but then my doctors would have to change and my co-pay will leap from $20 to $50 and with 1 kid that has to see the doctor every 3 months, and another who is in the filthy contaminated world of first grade and a baby on the way . . . that’s not happening. 3. I have to pay additional payroll taxes on my tuition – which works out to be about 30% of the total tuition cost, and at $1100 a credit . . . that’s a lot! 4. I also pay into my pension so 3% of my check goes to that . . . that is the lowest you can contribute with 100% matching! 5. When I do save it’s usually for vacation, cause without vacation I would totally loose it! On the hubby side, he also recently took a paycut to pursue his career in cooking and will start school in a couple of months. Also his hours where he works just got cut some, and he really can’t take on much more because once he starts school his life will be school and work with a little family time in between. So I don’t really know what a budget is going to do for us right now at this moment! Once I graduate I’ll start looking for a job that pays more and is geared toward my degree. If I stay working in higher education then my kids will get to go to college for free, which in the end may equal all this money I am shelling out . . . ugh!!! That’s my story anyway!

    • Serena says:

      Liz, the fact that you’ll probably get free tuition sort of makes up for any loss income you currently have with being a student and what-not, so you’re making out GOOD! All those factors you mentioned, I can see what it’s hard to budget.I feel the same way–like, if there’s not much left, how can I budget something that’s not even enough for all my categories of spending?

  5. We’re not doing *terrible.* We’re still in debt (and really, who isn’t?), but we’re able to save a bit every check. My problem is when I get depressed or bored, I want to shop.

    • Serena says:

      Oooh, yes, the depression or boredom shopping! I hear ya! I get excited when I think about heading to Home Goods or to a thrift store. LOL. But that’s good that you’re saving a little each check. I just set up an automated withdraw to take $25 out of each check. It’s measly, but it’s a start!

  6. Sofia says:

    We’ve been there and we are still working on squeezing our selves out of it! We felt the crunch when my husband left his job as a Credit Union Loan Director. He decided to finally open his own web design and digital marketing company (one thing he has always wanted to do). Some months have been better than other. I started using coupons, buying store brands and only things we actually needed. There was no more going out for dinner or movies. Netflix, Blockbuster, etc all had to go. Thankfully his company is staring to get some major clients and things are starting to look up! So we are starting to be able to breathe.

    PS: looking forward to your post tomorrow! πŸ˜€

    • Serena says:

      Hey, Sophia! Thanks for your thoughtful comment πŸ™‚ I’m envious of the way your husband was able to leave corporate America and start his own business. That takes a lot of heart, and confidence. Did you guys have emergency savings set up before-hand to make sure you could whether the storm of the ups and downs of owning a business? That’s inspiring!

  7. Kelly R says:

    I have made a budget and try to limit out spending.

  8. Nancy says:

    I can’t wait to read the next posts, where you list ways to make money and ways to cut expenses!

  9. Sharon Hook says:

    I had a ton of credit card debt once upon a time. I used the Dave Ramsey method of small balance first and mentally it was much more rewarding to see those bills go away and feel like I was getting somewhere. Today I have no revolving debt. We have two cars with payments but 1 has five payments leftand one has 11 payments left. My mortgage is affordable BECAUSE of what I learned with that overwhelming debt. Stayed within my affordable limits, NOT what the bank said I could afford. Tracking is key, if you don’t know how much you spend, how can you possible decide how much you can afford on your salary? If you don’t know where the money is leaking from, you can’t plug the leak.

    • Serena says:

      Wow, so you’re almost debt free (minus your mortgage!). That’s awesome! We had to get a new van back in June ’12 and ended up going “NEW” because all the used ones were the same price as new! Plus, we’re like you–pay it off and keep it. But still, that car payment added extra costs….And yeah, the banks are full of it. They always qualify you so much higher, and of COURSE you end up in “house creep” where the prices keep getting higher…and higher….
      Thanks for your comment, Sharon!

  10. Beth says:

    We don’t live paycheck to paycheck, but almost all of my neighbors do. The biggest difference is that we pay off debt as quickly as possible and live within our means. If there’s something we want to buy, we wait until we save enough for it and then pay cash for it. It’s not always fun, but it’s worth it to be debt-free.

    • Serena says:

      Hey, Beth,
      You’ve hit the nail on the head–saving until you have enough. That takes sooooo long, and we’re a society that wants it RIGHT.NOW.IMMEDIATELY. Especially if it’s on sale! And we just can’t do that anymore. You’re an inspiration! πŸ™‚ Thanks for commenting!

  11. Tonya says:

    MY name is Tonya and YES YES YES, I have been guilty of living paycheck to paycheck. We’re talking stalking my account bank account starting at 12:01am waiting to see balance change. I usually spend all that I have or at least until theres only about $50 left in my account before the pay period. I’m so tired of scheduling things around my paychecks. But I’m retraining myself. I’ve recently received a raise at work and I’ve been putting that money into savings and forcing myself to live within my means off my previous salary.

    I look forward to reading your 20 ways to make your money stretch post and your boys are beautiful πŸ™‚

    • Serena says:

      I’m right there with you, Tonya! It sounds like, though, you’re learning your lesson, too, and you’re deciding that if you want to make some growth (e.g. savings), then you’ve got to make some changes. Way to go on saving your raise!!! Thanks for your comment!

  12. It’s terrible in this economy that people can’t feel secure with the job they have anymore. I know we cut spending way back, as surprise bills here and there have caused strain. Great post to help others!

  13. Chris Deals says:

    Yep, living paycheck to paycheck is an epidemic. One of the things I have done in my life is ask myself before I spend…is this a want or a need. This has work for me along with budgeting and building a side income. I have traded most of my television watching time to actively working on my side business which supplement my income.

  14. Kara Szczepanski says:

    Well good morning, yes unfortunatly I am a 52 yr. Old woman who started work when I was 14 moved out on my own when I was 16 & have worked my ass off up until a few years ago when bad health took over my life & am forced to live on $1043.00 monthly. That’s way worse than pay check to pay would think from working for 32 years being a hairstylist & before graduating from high school in the food industry, that I would have a nest egg set, but no. I was in a bad marriage & left with my suitcase & my handicapped & oxygen dependent son who was eight at the time. So I left it all behind to save my son from a struggled, rough, drawn out divorce.
    I figured I made my fortune once before & I can do it again. Wrong.
    Neutropinia, Cronic Lyme Disease, Fybromyalgia, Arthuritus, Mygrains & many more related difficulties that go along with all diseases & disorders.
    My son lost his battle and passed away from his Neiman Pick Disease @ 14 yrs old, several years back now.
    I have found it very difficult to get out of my own way and stay focused long enough to try to get back to work.
    I too have begun getting back into my art & am hoping I come up with work that not only I can be proud of but also sellable.
    I am tired of not owning anything. Tired of turning down invitations to lunch or vacations.
    Just once I would love to be able to not only have a small (or Large) savings account. Maybe even someday go on a vacation with “The Girls”, a tradition they have all been doing for over 10 yrs. Now.
    I have got to do something, I want to do something, I have a hard time paying my rent every month & never have
    a savings.
    Just one more time in my life I would, I need to be financially stable once again.

    • Serena says:

      Oh, I’m so sorry, Kara! It sounds like things are BEYOND tough for you! I’m glad that you posted here, because you’re one of millions going through hard times, and maybe we can all offer support, or, at the very least, an ear, right? I know it’s not a great thought, but it is possible that you could find a roommate or stay with someone until you get up on your feet again? What kind of art do you do?
      I just wrote a post about “20 Ways to Make Money and Cut Expenses.” Did you happen to see that? There might be a few good suggestions in there, including one that my friend offered, which was mystery shopping. Anything to bring in some extra money!
      I’m sooo sorry to hear about your son πŸ™ Devastating! I’ve got 3 boys myself (ages 6, 3, and 1), so I can imagine how difficult that must be πŸ™
      Please feel free to post here and share and hopefully there will be something we can all do to help! πŸ™‚
      Keep in touch, okay?

  15. I am working on getting out of the paycheck to paycheck mindset… Great Post!

  16. Alix says:

    I currently am living p2p because of a divorce, and getting a bigger place for me and my son. I can afford my bills if I stop shopping and start saving. I to have money going into savings from every check and also I have started the 52 week ghetto savings plan where you save the amount of whatever week of the year your in. Example; its week 1 you save a dollar this week next week 2 dollars and so on until u get to the 52 week of the year, it turns out to be over 1200 dollars and most people can do it look it up!! XX ALIX

    • Serena says:

      Alix, that is a great saving strategy! I think I saw that on FB. I would LOVE to do something like that. I might have to run some numbers for myself and see if I can do that!

  17. Tony R says:

    I listen to Dave Ramsey daily on the radio but there is nothing he can offer me or my family that would work. I am 52 and only make around $55,000 a year as a computer technician at a large hospital. I take home $3000/mo. My wife and I had a baby in2008 and another in 2010. I had to sell our house as a short sale after my 2nd was born because my wife stopped working as a teacher to raise the baby. We have no one to watch them and do not trust anyone with our children. We moved to a house and rent it for $2200/ mo. As far as I am concerned, I am saving $800/mo from leaving our mortgage behind. Anyway, we are sinking. My entire income is gone each month. $2200 rent, $400 for gas, $40 cell phone and food. That’s it. I am wiped out. My wife works part time after I get home from work while I watch the kids. She makes $1400 a month. Her money is a wash because she pays her student loan, cable, electric and oil heat. As far as Dave Ramsey goes, I am debt free and so is my wife aside from her $250 student loan. Dave would say we have a financial crises and he is correct. No one is going to hire a 52 yr old computer tech so I am stuck at my job. I cannot work another job because I watch the kids most of the week nights and Sat and Sunday. Plus, there are no jobs here. We are not moving. My son just started Kindergarten and my daughter is getting free pre school. My point is that we are stuck in financial hell and we are debt free. We do no have one cent for savings, retirement, college funds, etc. we are scraping by and are stuck in this terrible life while making a combined income of $80,000. I blame myself. I am the loser that is unable to provide for my family. I don’t blame anyone else and I do not want anything from anyone. No obama dependencies or EBT cards. I will not lower myself to do that. Every decision I ever made brought us to where we are. It’s hard to love with that but that is what it is. Dave Ramsey could not help us with any advice. It’s easy to talk when you are a millionaire. When you are scraping by and have family obligations, there is not much that can be done. And thanks to the furlough for NY state workers, I lose 9 days pay this year. That’s it. I will shut up now.

    • k-n says:

      you’re being self-defeating. only you can make a change. the more you say “can’t”, the more you “won’t”. can’t move? why not? you won’t move. something inside you wants to play the victim.

      i’m not trying to insult you, i just want to shake you.

    • Mike says:

      Get a smaller house. I live in an AWESOME condo fit for 1300 right outside of Chicago.

      Move closer to work. Bike everywhere.

      Carpool. Do all your shopping together.

      Switch your phone bill to republic wireless.

      Keep your beat at 68 and your air at 76. Only use it when you need it.

      Rewear clothes 2-3x then wash. Unless you work out in them.

      Switch your phone bill to republic wireless and your insurance to GEICO.

      Cancel cable.

      NEVER eat out.

      Many people might look at this and say it’s better to be in a crappy financial situation. Here’s what I think:

      1. More happiness because of less clutter in your life and in your brain.

      2. This means more engagement and relationship building with your family and friends

      3. More time with them. Netflix movie night and burgers and fries or making homemade pizza with your family costs a couple bucks and is AWESOME.

      Good luck!

      • Serena says:

        Hey Mike! Great suggestions! We canceled cable a year ago and have saved nearly $1,000 this year. Moving closer to work isn’t really feasible, in my opinion, if you work in the city. I work in Bethesda, MD, and the closer you get in to Bethesda, the more expensive it is. Oh, and May 16 is Bike To Work Day! Even though it’s a heck of a trip, I’m going to try it!! πŸ™‚ May have to try it once per week, if all goes well :). Oh, and I TOTALLY agree with less clutter equaling more happiness!!

  18. Kate says:

    Even if people save up for an item they want they have to wait for each paycheck to save. This is called living paycheck to paycheck, it never goes away even when you’re debt free.
    Unless you have your own printing press to create the legal currency you’re living paycheck to paycheck.

    • Serena says:

      That’s an excellent point, Kate! So when you can’t buy something outright, consider yourself still living paycheck to paycheck. Way to change our thinking!! πŸ™‚ Thanks for adding that!

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