Ever feel like it is too many days in the month and not enough money?  Have you ever thought that you just don’t earn enough to cover your bills? Or that every time you try to save, there is always an unexpected expense that you must pay for?

I understand.  I have been there.  I consistently used credit cards to close the gap.  While the cards provided a temporary sigh of relief, it was a short-term fix with long term consequences.  Additionally, using credit cards to close the gap never addressed the real problem – overspending.

Living paycheck to paycheck is stressful and creates anxiety.  It forces you to focus on the ‘now’ rather than prepare for a sustainable future.  However, there is a way out of the cycle.  No, it’s not a magic wand that you can wave around to make it all better, but there are actionable steps you can take to create the breathing room you need to save, invest, and build lasting wealth.

This article will break down 5 steps to exit the paycheck to paycheck cycle.

Are you ready? Let’s Go.

Focus on What You Want, Not What You Don’t Want

Too often, people focus on what they DON’T have, rather than what they DO have.  They focus on the lack and complain about why they don’t have what they need.  It’s time to STOP.

Words are powerful. Truthfully, if you knew how powerful your thoughts are you would interrogate every negative thought. Because:

“What you focus on expands.”

Your thoughts and words give ENERGY.  Proverbs 12:21 states:

Life and death lies in the power of your tongue.

If this is true, why would you want lack and scarcity to increase? Why would you want more of it?  Changing your mindset doesn’t cost any physical money, but not changing your mindset, could cost you EVERYTHING.

Choose to speak life and abundance.

Be careful with your words. Stop saying you are broke, you don’t earn enough, I can’t save because if it isn’t one thing, it’s another or any other disempowering phrase.  Instead, say I will make enough to get out of this situation or I am using my money wisely and responsibly.  Say, my blessings are coming. Speak expectancy and believe that it will come to pass.  No, you might not know how it’s going to happen, but there is power in belief and expectancy.

You CAN get out of this cycle, but it starts with changing your mindset.

Related article: Join the FREE 5-Day STAY WOKE Money Challenge to gain clarity, confidence, and control over your money.

Analyze Your Spending

Does a hole burn in your pocket every time you get paid? Do you spend your money before you even get it? Do you often wonder, where did my money go so fast?

If you answered yes to any of these questions, it’s time to do a spending audit.  You need to review everything you purchased for the last few months.  You can review your bank statements, credit card statements or receipts.  What did you spend your money on?

Did you truly value what you purchased or was it on sale and it was ‘too good’ to pass up? If you are purchasing because it is on sale, you are falling victim to advertisements. The entire purpose of the ad is for you to exchange your hard earned money now for something that will likely be on sale many times again.

Well, Stephanie, I was going to buy it anyway so I couldn’t pass up the sale.  Did you budget for it this month? If not, what are you going to adjust to stay within budget?  There must be a tradeoff, not an accumulation of more debt.

Besides it being on sale, do you truly value what you are purchasing or do you kind of like it? If you just kind of like it, then wait until you find something you love.  Hold onto your money until then.

When doing your spending audit, mark what items you valued or what was an impulse purchase.  If there were impulse purchases, avoid the temptation next month.  If that means avoiding the mall, do it.  If it means unsubscribing from emails, do it.  Remove the trigger for your spend.

If you paid for most items in cash and don’t have statements to complete the spending audit,  write down what you spend your money on for a month and then evaluate if it was a value or impulse purchase.

Be Good Stewards of What You Do Have

“Sometimes you make enough, you just need more discipline.”

How are you managing the money that you currently earn?  Are you intentional with your spending or careless with it?

If you treat your money like it isn’t important, it won’t be and it will continue to escape you.  Being good stewards of your money means that you actively manage your expenses and allocate money accordingly.  You pay your bills on time to avoid late fees and stay within your means.

If you prioritize entertainment over savings or getting your hair and nails done weekly over paying your bills, then you value staying in the paycheck to paycheck cycle.  Be honest with yourself and acknowledge if your behavior is holding you back.  If you answered yes, ask yourself why.  Do not allow the ‘treat yo’ self’ mentality to cause you to struggle indefinitely.

It’s not worth it and you deserve better.

Wealth creation is like a game.  To move to the next level, you must pass the level that you are on.  If you are repeating the same level over and over, that means you haven’t done anything to change it.  Prove that you are ready to move to the next level, by being responsible for what you currently have.

Level Up Your Skills

College may not be for everyone, but education is.  That means you need to develop skills and have some level of expertise to serve others. That’s the name of the game.  SERVICE.  The more people you help, the more money you will earn.  Simple, right?

If you are only focused on helping yourself and just getting by, that is exactly what you will get.

People use the ‘not everyone is college material’ excuse way too much.  I get it and I agree that everyone does not have to go to college, but to be successful (and keep your money) you need to be educated.  A college degree is not the only way to be educated.  You can go to the public library and check out a free book to learn how to market, code, or learn a new language.  You can watch YouTube to learn how to sew, fix a car, or learn how to paint to name a few. These are free options, open to everyone.  Evaluate how you are using your time.

Are you learning and growing or watching others make money?

Please stop with the college isn’t for everyone excuse.  Focus on developing a skill that will allow you to help more people.

If you prefer a more structured approach and you believe college will increase your earning potential, I have a great HBCU I can recommend.

In all seriousness, learn about the industry that you want to pursue and find a way to earn the degree the CHEAPEST way possible.  There are great technical and community colleges that offer cost-effective ways to help you earn a degree.  If you attend a community college for the first 2 years, you are likely guaranteed admission to a four-year school in that state.

Research scholarships through schools, churches, professional organizations, and non-profit organizations.

Bottom line – When you learn more, you earn more.

Monetize Your Skills to Increase Income

Most finance professionals will have you focus on reducing your expenses only.  Let’s face it,  there is only so much that you can cut back.  After you have analyzed your spending and reduced as much as you can, you must increase your income.  Those are the only 2 ways to get out of the paycheck cycle.

Decrease Your Expenses OR Increase Your Income

That’s it! It’s not a magic pill.  I recommend doing both to accelerate your exit plan.  While there is value in focusing on your expenses, the problem is that there is a limit.  If you are still living, you will have expenses.  Even if you pay off your house or your car, you will still pay taxes, maintenance, and insurance.  You will still need to purchase food.

On the flip side, your earning potential is limitless.  The amount of money you earn is only limited by how much you BELIEVE you can earn.

Now that you have this new skill that you developed, who can you serve that will pay you for it?  Can you turn what you learned into a mini-course that breaks it down for newbies? Can you perform the service for the person who doesn’t have the time to learn? There are people who need what you have to offer and social media makes it easier to find them.  Do you know how to use social media very well? Become a social media manager.  Many small businesses and organizations need your expertise.

Another reason you should focus on increasing your income is due to inflation.  Even if you stayed at your current income, your income is worth less. Why? Because of inflation. Inflation increases the cost of goods and services over time.  As a result, your earning potential decreases as inflation rises.

Always be looking for ways to increase your income.

Final Thoughts

Living paycheck to paycheck is hard.  In order to get out of the cycle, you have to change.   I understand that it is easier said than done, but that is the secret sauce. Change is necessary.  Albert Einstien said the definition of insanity is doing the same thing and expecting a different result.  It’s time to try another route because your current activities got you to where you are now.

What are you planning to do differently to get out of this cycle?

Put these steps into action and get ready for the next level of wealth creation.  If you are really fired up, join the Free 5 day Money Challenge to get clarity, confidence, and CONTROL of your money once and for all.

Are you ready?

That’s getting your Finances on Point.