Stop Living Paycheck to Paycheck

According to a Career Builder Survey 47% of people live paycheck to paycheck. 40% also say that they could live comfortably with an extra $500 a month, even though 21% of people making $100,000 or more still spend their entire paycheck before their next pay day.

Many people don't understand, that it's not how much money you make, but what you do with that money. Complaining about not making ends meet is useless, if you are unwilling to change your standard of living. Changing you spending habits is the only way to stop living paycheck to paycheck.

Test Your Standard of Living

Try setting aside 20% of your paycheck next month. Could you survive and still pay all your expenses like rent, car payments, grocery bill, utilities, gas, and credit cards? If not, you are probably living outside of your means. A 20% decrease in pay is not fun for anyone, but you should never require more than 80% of your paycheck for regular living costs. With 20% less income you may have to put you social life on hold, and temporarily eat less expensive food, but you should still be able to pay your bills. If you cannot survive one month with a 20% decrease in pay, you may want to consider reducing your expenses like making a grocery budget, driving a less expensive car, or even considering living in a less expensive home. Most personal finance consultants recommend saving at least 10% of your income. I am a strong believer that having 20% less income, even though unpleasant, should not be detrimental to you survival.

The stress of living day to day is self induced, and has nothing to do with how much you make. Being unemployed is a different story entirely, but as long as you have a job, there are plenty of people in the world that would be happy to earn what you do. If they can be perfectly content, so can you.