How to Manage Your Money When Living Paycheck to Paycheck


Living paycheck to paycheck can be extremely stressful. A single emergency or unexpected cost could potentially throw your life into financial chaos. However, if you manage your money properly, you can reduce the amount of stress you deal with and maybe even eventually stop living paycheck to paycheck. So here are three tips that can help you save money and improve your financial well-being. 

Make a Budget 

Creating a budget is the first and most important step of any money management strategy. In most cases, it’s an absolutely essential step for anyone trying to build up their savings and achieve their financial goals

With a budget, you can see exactly where all of your money is going. It allows you to keep track of every dollar coming in, and every dollar going out. It also ensures that you don’t end up running out of money before your next paycheck—when you prematurely run out of money, you run the risk of missing rent payments, credit card bills, and utilities costs, which can result in late fees that dig you into an even deeper financial hole. 

Creating a budget is fairly simple, but it will require some work upfront. To start, you’ll have to determine what your monthly take-home pay is, which should be pretty easy. But then you’ll need to add up all of your projected expenses in a given month, which can be a little more difficult. 

Be as detailed as you possibly can in your accounting. First, you’ll want to add up all of your necessary expenses. These are the things that you can’t live without, such as housing, utilities, food, transportation, and so on. Then, after you’ve tallied up all of your necessary expenses, you should make an accounting of your non-essential costs, which might include subscription services, meals at restaurants, and other luxury items. If you don’t want to add all these expenses up manually, consider using an online personal finance tool

Doing the math will allow you to see how much you’re making versus how much you’re spending, and adjust your spending to fit your goals. If you’re unhappy with how your money is being spent, you could try to restructure your budget. For example, you might try out the “50/30/20” budget, which has been lauded by many as being a helpful structural tool. According to this budgeting method, you should split up your monthly income in the following way: 

  • 50% goes to necessary expenses
  • 30% goes to non-essential expense
  • 20% goes to savings and investments

This budget has been recommended as a good starting point by many experts, but keep in mind that you can adjust it to meet your needs.

Find Places to Cut Costs

If you’ve been living paycheck to paycheck, then you probably haven’t been able to build up a savings account or emergency fund. It’s never a good idea to go through life without having a safety net to fall back on, which is why you need to begin saving as soon as possible. 

Now that you have a budget which lays out all of your monthly expenses, you should take a good hard look at your needs versus your wants. Find places to trim costs, so that you can devote that money to your savings instead. Here are a few common ways that people are able to save money

  • Cook meals at home instead of going out. 
  • Minimize your rent. Downsize to a cheaper home or find roommates to split housing costs with. 
  • Exercise at home and go for runs around your neighborhood instead of purchasing a gym membership. 
  • Be cost-efficient when treating yourself. Rather than an expensive spa day, relax at home by taking some potent CBD gummies and watching a movie. 

Search for Additional Sources of Income 

If you’re short on money, then it may be worthwhile to seek out a side hustle. If you have a particular skill set, then use it to make yourself some extra money. If you think you can write, then try your hand at freelance writing. If you’re a talented artist, then make an effort to sell your crafts and artwork online or at local farmer’s markets. 

Even if you don’t have a specialized skill set, there’s a whole gig economy out there you can tap into. You could earn some extra money driving for a ride share service, making food deliveries, or walking dogs in your neighborhood. If you get creative in your thinking, there’s a vast amount of money-making opportunities out there. 

It’s important to be patient when restructuring your financial strategy. It takes time to build a savings, it won’t happen overnight. Make a solid plan, stick with it, and trust that good things will come as a result.