Most of us have been there at one time or another so don’t feel bad; living on the edge of “being completely broke,” wondering if you’ll have enough money to be able to even buy peanut butter and jelly to get you through to payday Friday….but wait! You may even be allergic to peanut butter….now you’re really in trouble! I guess it’s back to Ramen noodles for dinner. What’s worse is when you have a family to feed; this is no laughing matter.

Don’t despair. It’s a lot more manageable than you think to get away from living paycheck to paycheck if you simply put things in perspective and come up with a short-term and long-term plan.

To put things in perspective, realize that currently, approximately 75% of Americans live paycheck to paycheck at least some of the time throughout the year. This includes even high-salaried professionals! You are definitely not alone.

You know the old joke when you hear somebody occasionally saying, “I’m one paycheck away from being homeless.” Sad, but for an extremely small segment of the population who doesn’t have anywhere or anyone to turn to should things get really bad, this is reality! That’s how serious being in this financial state actually is and you should take it just as seriously.

Lower Your Expenses the Easy Way

It’s time to get your finances in order so you can slowly get out of that financial quicksand that’s likely causing you a great deal of anxiety and stress.

The way to break free from  living paycheck to paycheck is simple. The problem is; far too many people don’t know how simple it is and many don’t even want to try to do it!

Here’s the easiest way to get a stronghold on your finances once again:

1. Add up your bills for the month and subtract them from your take-home salary. If your bills are higher than your salary, you are living beyond your means. Remember to accurately include expenses such as gas, child care, haircuts and pedicures, etc.! Don’t allow unexpected expenses to sabotage the plan you are going to make in step three to get out of this mess. If anything, over-estimate your expenses while you lower your expenses.

2. Try your best to figure out where you can cut the fat from your expenses. Most people who are living paycheck to paycheck start cutting the fat from their credit cards. If you have three to four credit cards that you are making minimum payments on, this is probably holding you back in a big way. Figure out a plan to attack the credit card with the smallest outstanding balance and pay it off, and continue up the ladder until you get to the one with the highest balance. This is contrary to what some experts advise because you are targeting the cards with the smallest balance instead of the ones with the highest. However, by paying off the ones with the smallest amount you will get there quicker and the feeling of accomplishment will drastically help you continue your quest to pay off all the other ones!

Try keeping your major luxuries such as that Comcast cable system with all the sports channels intact if possible (hey, it brings happiness) but  start cutting back a little on expenses such as the morning Starbucks cup of Joe, eating out for lunch while at work, groceries and toiletries; make a sacrifice to live with a little bit less of your favorite products and you will quickly see progress in your living paycheck to paycheck situation. The point is; don’t cramp your style but realize that you will only break out of this rut through a little sacrifice and having the courage to lower your expenses!

3. Make your actual solid plan of attack! In this last step, you are going to separate your bills and expenses into two lists on a sheet of paper and place the take-home salary above each column, then subtract your expenses from your listed salary. You should try your best to even out the bills and expenses along with their corresponding due dates. This takes a lot of trial and error work but rest assured it is worth it!

Regardless of whether you get paid daily, weekly, bi-weekly, or monthly, your first column will include expenses and bills that need to covered by the 1st of the month, and your second column will include expenses and bills to be covered by the 15th of the month.

Work with the numbers a little bit and flip flop the bills and expenses until you see they are covered by your salary in both columns (1st & the 15th of each month).

Stick to the plan you create and get out of this hole within a few short weeks. Then, a year from now, throw yourself an expensive party and get back in the hole again!….Wait, just kidding! You see, that’s human nature, and that’s probably what you will want to do even though it’s this kind of behavior that got you there in the first place.

The biggest benefit of this one year plan is that your spending habits will greatly improve and you will be in complete control of your finances. You will have learned how to stop living paycheck to paycheck and that’s a huge battle you may have just won! Continue enjoying life to the fullest but be sensible.