If there is one statement that we hear from our readers more than any other, it’s variations of, “I’m tired of living paycheck-to-paycheck.”

This problem is without a doubt the single most common concern that we come across here at CreditRevelation. It was also the subject of an email that we received from one of our visitors:

Dear CreditRevelation,

My name is Robert Divine. I’m 28 years old, and have been living paycheck-to-paycheck for my entire adult life. I don’t have a savings account or money socked away because it all goes toward my monthly bills. Recently there’s been gossip going around at work about potential lay-offs. If I got fired today, I would have enough money to get by for a few weeks at most. I’m not gonna lie, the thought of losing my job keeps me awake most nights.

I want to save up money just in case, but my bills take every penny I’ve got, every single month. Isn’t there a better way to live?

Thanks for your help and advice,

Robert

This email hit home with us in more ways than one. Not only have many of us been in the same predicament that Robert is currently in, but we receive a ton of emails just like this one every single day.

We also wanted to address this ominous topic because it is one that nobody likes to think about, until a life-altering event like a medical emergency or a layoff puts a family at risk of losing everything.

So when it comes to living paycheck to paycheck, is there a better way? Of course there is, and it may not be as far out of reach as you think.

Your Budget Overhaul

• Creating a budget. The first thing that anyone in Robert’s situation needs to do is to create a household budget. List all of the essential monthly bills and expenses, and then compare them to your monthly income. If your income covers the bills and expenses that you have to pay each month, then you need to focus your efforts on reducing unnecessary monthly expenses like entertainment, fast food and shopping. Never created a budget before? Then check out consumer.gov for a little budgeting 101.


• Diagnosing problem areas. Now that you’ve created your monthly budget, it’s time to do a little detective work and find out where your unnecessary spending is occurring. A good method for finding problem areas is to pull your last three month’s worth of bank statements and go over your spending habits line-by-line. If you find that your fast food addiction is costing you $10 a day ($300 per month) then maybe it’s time to pack a lunch for the foreseeable future.


• Embrace frugality. Individuals in Robert’s position have a tendency to overspend without realizing the implications of their actions – until it’s time to pay the bills. This rings especially true for people that use debit cards for all of their purchases. You don’t feel the dent in your wallet when swiping a card that you do when spending cold-hard cash, so consider packing your wallet full of greenbacks to spend each day. Only carry what’s allowed for your daily budget, so that when you’re out of cash, you’re done spending for the day.

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