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More than half of Americans are living paycheck to paycheck, according to a recent survey from Charles Schwab. That means that millions of individuals and families in the country are bound by payday and would not be able to afford necessities and bills should they experience an emergency or find themselves unemployed. While living paycheck to paycheck can result in an endless cycle of financially-induced stress, there are ways to break the cycle and become more financially stable.


Make and Adhere to a Budget

Perhaps the most important advice for all working adults relates to a strict budget. While many individuals already try to stay within certain financial limits for expenses like groceries and clothing, in order to break the paycheck-to-paycheck cycle, it is important to identify how your money is spent each month as well as seeking reductions in your expenses. Calculate your total monthly income, identify the cost of your necessary expenses, and subtract the latter from the former. When crafting a new budget, you will want to assign each dollar a role and commit to it; roles can include food, transportation, bills, and savings. Sticking to your budget can help you build up a buffer in your account, stay on track, and reduce financial stress.


Get Rid of Debt

Though there is some debt that is beneficial, when living paycheck to paycheck, debt may cause a greater strain on your finances. Planning to pay off existing debt as quickly as possible and refraining from taking on new debt will help eliminate what you owe and gradually improve your credit score as well.


Cut Back on Non-Essentials

Focus on paying for true essentials—shelter, food, utilities, and transportation—before indulging in other expenses. This isn’t to say you can’t enjoy an occasional coffee or good meal, but learning how and when to cut back on non-essential purchases can save you a lot of money over time. Downgrading cable packages, pausing subscription services, and shopping at discount stores are things to consider. Keep in mind that these sacrifices are only temporary as you work to improve your financial situation; once you have a more secure grasp on your finances, you can see where you can afford to splurge a little.


Contribute to an Emergency Fund

Once you have created your budget and cut out what you can from your monthly expenses, you should strongly consider building or growing an emergency fund. Striving to have three to six months of expenses saved up is a productive goal; having this amount in case of emergency will reduce your overall stress because you will know that you have a back-up fund to rely on should you find yourself unemployed or in need of more money that you typically have.


Ending the cycle of living paycheck-to-paycheck is certainly easier said than done. Fortunately, there are numerous online resources to help guide you in evaluating or creating your budget.


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