If you were to miss a paycheck from your employer today, would you still be able to cover your financial obligations? The unfortunate reality is that majority of Pakistani families wouldn’t be able to because they are living paycheck to paycheck. As far fetched as it may sound, many people are one missed paycheck away from potentially being homeless. And this is scary.
However, the good news is that you don’t have to continue living paycheck to paycheck if you've found yourself in this situation. You can break out of the cycle and get on the road to financial freedom. Learning how to stop living paycheck to paycheck isn’t complicated, but it does take work. Here are five steps you can take to break the cycle.
1. Get on a budget
This is one of the most important steps to stop living paycheck to paycheck. The obvious solution to ending the paycheck to paycheck cycle may appear to be making more money...but that's not quite the solution. Although that’s a part of it, it isn’t the first order of business.
Before you can explore ways to make more money, you must first learn how to manage the funds that you currently have. Quite frankly, if you don’t manage what you have now, earning more will only worsen the situation.
2. Reduce your expenses
At the crux of our existence as human beings, we really only need four things to survive. We need food, shelter, clothing, and transportation. Anything beyond these four items is a luxury. A great way to determine if an expense is necessary is to ask this simple question: Do I need this to survive?
Even if something falls within those four basic necessities, it doesn’t have to be the most expensive thing. Find cheaper alternatives for your necessities and only purchase what you need.
3. Increase your income
Once you’ve established a system and habit for managing your money, it’s time to increase your income. The whole point of increasing your income is to have more cash to save, pay off debt, and ultimately invest. More cash does not mean more spending. Instead, in this case, it means more to work with.
4. Save up for emergencies
Now that you have extra funds coming into your account, use it as an opportunity to save for emergencies. Having an emergency fund prevents you from getting into more debt to pay for unexpected expenses. With this fund, you are essentially creating a backup plan for yourself.
5. Learn to invest
Investments are one of the most productive way to increase your income. Things like part-time jobs are great for quick boosts to your earnings, but the ultimate goal is to find a sustainable and consistent way to make more money which brings Nurture into the picture.
At Nurture , you can delay your un necessary expenses, invest them, earn profits on that money or discounts if it suffers a loss. Later, you can use your investments to pay for your expense when it can no longer be delayed. This way, you can either increase your money or buy your favorite product at an exclusive discount. You have nothing to lose!
You can break the cycle
Remember that changing a habit can be difficult, but with the right tools like Nurture and discipline, getting out of the cycle of living paycheck to paycheck is possible and totally worth it. Apply the principles shared in this post and see how your financial picture changes! Be sure to subscribe to Nurture's invitation list to get early access to our services.
Article inspired by: https://www.clevergirlfinance.com/blog/how-to-stop-living-paycheck-to-paycheck/?fbclid=IwAR3oRG6Z0PDLNrf3UVc3HHL2Xs1rxUWYvaZPwkbQBl145UsYjf4YHBt4aek