How to Make the Most Out of Living Paycheck to Paycheck

Close-up Of A Businessperson's Hand Opening Envelope With Paycheck Over Wooden Desk.
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If you’re living paycheck to paycheck, you’re not alone. A recent study published in November of last year found that seven out of every 10 U.S. residents live without a financial safety net. While it’s not an ideal situation, there are ways you can make the most of it and (eventually) work yourself out of it. 

For anyone who’s dealing with the daily burden of living paycheck to paycheck, we asked financial experts to weigh in and help explain how anyone can make the most of the situation. While their advice can help save money, it also can be used to start building a more solid foundation that can put you on the road to financial independence

Get on a Budget

The first thing you’ll want to do is work out a budget and stick to it. Jay Zigmont, founder of Live, Learn, Plan, said it’s critical to stop taking on more debt to help break the cycle.

“Lock your credit cards (away) and make debt not a choice,” Zigmont said. “The first step of getting out of debt is to stop taking debt.”

While credit cards are an obvious factor here, there are other red flags to avoid, including predatory payday loans. Creating a budget can help you steer clear of these pitfalls.

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“Budgets are like diets; the best one is the one that works for you,” Zigmont said. 

“With my clients, I encourage them to budget for Musts, Shoulds, Coulds and Won’ts,” Zigmont added. “Musts are all of the things that keep a roof over your head and/or you are required to pay. You pay your Musts first before going to your Shoulds. If you are truly paycheck to paycheck, you may never get to your Coulds, which reflects your discretionary spending. Total up your Musts; and, if they are more than you bring home, you either need to cut some spending immediately or take up some side work.” 

Negotiate Better Rates

Once you’ve organized your budget, it’s time to see what kind of adjustments you can make for your expenses. In some cases, there could be savings hiding in plain sight, as noted by Principal Attorney Lyle Solomon of Oakview Law Group

“Look over your current plans to see if there are any areas where you may save money,” Solomon said. “Are you taking advantage of all of the perks included in your phone plan? Do you watch the cable television you pay for? Is there a chance that you could get a better deal from another provider?”

The same can be applied to any insurance you’re paying for, especially when it comes time to renew any of your policies. You may save money by bundling your plans, as some insurance providers will give you a discount if you have two or more with them.

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Granted, this approach won’t work with all of your expenses; and, while you might not be able to choose a gas or electric provider, you can try to negotiate those rates.

“Alternatively, you can reduce your usage to reduce your expenses,” Solomon said, “even if it is only by a small amount. Many utility companies provide free energy audits, during which they assess your home and identify ways to make it more energy-efficient while saving money.”

Look for Cashback Perks

While looking for better rates with your bills, you also can look for ways to save on other essentials.

“Though it’s important to scale back on discretionary spending as consumer prices rise, learning how to get more back for the things you need to buy can take the sting out of the increased costs,” money-savings expert Andrea Woroch said. “It’s also a good idea to review your current credit card to ensure it’s giving you maximum back for the types of purchases you make the most.  

“Switching to a credit card that offers grocery rewards or gas rebates can make your dollars go further. Compare credit card reward programs at sites such as to find the best one for your needs, and that will give you the most back for your purchases.”

Be Frugal When Shopping

When you do need to buy something new, it doesn’t necessarily mean it has to be “new.” Woroch recommended shopping for used and refurbished items for those must-buy items.

“Shop fashion resale sites like that sell gently used clothing, shoes and accessories for the whole family to cut spending by 60 to 70 percent on average,” she advised. “Meanwhile, OfferUp is a great place to find used toys and home goods, and Best Buy or eBay sells certified refurbished electronics, appliances and even power tools.”

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Start Funding Your Savings

Once you’ve got your expenses in order and locked down the best rates, it’s time to start thinking about how you can start saving.

“Look for a savings account that pays interest but has limited access so you can’t simply move the money to a checking account,” Solomon said. “Make an initial contribution into your savings account after you’ve opened it, and then contribute to it whenever you can.”

He noted that some savings accounts can be opened with a minimum as low as $25. Once that’s done, you can make deposits to it automatically.

“Even if it’s only $10 or $20, knowing that you’re gradually increasing your savings reduces the stress of living paycheck to paycheck,” he added. 

If the automated strategy doesn’t work for you, he also recommended a “paying yourself first” strategy.

“Before you do anything else with your paycheck, put a modest portion of it into your savings account,” Solomon said. “Depending on your estimated expenses, it could be $5 one week and $25 the next. This strategy will ensure that you save at least a portion of your income.”

Have Patience

Obviously, living paycheck to paycheck isn’t ideal; and, while these changes can help, it will take some time to start seeing a real impact.

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“Patience is the key to success,” Solomon cautioned. “It takes time and energy to make the most out of living paycheck to paycheck. There are a few areas where you can reduce your expenses and it may take some time. Making even small contributions to a savings account can be incredibly stress-relieving and motivating. 

“But you can do it,” he added. “Have patience.”

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