Are you living Paycheck to Paycheck?

I really thought (yes naive) that I was the only one living paycheck to paycheck. I was listening to Tom Leykis yesterday (Radio Personality) and this person who was laid off from his job just broke down. This man starting crying on the air, explaining how he thought everything was going great for his job, his parents were so proud and then BOOM he got laid off from a bank and had no savings. He know lives in his car. This kid was going to school, but now can not afford it. It really really woke me up.


I do not want this to happen to me. Because in these economic times with an unstable job market, it can happen.


I have a decent job but for some reason my expenses (yes I have cut down) are still too high leaving me with no money to put away in savings.

I do have a 401k that is close to 5k now with only putting 100 each check in.

I found an article that will help me I believe and maybe you also if you are in the same position.

If anyone was in this position before can you enlighten us on how you started living not this way.

zenhabits.net...

My recommendation is that, whether or not you track your spending (and you should), at least do the following:

1. Stop the bleeding. Stop using your credit and debit cards immediately. Cut them up, or put them in the freezer in a ziploc bag filled with water, effectively freezing your cards. Also stop taking other loans, either from banks or finance companies or friends or family. Stop getting into more debt.

2. Start saving now! The next most important step you can take, in the beginning, is to start a small savings account if you haven’t already. Begin depositing into it regularly, at least $100 per paycheck but more if you can. If you can’t find $100 then see the next step for how. Make it an automatic deposit, the first bill you pay each payday, because it is the most important! A savings account will help you smooth out your finances — when an emergency comes up, like your car breaking down or someone having to go to the hospital, you won’t be thrown back into debtedness or brokedness. You will have some cash to pay for that emergency, and you can use your regular paycheck for regular expenses.

3. Look at discretionary spending. If you can’t find $100-200 to save per paycheck, then you need to cut some things from your spending. This is where tracking your spending comes in handy, but even if you don’t, you know some of the extras you spend on — cigarettes, coffee, snacks, candy, desserts, eating out, magazines, shopping for clothes or gadgets or toys or shoes, books, going out … these are just a few of the examples. I’m not saying you need to cut everything out, but if you can cut a few of them, or maybe just one at a time, that can add up. Then, take the money you didn’t spend on those discretionary items, and put that amount into savings each payday. Increase this over time. (See How I Save Money.)

4. Start a debt snowball to begin getting out of debt. If you haven’t read about debt snowballs, they’re simple. List out your debts and arrange them in order from smallest balance at the top to largest at the bottom. Then focus on the debt at the top, putting as much as you can into it, even if it’s just $40-50 extra (more would be better). When that amount is paid off, celebrate! Then take the total amount you were paying (say $70 minimum payment plus the $50 extra for a total of $120) and add that to the minimum payment of the next largest debt. Continue this process, with your extra amount snowballing as you go along, until you pay off all your debts. This could take several years, but it’s a very rewarding process, and very necessary.

reply to post by scanepchi


lol

I heard that caller myself...good times.

Anytime a Tom Leykis caller cries, it's a good thing.





As for change - I cut down on the recreational stuff...stopped buying copious amounts of dank and started drinking domestic beer...


We all have to do our part...


Hope this helped...

I have NO savings. I earn no where near enough to last me a week in food or shelter let alone savings.
I live with my Father, I'm 18, and trainee ship wage is laughable at best.
I don't smoke, don't do drugs (often) and don't pay for rent and yet the money I earn..

I'm 21 one, my wife is 19. We had a place of our own and decided things would be easier if we moved in her grandma's basement. Things have been alright since but we aren't getting anywhere.. I'm constantly brainstorming for ways to make money here and there and I don't enjoy the constant stress.

My husband looses his job we are toast. They already cut his hours and the car and mortgage are a month behind. We are about to loose the car, because no one will refinance to a lower rate.

If he looses his job we will not even have a car to live in. He has a junker he drives to work with 200k miles. Loosing my car means that one dies again no way to get to work and he looses the job anyway. Busses are not an option. No bus from here to there and it is an hour and half drive.

Savings? No way. Some weeks we can only get 30 in groceries. No money there to save.

I think many are stuck like this. We do not have credit card debt, I am just to sick to work, and he is working for all of us.

reply to post by amatrine


I feel for you, I too am experience hard financial times. We are barely able to keep up with the car/mortgage payments, have credit card debt and my wife is out on maternity leave.
We've really cut back on entertainment, maybe been out to eat at a restaurant 3 times the last year, no vacations, no silly extra expenses.

It's simple. Move to a smaller house, or move to a smaller apartment. Eat healthier, and less. Walk more or ride your bike more. Put on a sweater instead of raising the heat. Shower fast, or share a shower with someone (great for sexytimes). Instead of buying new things, buy used when possible. Look into how people saved money during the Great Depression. Be frugal. Get rid of your cable, and watch the shows you need to see online. Turn off all lights except the ones for the rooms you're in. Have slightly colder showers. Pack meals for work. Don't eat out. Find cheap or free ways to have fun. Don't drink. Don't smoke. Don't have expensive habits or hobbies.

Living within my means, staying out of debt, and saving 30% of everything I earn has led me to financial security.

reply to post by scanepchi


If the worst happens, or you are concerned with Money woriies and live in the UK, my advice is to make an appointment with the CAB (Citizens Advice Bureau). DO NOT bother with those debt help adverts, go straight to where you WILL get help. It is free advice and they really are there to help. If they can make it better for you they will (you may be entiltled to benefits, housing allowance ect.) and if not they will advise you on what to do.
Hope no-one needs this advice, but if anyone does hope they take it.

Best wishes

MCoG

I applaud the honesty of those in this thread. Usually on the Internet everyone has a 500-room mansion and a sub-basement full of gold bars...

It took me a long time from going to living paycheck-to-paycheck to actually having viable savings, but a big part of the reason it took so long is that I was young and stupid and overly optimistic. Then I got into a real financial pickle one year that opened my mind up and was like a slap in the face. Once I started living as cheaply as possible and saving as much as possible, it took me much sooner than expected to save up a year's worth of cash in the bank. To me that's the definintion of financial safety: not how many toys you have or how big your McMansion is, but how long you could survive without working. Most people can't survive more than a month or two, if that. So if you can save up six months to a year's worth of hard-money, raw cash savings, I'd say you are doing better than most. Make this your first goal and then take it from there. Of course its not easy to do, especially with debts and a family to take care of, but I think its a good goal to shoot for.

I cancelled my land line phone, cancelled the cable, negotiated down the internet service monthly fee, changed the cell phone plan to fewer minutes... dont go to restaurants... take my lunch to work every day.. cut out going to the movies or anything that costs money.

I did all this to get prepared for getting laid off.. and when I did get laid off, I was as ready as I could be.

I found a new job (thankfully) after 2 months, and I am not changing my habits at all.

We live paycheck to paycheck. I hate it. We were doing really well and getting things paid off then I lost my job due to the economy. We went through our savings and ended up back in the hole mostly on utilities and such. Thankfully we had a small windfall this month and after Friday we will be caught up on everything and hopefully have a little put back.
It has been tough but we are learning to live more frugally. We have learned so many tricks and it has been fun for us.
We homeschool and have always bought the kits to do with the kids which cost us over a thousand a year. Well I am proud to say for 150 I already have next years schoolwork lined up and ready to go. I pulled our state standards (thanks to awesome advice from a friend) and I spent 2 weeks going through the internet the library etc. and made up my own lesson plans. I believe these are better and more fun than what we were paying thousands for! My biggest cost was ink (I used refill kits) for the printer and paper.
We now fix breakfast for under 2 dollars a day for 7 people. If I can find good meat deals dinner is normally pretty cheap also and we eat leftovers for lunch if anyone is hungry. When we get a sweet tooth my daughter or I make cookies from home and it is so much cheaper than store bought and nothing is better than the house smelling like homemade cookies.
We are getting there but I am sure there is still so much more that we can learn. And we are slowly stocking up foods. Rice (we love it) beans etc. I just try to pick up an extra item or two when I go to put up for long term.
We have a vehicle that we are paying way to much for in interest but putting extra on it every 2 weeks hoping to get it paid off sooner. Only 1 credit card which has a balance around 2 grand but slowly paying it off and we do not use it anymore.
Even if things were to start to make a huge upswing I do not see us changing anything. Our eyes are finally open to how wasteful we have been and I never want to live like that again. We used to believe we had to take the kids on big elaborate vacations but found that a few days out in the forest with a tent and fishing poles made them happier. We spend some much more time together as a family doing fun things. Playing games walking the neighborhood. Or seeing who can came up with the next idea to help save a little more for a rainy day.

We are going into the red every month. I work part time but can't find full time. Husband is a mechanic that works on commission and he gets a car a day. last check was 45 hours. No one is gettin work done.

I already take advantage of angelfood.

Trimmed all expenses. But we are in over our heads. Problem is that our health insurance takes over a third of our income.

Then they only comver 80%. And we have been sick a lot the last year.

I have been living paycheck to paycheck for the last 4 years. It is no doubt very difficult. They make take my house, my car, my furniture, and everything else, but they won't take my pride. I will still find a way to survive.

Originally posted by silent thunder
I applaud the honesty of those in this thread. Usually on the Internet everyone has a 500-room mansion and a sub-basement full of gold bars...

It took me a long time from going to living paycheck-to-paycheck to actually having viable savings, but a big part of the reason it took so long is that I was young and stupid and overly optimistic. Then I got into a real financial pickle one year that opened my mind up and was like a slap in the face. Once I started living as cheaply as possible and saving as much as possible, it took me much sooner than expected to save up a year's worth of cash in the bank. To me that's the definintion of financial safety: not how many toys you have or how big your McMansion is, but how long you could survive without working. Most people can't survive more than a month or two, if that. So if you can save up six months to a year's worth of hard-money, raw cash savings, I'd say you are doing better than most. Make this your first goal and then take it from there. Of course its not easy to do, especially with debts and a family to take care of, but I think its a good goal to shoot for.

But what happens when we get to the point where money means what it is, and that's nothing at all...
What happens when money is as worthless as the paper it's printed on? Then what?
All they need to do is say, "Hey, the dollar is done, and we're no longer accepting it as currency.", and then everyone is screwed.

I've written four replies to this thread and keep erasing them because I sound like such a whiner so to keep it simple, yes things are tight and could get very hard should one of us lose our job. The grounds frozen and snow covered so I can't do any stonework and my eBay is down 75% since October. The silver lining maybe that there are some really great deals coming on the market by people desperate to make ends meet.

Quite frankly I am in utter disbelief at the state of the US and the state of the worlds economy. I feel like a mouse in a pig pen. Maybe it's a good time to be a zen buddhist raw foodist.

I am a single mom of 3 and have lived pay cheque to pay cheque all my adult life.
I have to alternate which bills get paid month to month so I am always a month behind.
This is my life and will be till my children are old enough to pay their own way.

I have no savings or retirement plan. I will work till I no longer breath.

Double Post on accident.

Sorry.

[edit on 9-2-2009 by Oreyeon]

My husband and I have lost everything in the past two years. Like EVERYTHING-and we were in the middle of enjoying the pregnancy of our first child. It was not enjoyable.
Anyway, we just had the conversation yesterday about looking back on the disgustingly excessive lifestyle we once led. I won't get into exactly how excessive it was but we were chatting and now we are actually kind of...happy? We've become very humble and you know what, we spend alot more time at home, entertaining at home with friends, just taking simple walks with our daughter. When we go out to dinner now its like a "big thing". We research everything we buy and we know we're making the right choice because we've checked Consumer Reports a million times before making a big purchase. I take more care of my home. I'm just kind of getting more satisfaction out of life and the effort I put in things.
This recession (and I never want to experience anything like the pain we did ever again mind you) has made us better people and better parents.

P.S-I second the advice of switching bills around so they're all about a month late...haha. It works!

What I find myself additionally doing now is checking out all of the junk mail and circulars that come to my house looking for the best deals at each market. I usually would throw them all away!

I also remember when younger I would always ask my mom why she would spend all Sunday morning collecting coupons. Now I am doing the same.


Saving is still hard for me, I feel like I have cut out everything, I used to go out all the time, now I go out maybe once a month, where are the hundreds of dollars Id spend on going out to eat and going to bars during the week and weekend, I should be saving?

I still do not see it. This worked for me before when saving for a trip and I am going to do it again. Take 100 dollars from each paycheck and put it in a piggy bank. I did not break it last time even when I was really really broke because I wanted to go on a trip. This time I won't break it because I want to survive in case I lose my job.

I'll tell ya how it works