I have been living paycheck to paycheck for at least three years now. Whenever I think that things are going better an emergency comes up and I am right back to where I started again. I have a good job as a nurse but I work long hours and all I want to do is crash when I get home. I can’t do some of the things that I want to do like go on vacations, got to lunch with friends or buy nice things. How can I get out of this cycle?
“Down in Denver”
Dear "Down in Denver,"
I am sorry to hear that you are so discouraged! Let me help. Almost everyone knows what it is like to live paycheck to paycheck at least once in his or her lives. It is also not uncommon to go for a few years living this way – even with a great job like yours. But let’s get you out of your so-called “cycle.”
What if someone handed you a magic puzzle and said, “If you solve this puzzle, you can get out of debt, save up money, and stop living paycheck to paycheck.” It is a difficult puzzle at first, but it can be done.
Plus the puzzle gets easier as you go along! Would you sit down right now and do this puzzle?
I loved this puzzle so much that I once did this same puzzle over and over again for ten months! I calculated that I saved over $18,000 than I would have without this "puzzle." Just like any puzzle, every time you do it again, it gets easier.
Now, what if I told you that the name of this puzzle is “a budget?” Have you lost interest? You shouldn’t. I can show you that you can still have as much fun on a budget as you do off of one. If you take 5-20 minutes you can start it right now.
Let’s not call it a budget — let’s continue to call it a puzzle.
1) Start with this "puzzle:"
Chapter 1. The "feed me" puzzle:
If you are a single person, you can probably live on $200-$225 a month for food (add $120 per month for every person in your household). Have a friend over for dinner instead of going out. Cook all of your meals ahead of time on Saturday or Sunday, so your weeknights are worry-free. Eat that extra turkey from Thanksgiving that you froze.
Chapter 2. The "fun" puzzle
For entertainment, try using less than $200 a month if you are single (add $80 per month for additional household members). Read a book together as a family. Teach a friend how to play tennis at the park!
Chapter 3. The "make me go" puzzle:
I know that gas is getting expensive, but try to use less than $200 a month for one person (add $120 a month for each vehicle). Carpool, drive less, and drive slower. Ride your bike to the grocery store.
Chapter 4. The "everything under the sun" puzzle:
Lastly for miscellaneous (hair, gifts, clothes, etc.) use $120 a month (add $80 for each person in the house). Cook dinner for your mom for her birthday instead of buying her a sweater that she doesn’t really need. Buy new jeans at a consignment store instead of a department store.
If you use your budget quickly, plan on staying home and snuggling with a good book for the weekend. If you are under your budget for the month — you win!! Now pay off some of those bills or save for the vacation in a high-yielding savings account or money market account.
Remember that you don’t always have to be on a budget but the longer you are — the more you will have saved and the more debt you will have paid. Try it during the odd months and off during the even (just don’t “binge” during the off months).
Let me know how it goes!