Paycheck To Paycheck Living Is Not To Be Blamed For Your Debts

You live paycheck to paycheck?!

Paycheck To Paycheck

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Ah! Well, it’s cool man! No issues!

But, hey, you have debts too?!… Still man, it’s cool, completely no issues!!

Since the ancient times, the gurus tell us, we are born in the dawn, play in the day, sick by the evening, and dead by night!

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The line’s true, word to word! Today is today, and tomorrow is tomorrow! Our life is so small!

Live the day to the fullest, for who knows what comes tomorrow!

People who have tight finances trust in living paycheck to paycheck. In other words, ‘month in-month out’. Eventually, if you have good grip on your money, then the paycheck to paycheck lifestyle can never be a hurdle!

But many, who live such a lifestyle, believe that no matter how hard they try they can never exit this, and pay off their debts!

Is that so?!

Wealth Fit aims to change your perception of personal finances, rather than forcing you to live a different life altogether. Living paycheck to paycheck can never be a problem when you want to get rid of debts.

You can surely live the way you want your life to be. Only, a little money personality, a good budget, and some nice spending habits will pull out the job.

Howbeit,

How much you earn, does matter at the end of the day:

Your income is what makes your ‘living’ possible! If you have a decent salary coming in each month, then spending it the way you like, is no big deal.

But if your income is low, and on top of that your ‘paycheck to paycheck lifestyle’ is very reckless, then buddy we have a serious problem.

At some point of our financial life, nearly all of us come down to one big question, whether to save or pay off debts! We say someone is living paycheck to paycheck, only when the person brings a month to an end without having done any savings!

Still, that doesn’t mean you should not pay your bills! If you finish up your salary, just by doing moderate spending and making debt payments, then things ain’t that bad, I tell you that.

But, if your monthly income is somewhere around $3000-$4000, and still you can’t pay off debt or do savings, then the case has gone pretty deep!

The current average income per month in US is standing around $3500. That amount of income is not bad at all. You can do a lot of things with that much amount coming in each month.

However, it’s always better to have more income, as you will have more room to fit in significant savings and other types of expenses.

In addition to it, with more income in hand, you can make more debt payments, and subsequently get out of debt fast.

Even after earning a polished amount, if you can’t pay off debts and build wealth, then you are lacking the wealth mindset.

Only you can help yourself in building a dedication towards being debt free.

This post is exclusively made keeping those people in mind, who are eager to pay off debt by hook or crook!

And, keeping only them in mind shall we continue!!

What budget is best when you plan to clear debt while living paycheck to paycheck?

A good budget is one that has the power to divide your salary proportionately into all your expenses.

And, the best budget that I can now think of is the Zero Based Backward Budget. With time, this budget has grown to be very popular, and many American households have already started to use it, due to its convenience.

If you already know about it, then that’s good, and you should definitely put it to good use.

And, for those who are hearing it for the first time, here’s what this budget actually does.

This budget is an amalgamation to two different budgeting breeds, one is the Zero Based Budget, and the other is the Backward Budget. The latter is also sometimes referred to as the Reverse Budget.

These two different budgets have two different mottos, and when combined together, we have an amazing new budgeting strategy.

A zero based budget is typically used by big financial corporations, where they list all their expenses and then subtract it from their income, to see their level of profit in business. If the result comes to zero, then they have not made any profit for that financial year.

When we use Zero based Budget for our personal finances, the game is quite similar.

You will have to make a list of all your probable expenses for a month and write down fixed dollar values beside all your expenses.

Once complete, you get the sum total of your expenses, and then subtract it from your salary amount. If the result is zero, then there’s nothing more to do. But if you get a remainder amount, then you will have to put it down to some good use.

You can check if you have missed out on listing any other expenses or not!

Better even, if you can’t find anything else to list, then use that remaining amount to do extra savings or make extra debt payments.

Now, taking a turn towards Backward Budgeting.

This budget is made to address the most important financial obligations first. Generally people use this budget to increase savings and make it their first priority.

In your case, I am guessing, you have severe debt payments to make. So, your first and foremost priority expense is those payments.

Now, you infuse both the budgets, and start listing your expenses keeping debt payments at the top, getting maximum attention. You can choose your payment amounts as per your likes.

And, then with whatever’s left of your paycheck, you keep on carrying out your other expenses as usual.

That’s all about the budgeting part. We hope that you won’t have much of a hassle utilizing your salary efficiently from now on, if you use Zero Based Backward Budget properly!

But, most of all,

Having a good debt relief option in hand, makes things a lot more easier:

There are times, even when a nice budget fails at helping you achieve your debt free dreams. And that’s definitely when you should search your options for debt relief.

There are many to choose from, and I am not at all balling you down to a muddy road. There are many people who have made real good use of debt consolidation, or debt settlement, or even Bankruptcy Chapter 13 when their finances don’t stand with them in the debt war.

Debt consolidation is one such debt relief process, where you will satisfy all your creditors by paying off your debts in full. Moreover, as you will not leave a single penny unpaid, you will also increase your credit score.

Debt settlement however may not be as fruitful for your credit score! But yes, right negotiations done with the creditors, by a good settlement company, will help you to pay a lot less on the total amounts owed.

Whatever option you choose, you should be able to comfortably follow it, and it should run parallel to your financial life!

By the way, if you plan to work with professional consolidation or settlement companies, then beware of the scam threats that quite a few of them pose.

Then also,

Mending your spending habits is equally important:

No matter how well you make up your personal budget, or what good debt relief option you choose, if you can’t mend your spending habits along with, then you can never be successful at paying off debts.

You should understand your spending behavior. You should have control over what’s going out of your accounts. If most of your transactions are made with credit cards, then you have to understand where to draw the line.

A maxed out card, and a nearly finished debit account, are no one’s sweet wish! Know the difference between what you need, and you want.

Your needs are the first priority, whereas your wants are falling under luxury expenses.

We are not asking you to lead a frugal life. All we ask of you is to be intelligent and make the most out of your income. There’s absolutely no reason in living a paycheck to paycheck lifestyle, forever.

Break the cycle, try to save at least something each month, by cutting down on unnecessary expenses.

If you can make your own tea or coffee, then why go to Starbucks??

If you can cook your own meals, then why eat out?

See, there are so many ways you can bring things down, to work in your favor.

As a last ending tip, I would suggest you to cut out on credit card usage to the maximum level possible, and totally stay away from payday loans.

If you can follow all the guidelines and read all the ideas displayed in this post, in detail, then we assure you, that you will never again blame the ‘paycheck paycheck game’ for not paying off debts.

Goodbye, for now, and don’t forget to join our mailing list for free; *look below*; to get regular updates on more of these topics.

Stay happy, and lead a healthy financial life!



About the Author

Andy Masaki
Andy Masaki is a blogger and contributor at Oak View Law Group. He is a debt expert and a member of several online forums where he shares his advice as well as tips to lead a financially independent life.