How to Get Out of Living Paycheck to Paycheck Part I

The Next Paycheck:

• The problem is you’re totally dependent on the next paycheck.. You have no savings.

• It means you have days where you have no cash to hold you over until the next paycheck.

• You find another way to get that money which only makes it worse- for example: using credit cards, floating checks, do without basic essentials like groceries, clothing, pawn items,etc.

• When you do finally receive your next paycheck, you hurry to catch up on the expenses you weren’t able to cover from the last paycheck.  The worse part is you’re spending your money before you have it.  This creates a vicious cycle as you struggle trying to keep up with your finances.

You Lack the Funds You Need for the Basic Essentials—Which Can Lead to Financial Disaster.

For example, two clients of mine, a husband and wife, were struggling financially and having a hard time prioritizing their money. They decided not to put the wife on the husband’s insurance because they could not afford another $60 a month. Unfortunately, she began to have major health problems.

She went to a doctor and he suggested surgery. They decided not to go through with it even though she was suffering tremendously. Then she was in unbearable pain and forced to go to the emergency room, which costs much more. Soon, the medical bills begin to pile up which made the situation much worse.  Since originally writing this article, she did end up in the hospital for emergency surgery.  They went to a indigent hospital and still owde thousands of dollars all because of $60.

I had another client who was self-employed. He didn’t have insurance, not even basic hospitalization. Sadly, his spouse had to have emergency surgery. It ended up costing them their house—Thank Goodness they were able to find another one in the same neighborhood that was smaller and more affordable.

Live Within Your means

I had a client that came to me to teach her how to manage her finances. She never had to take on this responsibility since her husband was a famous musician, and made over six figures a year. Eventually, they got to a point where they could not pay their bills. So, they hired a CPA to do everything for them. Well, that person was having trouble living paycheck to paycheck as well and it affected them. They also just had a house fire. Their insurance company gave them 10K right away. They chose to live in a country club hotel for a few months until their house was repaired. They didn’t know how to live within their means.

In fact, this concept of living within your means is imperative to getting out of living paycheck to paycheck. You must learn how to do this. I prayed incessantly to learn how to do this. Finally, I learned and have been prosperous ever since.

The solution: see Part II

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