How to avoid living from hand to mouth every month. According to Forbes, 78% of workers live from paycheck to paycheck. Follow these tips to help you seal those money holes that are draining your income This way, you will learn how to avoid living from hand to mouth every month and start enjoying your hard earned salary. Sure, you can get by living hand to mouth, but it’s not fun. The worry. The stress. It’s just not worth it. Life is so much more enjoyable when you are confident about your financial future – whether it is tomorrow, next week, next month, next year, ten years down the road, or into retirement. You don’t have to have a six figure income to be happy and secure. However, you do need to live within your means and have a savings plan in place. Once you get your financial life in order, the more you will enjoy today. Take care of your five needs first. When you’re setting up your budget, you’ll write down your income and then start subtracting your expenses. What expenses should you cover first? The essentials, aka the five needs. The five needs are your top priority, so make sure your budget is ready to pay for these things in this order before anything else: 1. Food 2. Utilities 3. Shelter 4. Health 5. Transportation After you take care of those, make a list of everything else you need to pay and tackle it in order of importance. When you run out of money, that’s it. You stop spending. But by starting with the five needs, you’ll know you’re keeping your family fed, your lights on, a roof over your heads, health and gas in the car to get to work. Suckers of joy. One of the suckers of joy when it comes to working is living in lack even when you have a regular salary. How disappointing and demotivating is it when you have to be frugal, not by choice but because circumstances have forced you? The stress that grips you in the middle of the month when you realize that you have very little to live on for the remainder of the month is debilitating. It leaves you coming up with contingency plans that sink you into further problems such as getting into bad debt to finance your lifestyle. If there is no intervention done in time, the vicious cycle of failure and lack will only get worse. So what should you do? Just learn how to avoid living from hand to mouth every month. Start an emergency fund. Let’s talk emergency fund. First things first, you need a starter emergency fund of $1,000. You might wonder why the heck you need to save right now if you’re busy just trying to make ends meet. But guess what? Knowing you have this buffer between you and life will bring you so much peace. It’s your safety net for those “life happens” moments. If you get into a jam, you can pay cash without worrying about which bills you’ll have to skip this month to cover things. Listen: You absolutely can save up to $1000, you just have to make small (but intentional) daily, weekly and even monthly changes. And it will be totally worth it. Stop living with debt. Okay, so here’s the deal: Debt holds you back. It’s got you paying off last year’s Christmas presents in June. And then you’re stuck paying off that beach vacation in December. You can’t get ahead like that. And debt is getting sneakier and sneakier. These days, installment payment companies are on the rise. They tempt you at checkout by saying you can pay for that French press in four easy payments. Do you really want to sink money into your fancy beer for four months? (No.) Listen. Living with debt of any kind, is one of the biggest things keeping you in the paycheck-to-paycheck cycle. Think outside the box. Firstly, learn how to avoid living from hand to mouth every month. You should realize that you’re not alone. According to Forbes magazine, 78% of workers live from paycheck to paycheck. Therefore relax and don’t get drowned in anxiety. Rather be sober and get your head in the game because it will help you make rational decisions concerning your money moving forward. The following are some of the tips that you can employ to seal those money holes that are draining your income. Track your monthly bills. When someone goes to the hospital for treatment, the first thing the doctor does before commencing treatment is diagnosing the source of the problem. Tracking your expenses is like diagnosing where you lose the bulk of your income. In my opinion, diagnosis is the most important part of the journey towards financial freedom. A couple of years back, I was an apprentice in one electronics repair shop and for every damaged device, there would be a very detailed evaluation of the damage procedure. Once the source of the damage was revealed, it determined the kind of intervention that would be most appropriate for that problem. Tracking your expenses means recording every shilling you spend for the month. Don’t leave anything out including the subtle yet dangerous transaction charges. For example, when you use electronic money transfers, they always attract transaction fees. Many people often tend to overlook and ignore those little money suckers yet their impact on your money is significant. Personally, I decided to monitor my transaction fees for a month and discovered that it took up almost more than 2% of my income. I had to make changes and bring those fees to a minimum. The most important part is forming a habit out of it such that you’re always conscious when spending money. You should consider withdrawing money in bulk for your needs and paying physical cash for your expenses where necessary. This will greatly bring down your transaction expenses. According to financial experts, one area that bleeds people’s cash in a devastating manner is eating out. Restaurants are fun and enjoyable, but they are an unnecessary expense that you can do without. Additionally, you should also check your spending habits on snacks and impromptu lunches. You need to learn how to tame your urges and cook food at home. Customize the answers to your monthly needs. These general solutions can only effectively work for you if you tailor them to your lifestyle. It’s like a material from which you cut out a cloth that fits your body type. Once you observe your expenses you’ll be able to see what you can do with or without. The problem with taking financial solutions from the internet and copy-pasting them into your life is that they will further worsen your problems. You should look at how these solutions can be applied to your life in particular because we all go through different challenges and needs. For instance, monthly expenses between a man and a woman would differ significantly because demands and needs are different. As such, a woman’s budget will look different from a man’s budget. Generally, men are more minimalistic compared to women. Similarly, a husband and a bachelor have different needs and responsibilities therefore their financial plans have to be customized to accommodate their different lifestyles. This point should be coupled up with spending less than you earn. Financial experts at Centonomy advise that you should spend 50%, save 20% and invest 30% of your income. Make the sacrifices you need to make even if they are painful. If for instance you’re single and you live in a two-bedroomed house, you should move to a one-bedroom house or even to a bedsitter establishment to minimize your rent expenses. It’s not pleasant but the results are impressive if you are patient with the process. The solutions that I’m proposing don’t give instant results but they require patience and discipline. Because the end goal is forming the habit of making sound financial decisions for the rest of your life. Live on a doable budget. Financial experts say formulating a budget is telling your money what to do. Having done this for a while I would recommend you observe your expenses first before you come up with an appropriate budget. As discussed in the previous point, you need to know your needs and distinguish them from your wants. Your wants are things you like and can do without but your needs are those things that you can’t do without. Having known what your outflows look like, make a budget as soon as you receive your monthly salary and stick to it as much as possible. You will be tempted to go over your budget a lot and there are times where you will fail. But even in failure don’t give up. Dust yourself and get back on track as long as you’re making progress. Start by making baby steps and with consistency and discipline you will grow towards perpetual success in your finances. Save up for big purchases. Nothing makes you count down the minutes to payday more than if you just blew a ton of money on a big purchase. So, if you see something coming, like you notice the tread is getting real worn on your tires, save up and pay cash. That way you’re putting a little away each month instead of blowing an entire month’s budget. Secondly, when you’re living paycheck to paycheck, you shouldn’t make nonessential big purchases. We mentioned vacations, but think of the stuff you know you want (but just don’t need) like that awesome gaming system a friend is selling. Even if it’s a great deal, this isn’t a great time. So just say no. Meal plan. Food. It’s the first of those Four Walls, and you’ve got to eat. But it’s also a budget category that can get out of control if you aren’t careful. When you meal plan, it’ll help you avoid the temptations of the drive-thru because you know what’s for dinner back home. Plus, you’ll spend less on groceries when you know exactly what you need to buy for the week. No more random impulse purchases or tons of fresh veggies that end up moldy in the trash! You’ll waste less and spend less, which frees up space in the budget and helps you move ahead. Increase your monthly revenues. Side hustles that supplement your income are advantageous when it comes to living in financial peace. Taking on an additional job could be tasking and pressing. But an extra income will help you break the cycle of living from paycheck to paycheck and promote you to living abundantly. One of the best ways to get a side hustle is to leverage your skills and talents. Look for freelancer sites such as Upwork and Fiverr and update your career profile. Sell stuff. Now it’s time to bring in more money! One of the easiest ways to get your hands on some extra cash is by selling whatever you can. Maybe that’s your jewelry, clothes, baby items, or even the extra car sitting in your garage. Look, if you can part with something and get cash, do it! You’ll give your bank account or budget some extra padding, which is overwhelmingly helpful when you’re living paycheck to paycheck. Get a temporary job or start a side hustle. If you’ve set a budget and sold some stuff, but you still can just barely make ends meet, you might need a steady way to increase your income. Find a second job or side hustle. Some great options for making extra money are waiting tables, driving for Uber or Lyft, being a barista, working at a call center, or signing up to be a substitute teacher. There are even plenty of remote jobs you can do after hours or on the weekend too. And this can help you learn how to avoid living from hand to mouth every month. Yes, it will be hard. But this is only for a season. Once you get some money in savings and debt out of your way, you can slow down again. Live below your means. This is important, so don’t skip over it: Making more money will do you no good if you keep spending it all. Don’t start a side hustle and keep living a lifestyle you can’t afford. If you aren’t careful, a bump in pay can make you spend even more money. That’s called lifestyle creep or lifestyle inflation. All of a sudden, you can afford things you couldn’t before and you might start becoming pretty loose with those purse strings. Sure, it’s tempting to spend more money when you’re making more of it, but don’t do that! Remember why you took on that extra job in the first place. Stay intentional, pay attention, and stick to your budget. Look for things to cut. If you’re living paycheck to paycheck, this isn’t the time to buy T-bone steaks for dinner, take a fancy vacation, or visit your favorite restaurant. This is the time to cut spending. Look for any area in your budget where you can spend less. We know making sacrifices like this doesn’t feel good. It hurts! But keep reminding yourself: This is not forever. You’re making temporary sacrifices. It’s time to put in the work now so you can be in a better position in the future. Think long-term goals. Set goals for your financial life and let them guide you. The late Zig Ziglar is famously known for saying that if you aim at nothing you will hit it 100% of the time. Choose to live a better life and agree to make the painful changes because whether you like it or not, financial freedom comes at a cost. Also, ensure that you get out of debt and minimize your credit intake because interest rates will keep sucking the life out of your paycheck. Only take loans when you absolutely need them and you have an elaborate repayment plan. Start your journey towards finance freedom and peace now. Remember your why. Living paycheck to paycheck can feel like getting stuck in a revolving door with your money. You’re going around and around and never going anywhere because you don’t know how to avoid living from hand to mouth every month.. As soon as you decide you don’t want to go in circles anymore, you start all these tips and make movement. It can be slow. It can be hard. Some days you might want to give up. Don’t give up. When things get harder, remember your why. If it helps to think about the big future goals you’re working toward one day traveling during retirement, paying for your kids’ college tuition, or buying that condo on the beach then do that. If you just need to think one step ahead right now and imagine a life where there’s no fear of overdraft fees or hearing your card has been declined, then focus on that. Because it’s coming soon when you learn how to avoid living from hand to mouth every month. Remember your why on that shift delivering groceries. Remember your why when you hold back from hitting “add to cart” even though you really want the shoes. Remember your why when you make your own coffee and skip the barista. Some days will be more challenging than others. And making such a huge change in life will be tough. But you’re tougher just mind how to avoid living from hand to mouth every month and enjoy life to the fullest because you deserve to be happy.