Break the Cycle of Living Paycheque to Paycheque

Do you ever find yourself struggling to cover expenses towards the end of the month and anxiously awaiting the deposit of your next paycheque? If so, you're far from alone. By some accounts, more than half of all Canadians live paycheque to paycheque. Constantly stretching every penny and worrying about money can be immensely stressful and may even become a vicious cycle as you struggle to make ends meet. If this sounds familiar to you, here’s what you can to do to break the cycle and start saving money each month. 

Track Your Income and Expenses 

If you aren’t tracking your expenses already, now is the time to get started. Knowing exactly how much you have coming in and going out each month is the secret to preventing your paycheque from disappearing the moment it hits your bank account. Make sure you: 

• Use apps to track every expense 

• Save copies of your receipts and bills 

• Keep detailed spreadsheets of every stream of income 

• Keep a close eye on your bank accounts and credit card balances 

Set a Tight Budget 

If you’re living paycheque to paycheque because you have too many expenses to cover, take a second look at your budget to see whether there’s anything you could cut back on or eliminate. Reducing financial bloat can give you back a good chunk of cash each month and may help you make each paycheque go further. To get started, you should: 

• Set yourself strict spending limits for each category 

• Call service providers to see whether you can negotiate your monthly bills 

• Switch to a credit card with lower interest rates 

• Cancel any unnecessary services or subscriptions 

Pay Off Debt and Build Your Savings 

One of the biggest chunks of many Canadians' budgets is debt repayment. If you currently see 10% or more of each paycheque disappear to credit card bills, student loans,  or other debt, eliminating that expense as soon as possible can give you back a significant portion of your budget. By cutting out the bloat, you can dedicate more money each pay period to your debts, which will help you pay them off faster. Once you've paid off those debts, save the money that would have gone to debt repayment. 

Unfortunately, when you live paycheque to paycheque, it’s all too easy to find yourself trapped in a vicious cycle of financial stress at the end of the month. Rather than continuing in this cycle and being unable to put away money for the future, try following these steps to break the cycle and achieve financial independence.