Covering all of your monthly bills is a significant milestone. It’s a big step toward financial independence, but living paycheck to paycheck should only be seen as a temporary checkpoint, not a long-term goal.
Life can throw surprises at you. Being ready to handle them should be your next goal.
It means you can pay all your monthly bills.
But, there’s one big problem: you would face severe consequences if you missed a single paycheck. Your current savings wouldn’t be enough. As a result, living from paycheck to paycheck means your life is continually on the edge of financial ruin.
Yes! If you’re living this way, you’re not alone. 80% of American workers depend heavily on regular paychecks. More than 25% don’t have any savings, either. Even some higher-income earners can become stuck in the cycle, with as many as one in ten workers making over $100,000 unable to break out.
If you’re trying to stop living paycheck to paycheck, you have at least two options:
1. Make extra income
2. Reducing spending
3. A combination of both
The internet and other new technologies created all sorts of new opportunities to earn extra income.
And, the recent work-from-home trend is significantly expanding everyone’s options. Here are some ideas that help millions of Americans make more money.
One of the easiest and most popular ways to bring in extra cash is to put your vehicle to work for you. You can do taxicab-like rideshares for Uber and Lyft or deliver items such as food, alcohol, or Amazon packages. You can also help people move, or haul away clutter. This is just a shortlist. The opportunities are exploding for freelance drivers with their vehicles, and they can for you, too.
Do you like to write, draw, or produce music? How about travel, gardening or creating crafts?
The internet is turning millions of hobbyists into entrepreneurs through online blogs, stores, and social media platforms. If you are creative, there’s a good chance you can build an audience using today’s online platforms.
Believe it or not, the internet is starving for good content. You can work as a freelance writer and choose one of many avenues to get paid for writing in your spare time. Proofreaders and editors are also needed. Some places offer paid training for new writers, too. Or you can even start a blog and use a variety of ways to monetize it successfully.
Lifestyle videos have turned many hobbyists into full-time content producers. If you’re adept on a social media platform, there are ways to monetize it.
For example, online stores such as Etsy and Shopify let you sell crafts directly to your own customers online.
Upwork has many opportunities for a wide range of talents, including graphic design, administrative, customer and technical support, and marketing. Fiverr lets you perform many different creative “gigs” for a set price. FlexJobs is a paid service that sorts through the offerings to ensure legitimacy and find suitable matches to your skills.
In most cases, turning a hobby from a pastime to a profit-maker requires dedication and discipline. The more time you invest in improving your skill,researching the business aspects of it, and marketing it, the better your chances of success.
However, it’s much easier to push through the hard times if you’re passionate about your subject.
On the other side of the financial equation, is saving. To put money into your savings account more easily is to reduce spending. If you track every cent you spend, you’ll likely be shocked at how much money is flying out of your hands.
Fortunately, you can do a few things to help cut back without the impact being too painful.
If you can, pay off high-interest debt ASAP! It’s eating away at your income. Credit cards, short-term loans, cash advances, and other forms of high-interest rate debt can be anywhere from 15-20%, which can kill your wealth-building efforts. If you can, focus on paying your highest-interest loans first, such as credit cards.
Here’s the deal: if you’re successfully living paycheck to paycheck, you’re already budgeting! There’s always something we want (or need) to make our lives better. It’s a huge deal to be even somewhat financially independent, so don’t diminish your efforts!
If you start tracking every expense on a spreadsheet or budget app, you might start seeing expenses that can be cut. You’ll be shocked by your spending habits when taking the time to look at them closely. Look for anything not essential that you can eliminate.
Make a list of essentials in rough order of importance. Your list can include:
If you’re buying something not on that list, maybe it’s better to use that money to get your savings on track.
Experts want to see you keep at least six months’ income in a savings account. If impossible, do whatever it takes to save at least $1,000. With some minor changes to your spending, and maybe even taking on a side gig for extra income, you can reach the next stage of financial independence and have the comfort of income security.
If you’re looking for a bank that will work with you, look no further than Flyp. We offer fully digital banking with low-to-no fees. It’s already difficult enough to save money without your bank hitting you with multiple fees.
Join our waitlist to learn more.
Flyp is not a bank. Banking services provided by Sutton Bank, Member FDIC.