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Living paycheck-to-paycheck can be very draining and inadvertently affect everyone in your household. While you may be paying your bills on time and covering all your monthly costs, one unexpected expense can cause the house of cards to come crashing down. Sure, you could try to get a second job or start a side hustle, but in reality, it’s not that easy – especially if you’re raising children.

Breaking free from this financial cycle can often feel impossible. But there are moves you can make to begin building your savings and eliminate the stress of the paycheck-to-paycheck lifestyle. Here are eight tactics to explore that can help you get a handle on your finances.

1. Know Where Your Money Goes

Tracking your expenses is a crucial first step in breaking free from this cycle. Without knowing where your money goes, finding ways to build your savings and provide the financial cushion you desire can become extremely challenging.

If you prefer to use cash, it may be difficult to track your expenses accurately. Instead, use your debit card so that all transactions will be listed on your monthly account statement. Then use your statement to create a budget and find areas you can cut back.

2. Prioritize Your Spending

While creating and maintaining a budget is one of the best ways to manage your finances and limit frivolous spending, it’s not for everyone. You can still prioritize your spending if you’re not the budgeting type.

Organize your monthly expenses into two categories: Urgent and Non-Urgent. Urgent expenses include bills you must pay each month, such as loan payments, groceries, gas, and insurance. Always prioritize these expenses first. You should also have your savings in this category. Get in the habit of paying yourself first – putting money aside in your savings account. You can then use any leftover money for Non-Urgent expenses like new clothes, entertainment, or dining out.

3. Exercise Caution with Credit Cards

Credit cards are one of the most convenient and beneficial forms of payment. Three common reasons people use credit cards are to pay for items over time, cover unexpected expenses, and help with cash flow until the next payday. While credit cards are great financial tools, the interest charges can set you back further if the balance isn’t repaid that month.

If you want to get ahead on your finances, it’s wise to consider only using your credit cards in emergencies. Instead, work to structure your monthly expenses around your paycheck cycle and stick to using your debit card.

4. Start Saving

When living paycheck-to-paycheck, building your savings often seems impossible. The trick is to open a separate savings account at the credit union that you cannot easily access. You want to be able to transfer money into this account but not withdraw it unless absolutely necessary.

Then, begin making small deposits into this account, such as $5 a week. Don’t worry about the amount right now. Instead, your goal is to build the habit of transferring money into this account regularly.

Suppose you find that you aren’t disciplined enough to put savings aside manually. In that case, you may want to consider signing up for payroll deduction or automatic transfers. Both of these options allow you to automate your savings either when your paycheck hits your account or on a specific date each month. Again, start with a small amount and slowly increase it as you feel more comfortable.

5. Plan Your Meals in Advance

If you and your family are constantly on the go, eating out is likely a common occurrence in your household. It can also drain your finances, especially as prices continue to climb.

Instead, work to plan your meals for the week in advance, then buy food in bulk. Spend one day cooking and dividing up the meals into daily portions. You can then keep one or two portions out for that week’s meals and freeze the rest. This strategy will help you reduce the amount of prep time each week as well as curb the temptation to dine out.

6. Review All Recurring Bills

Take time to review all of your recurring monthly bills and look for areas you may be able to cut back. Be sure to contact your internet provider, phone carrier, TV subscription services, and insurance companies and ask for help reducing your bill. Most companies will work with their customers to find cheaper options or identify features or services they really don’t need. Quick phone calls to your service providers could free up extra money that will give you more financial wiggle room each month.

7. Refinance Your Current Loans

Loan payments, such as your mortgage, auto loan, or credit cards, tend to make up most of your monthly expenses. However, they also provide the greatest opportunity to save. You could easily save money each month by refinancing your loans to a lower interest rate or by extending your term.

If you have multiple high-interest credit cards, consider a debt consolidation loan. This type of loan will combine all your outstanding high-interest balances into one lower-rate loan that is easier to manage. It can help you save money on interest each month and pay your outstanding debt off quicker.

8. Treat Yourself

Cutting back on your spending will help you break free from the paycheck-to-paycheck cycle. Still, it’s also important to treat yourself occasionally. Like a cheat meal when on a strict diet, treating yourself now and again can help satisfy spending temptations, alleviate stress, and get you focused again on the long-term goal.

We’re Here to Help!

Although breaking free from the paycheck-to-paycheck lifestyle can be challenging, it’s not impossible. With consistent effort, you can begin building your savings and alleviate much of your financial stress. Remember, your goal is progress, not perfection. If you mess up, that’s ok. Learn from your mistakes and keep going forward.

If you’re interested in learning more about budgeting or would like to review products, such as savings accounts, debit cards, or debt consolidation, we’re ready to help. Please stop by any of our convenient branch locations or call 800-531-8456 to speak with a team member today.

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Each individual’s financial situation is unique. We encourage you to contact United Texas Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.

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