Amazing; 5 Proven Ways To Avoid Living From Paycheck To Paycheck

By Lilian Wamaitha
It’s that month of the year and we are all feeling the pinch of being broke especially considering that the last time you saw a paycheck was probably on 20^th December last year.
But does it have to be like this really? Is it possible to make better financial decisions and avoid living paycheck to paycheck?
When you live paycheck to paycheck, it means that you are always struggling to make ends meet and often run out of money way before end month.
This can take a toll on you because you feel like you never have enough money even when you are earning a pretty decent salary.
You rarely have enough to pay for all your bills not to mention that you cannot afford to even set aside a mere 500 shillings for emergencies.
Most of the time, you find that each month you end up overspending and can never account for your money.
If you want to fulfill all your financial goals, it is very important that you stop living the way you are and here is how.
1. Budgeting is king
Anyone can write a budget! It’s simple and doesn’t take much of your time.
However, very few end up sticking to it. If you want to start accounting for your finances, you need to start budgeting ASAP!
But writing down budget and budgeting are two very different things. When you are budgeting in the right way, you are tracking each and every one of you spending and you stop running out of money.
A good budget incorporates all you expenses so that you are not caught off guard by things like insurance or taxes. It helps you in the long run deal with things like even inflation.
If you want to stop living from paycheck to paycheck, start by creating an effective budget that accounts for all your money.
Related: 5 Tips On How to Get Rich in Kenya Today
2. Cut back on what you are spending
This is step number two after making a budget. Once you have a working budget, you now need to cut back on unnecessary spending.
This frees up some money that you can use to pay off some debts or even set aside for emergencies.
Once you debts are paid off, you will now have money to spend each and every month.
Beginning you will find it a challenge to save for every category but once you get better at it, you will find more ways to save ad even speed up the process.
The best way to manage cutting back on your spending is to challenge yourself to spend for instance less than 500 in a week on food.
3. Set aside money every month
The best way to stop living from paycheck to paycheck is to have some money set aside either in a bank or a Sacco.
Once you are paid, start by paying yourself first. Great business owners like Chris Kirubi know that the best way to set yourself apart financially is to pay yourself first before you spend any money.
Let’s say you earn 30K, starting this end money after you are paid, open another bank account and transfer a certain percentage to the account.
This way you have money for emergencies. Imagine at the end of the year, let’s say you agree t0save 10,000 every month, we are looking at 120,000 shillings set aside just for emergencies.
In case you lose your job or something happens, you have enough money to live off for several months.
And not to mention that you stop worrying so much about running out of money when you know you can always withdraw from your other account.
4. Strive to get out of debt and stop paying with credit cards
Another great way of avoiding living from paycheck to paycheck is to get out of debt. Your debt is eating a chunk of what you are earning and holds you back from doing things that you want to do.
After budgeting set aside money that you will use to pay off your debts. Once you have paid them off, you will realize that you now have more freedom with you money and can even save.
And another thing, stop the habit of paying using your credit card. In as much as it is convenient, you end up spending more through impulse buying than you will do if you just paid in cash.
5. Don’t rely on your bonuses to get by
If you company offers bonuses, you may be tempted to rely on it to cover your expenses.
What happens when your company stops giving you bonuses, since it’s not guaranteed income?
Instead, create a spending plan for your bonuses and use that you reach your financial goals. You can even use it to pay some of your debts or as part of your emergency savings.
While bonuses help a lot, it would be wiser though to invest a portion of it.
Financial freedom is all about accounting for your money and wise spending and through this you will finally stop living paycheck to paycheck.
What are you doing to stop living form paycheck to paycheck? Share in the comment section below.
Lilian is a Communications Officer at Career Point Kenya. Got any personal finance related queries? Email them to lilian@www.careerpointkenya.co.ke.