How to Pay Off Debt if you Live Paycheck to Paycheck 2023
There have been several surveys conducted over the years to determine how many Americans live paycheck to paycheck. According to Nielsen, the number ranges anywhere from fifty to seventy-eight percent. Gallup reported in 2020 that one-third of Americans didn’t pursue medical treatments because they couldn’t afford the cost.
Why is this happening? Much of it is due to debt.
Paying off debt is one of the better ways to alleviate the financial pressures of living paycheck to paycheck. The snowball debt plan is one method for doing this. In this article, we’re going to break down paying off debt into a few simple steps that even someone living paycheck to paycheck can take. These are some basic spending and savings behaviors to follow to be debt-free:
1. Create a Budget
Creating a budget is the first step. Knowing what you have for income and expenses is essential if you want to become debt-free. Put everything on a spreadsheet, including regular bills, non-essential expenses, and even small, seemingly insignificant purchases. It will be easier to adjust your spending and savings habits once you have it all down on paper
2. Separate Your Wants from Your Needs
You can’t eliminate the needs, but you can cut back on the wants. Review your budget and classify all your expenses into “essential” and “non-essential.” Many consumers do this and are shocked at how much money they are spending on things they really don’t need. That’s money that can be applied to paying off your credit cards and loans.
3. Don’t Try to Keep Up with the Joneses
One of the most common examples of this is upgrading your mobile phone. Do you know that the last six iterations of the iPhone all have the exact same operating system? Sure, there are a few new features in each new model, but the software hasn’t changed much at all. You don’t need the newest phone just because everyone else has one. Save money. Keep the one you have.
4. Start Using Your Debit Card
This might be the most powerful suggestion on this page. Instead of using your credit card for purchases, try pulling out the debit card instead. You’ll essentially be paying cash, which will make you more conscious of your spending. Do this for a while and you’ll find that those weekly paychecks are being stretched further and further. It just takes a little self-discipline.
5. Go Grocery Shopping Once a Week
Takeout food might be the biggest waste of money in America. It’s bad enough that you’re spending $5 for your morning cup of coffee at Starbucks. Add in a take-out sandwich or salad for lunch and your weekly takeout bill will be well over $100. Try grocery shopping once a week, making bag lunches, and brewing your own coffee at home.
The Bottom Line: Stop Accumulating New Debt
Create a budget, eliminate impulse spending, stop comparing yourself to others, pay cash, and cook at home. These are steps to stop accumulating new debt. Adopt these habits and whatever debt payoff plan you choose will work. They’re simple suggestions. If we all followed them, most of America would no longer be living paycheck to paycheck.
https://www.meetbreeze.com/blog/how-many-americans-live-paycheck-to-paycheck/ https://www.investopedia.com/articles/personal-finance/080716/debt-avalanche-vs-debt-snow ball-which-best-you.asp