Living from paycheck to paycheck is not uncommon. However, it is inherently stressful. For those doing it, a single setback is enough to threaten their financial security. An unanticipated car repair or an accidental injury that forces them to miss a week or two of work will wreak havoc on the whole family’s stability. Before jumping right to bankruptcy, though, there are ways for those who spend every paycheck to end the cycle and regain their financial footing.

3 Ways to Stop Living From Paycheck to Paycheck 

1. Separate Savings 

Those who transfer their savings to a separate account entirely will be less inclined to spend these funds before the next payday. This small change will allow them to build up an emergency fund, which is the first step on the path to financial freedom and avoiding bankruptcy. 

2. Avoid Lifestyle Inflation 

Lifestyle inflation refers to the direct correlation between earning and spending. Instead of automatically spending any raises, bonuses, tax refunds, or other “windfalls,” why not save them? Falling victim to lifestyle inflation is a surefire way to remain stuck in the paycheck-to-paycheck cycle forever. 

3. Pay Down Debt

While some people who are living from paycheck to paycheck don’t earn enough, some got caught in the cog because they spent too much. As long as a portion of every check is going toward debt, putting money aside will be a challenge. Once consumer debts, medical bills, and student loans are paid off, though, more of every check will go toward future goals as opposed to past expenditures. 

3. Bankruptcy Option

However if the above suggestions don’t work it may make sense to consider  filing a bankruptcy case. Bankruptcy can be a fresh start. Sometimes things have gone too far and paychecks are being garnished, funds from bank accounts are being attached and there is no way to pay regular living expenses or save money. If that is the case a competent bankruptcy attorney should be consulted. 

For strategic financial advice that will end the paycheck-to-paycheck cycle once and for all, turn to Nancy V. Jacob. Practicing out of Cincinnati, OH, this bankruptcy attorney has been helping consumers discharge debt since 1989. Focusing solely on bankruptcy allows her to provide the most in-depth, relevant, and up-to-date counsel possible. To learn more about her legal experience, visit her website. To request a no-charge consultation with this bankruptcy lawyer, call (513) 921-1400.