6 Steps to Take to Stop Living Paycheck to Paycheck

Living paycheck to paycheck feels a lot like getting nowhere fast. Here's how to break the cycle.

If you've ever wondered if you'll have enough money to get you through until your next payday, you know what it's like to live paycheck to paycheck.

Living paycheck to paycheck means:

• Knowing that you're in financial trouble if your next paycheck does not arrive
• Stressing about how extra, unexpected bills are going to get paid

Whether you earn $25,000 a year or $2.5 million, it's possible to find yourself living from one paycheck to the next. Here, we'll cover six steps you can take to get off the hamster wheel and take control of your personal finances.

1. Investigate where your money is going

This may be the most challenging step you take. It involves sitting down with your bills and bank statements and figuring out where your funds go each month. Go back two months and make a list of where you spent money, along with how much was spent.

Although the process may take less than an hour, it can feel longer as you realize the "black holes" into which your income disappears.

One thing that may help with the process is to stop thinking of certain expenditures -- like cable, lunches with friends, and new shoes -- as "bad." If it's legal to buy, there is no such thing as a good or bad purchase.

If you spend an hour beating yourself up over how you've spent your money, it will lead to guilt. And when it comes to making healthy decisions, guilt is a hindrance. The trick is to figure out which purchases enhance your life and which make your life more difficult.

2. Slash unnecessary expenses

This exercise can help you hone in on what we just discussed -- purchases that enhance your life. Without putting too much thought into it, go through the list of expenses and cross out anything that didn't add value to your life.

For example, if a neighbor talked you into a round of golf (and you hate golf), cross that expense off your list. If you're paying for a streaming channel but rarely watch television, scratch that expense. If you're spending more than you're comfortable spending going out with friends each week, cross it out for now.

3. Look for wiggle room

Most budgeting methods come down to listing how much money you have coming in each month and how much must be spent on expenses.

First, you have "fixed" costs, like housing. Until you move, your mortgage or rent is likely to remain the same.

But you also have expenses with wiggle room. For example, you can take steps to minimize the cost of utilities, groceries, and in-home entertainment.

And if you're honest with yourself, you may find a few expenditures you can do without, like subscription box services, a gym membership that hasn't been used since the last Bush was in office, and extra toys for your pet.

4. Look for holes and plug them

Here are a couple of ways to plug holes in your budget:

Identify what you care about. For example, if the only way you can relax in the evening is to turn on Netflix, don't cut it from your budget. However, if you're less interested in lunch with your coworkers three times a week, trim it back to once a week.

Look around for things you no longer use. Back in 2014, the LA Times looked into how much "stuff" the average person has in their home. The number was a staggering 300,000 things -- counting all the small things, like paper clips and kid's toys.

Even if you have a fraction of that number, it's unlikely that you need or use it all. Decide what you can part with and sell it.

Let's say you have:

• A barely used margarita machine in your basement that you can sell for $75
• A box of old toys that will fetch $50
• A chair that could bring in $25

That $150 to cover an outstanding bill or go into a savings account.

5. Consider a side-hustle

The last thing anyone wants to be told when they're already stressed is to get another job. That said, there are some side-hustle apps that can connect you with really cool gigs out there. These side jobs could bring in enough to pay overdue bills or build an emergency fund.

Even if you're unaware of them, you possess talents that can benefit other people. You can teach guitar, a language, or cooking online. Depending on the licensing laws of your state, you can watch kids before and after school. And if you're crafty, there are many sites dedicated to selling your wares.

Start by telling yourself that you're going to keep up the side-hustle until finances aren't quite so tight. Later, you can reassess the situation and decide if you enjoy the side job enough to keep it.

6. Don't be afraid to ask for help

If you dream of enhancing your skills and preparing for a new career, look for low-cost (or free) courses through community colleges, community centers, and senior centers. Attend networking events whenever possible, expanding your professional reach.

If your earnings are very low, check government programs like food stamps, subsidized housing, and unemployment. If you are on unemployment benefits, consider volunteering for an unpaid internship with a business you would like to work for one day. It's a great way to gain experience and meet people in a position to hire.

You can't expect to jump off the paycheck-to-paycheck hamster wheel in one day. The steps you take are like train tracks, each moving you closer to your desired destination. It begins with honestly assessing your financial situation and making budget changes that you can live with. The next step involves finding extra funds to build a financial security net. Once you've done that, you can focus on ways to live fully but below your means.