How to Stop Living Paycheck to Paycheck in 2023

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  • Living paycheck to paycheck can mean risking debt all the time.
  • There are steps you can take to stop paycheck to paycheck and start enjoying more financial wiggle room.
  • A side hustle can help you bring in extra income to give you a financial cushion, and paying off debt can also free up more of the money you make.

These tips can help you break that unfavorable cycle.

If you're living paycheck to paycheck, you're most certainly not alone. Many people need to wait for their next paycheck to arrive to cover their bills and don't have much breathing room in between.

But no matter why you're in that situation, it's not a great one to be in. It can make for a very stressful existence, especially when unplanned bills creep up on you.

If you're tired of living paycheck to paycheck, worry not. There are steps you can take to bust out of that cycle in 2023. Here's what to do.

1. Start following a budget

The better a pulse you have on your money, the easier it should be to manage it. To this end, it pays to set up a budget if you haven't been following one. That budget should account for your various monthly bills, and, ideally, it should help you identify costs you can cut to free up some money for your savings.

2. Pick up a second job temporarily

You may not have a lot of time -- or desire -- to work a second job on top of your main one. But if you want to boost your income and stop living paycheck to paycheck, then you may need to make that sacrifice for a bit of time -- say, six months or even a year.

That doesn't mean your side job has to be burdensome, though. You can find a gig that's flexible and works well with your schedule (for example, you can sign up to drive for a ride-hailing service and pick up fares when you have time). You may even manage to find a second job you can do completely from home.

3. Build an emergency fund

Having money in your savings account will make it so you're able to pay your bills even before your next paycheck arrives. And following a budget and working a second job could make it possible to build up some savings you can tap for unexpected expenses.

In fact, you should ideally have enough of a savings account balance to cover three months of essential living costs in full. It might take some time to get there, and you may not hit that target in 2023, but the more you are able to save, the better.

4. Shed costly debt

If you owe money on your credit cards, your monthly payments are no doubt monopolizing a large chunk of your income. And so the sooner you pay off your balances, the sooner you can start freeing up money for other things.

A second job could make it possible to chip away at your debt more quickly. But also, you can try to find ways to make your credit card debt easier to pay off. That could mean consolidating your debt with a balance transfer or personal loan.

If you're frustrated with the paycheck-to-paycheck lifestyle, know that you're not trapped in it permanently. You can take these steps to improve your financial situation so you end up in a much better place by the end of 2023.

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