A large part of the working population lives paycheck to paycheck. As a result, any unplanned expense that comes along such as a home or auto repair or medical bill can cause your frail budget to collapse. Thankfully, there are ways to turn your life around and hop off the paycheck to paycheck way of life.
There's No Quick Fix
Ending the lifestyle of living paycheck to paycheck takes time. In order to dispose of it, you'll need to have a full month of your monthly expenses in the bank. If you own a home and your mortgage is in good standing, you may be able to refinance the loan if you have equity or take out a personal loan with the home as collateral. However, if your credit is less than desirable, borrowing from a traditional lender will probably not provide positive results. The good news is that there are other lenders that provide installment loans for small amounts, so you can become current with your monthly household expenses.
Unfortunately, it's much easier to accumulate debt versus paying it off. If you have several loans and multiple maxed-out credit cards, climbing over the hurdle may seem like a task that's unachievable. However, if you take it one step at a time, you will slowly begin to dig out from under, reduce your debt, raise your credit score and start to pay less for everything.
With your credit cards, you can opt to pay the minimum on all but one of your credit cards and with the remaining one pay as much extra as you can. Once you pay off that card, you select another one and use the same process. When it comes to your car loans, try contacting the lender to see if you can put any past due payments on the end of the loan or have a reduced payment for a couple of months until you cover the past due money.
Creating a Budget
Ultimately, you have to figure out whether you need to bring in more money or spend less. A budget will reveal if you are making enough after taxes. Add up all combined net incomes and then deduct the cost of your household bills, loans, credit cards and other outstanding debt and additional expenses like gas, food and essentials and school. If you are still in the green, then you can cut back your expenses to free up money to help pay down your debt faster. However, if you're in the red, this means you're not making enough to cover your expenses and you either need to reduce them or make more money.
Ways to Bring in Extra Cash
Even if you make enough to cover your bills each month, you may decide to find ways to make more money so that you can eliminate the debt quickly. Having a yard sale, especially, if you have a good amount of high-quality items that people want, can yield a return of several hundred dollars. It also gives you a way to get rid of things you no longer need and free up valuable space.
Sometimes, you may even find items that are valuable, such as that brooch handed down from your great grandmother. You can also take on a part-time job working just a couple of days each week or work from home if that's more convenient. Either one should give you at least a hundred or so per week to help reduce the overwhelming debt.
The road to recovery may seem long and tedious. However, doing the work will make you think long and hard before you buy something without otherwise having the cash to pay for it. It will also teach you the importance of budgeting and going forward, allow you to enjoy a comfortable lifestyle.