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Learn how to get out of the paycheck cycle

STUCK- this is how you feel when you are stuck in the paycheck cycle. Everything seems reasonable until you pay your bills on time, manage three meals a day, and make a decent lifestyle, but one emergency and everything comes crashing down because you do not have anything saved to deal with emergencies. So, what do you think now? Is living on a paycheck to paycheck cycle a good thing? Well, we assume you know the answer. So, the question now is, how can you get out of the paycheck cycle?  

Yes, you can get out of the vicious paycheck cycle. Of course, you have to make extra efforts and control yourself more than you do, but it will slowly help you become financially secure.

Let’s see what all you can do to get out of the paycheck cycle: 

Budget with what you have, not what you will have 

Our problem is that we budget with our future income instead of what is currently available in our bank account, and this is where you overspend and lose control over your finances. Once you streamline your expenses with your available income, you will be able to control your money, make a precise budget, and reduce overspending based on your future income, which will eventually help you to get out of the paycheck cycle. 

Take care of the necessities first

It would be best to first take care of your necessities- food, clothes, shelter, and transportation. Even when you are budgeting, your first category should be necessities prioritize es. For example, you will be just fine without a new TV, but you can’t do without food! So, first, set your money aside for food, utilities, house rent, and transportation. Then list down all your expenses for the month and what you are spending and make a budget that meets your requirements.  

Cut expenses 

We are not asking you to cut off your necessary expenses- it should be your priority. When we talk about cutting costs, we mean unnecessary expenditures. Put all your monthly obligations in an excel sheet or a notebook, find which subscriptions are inessential, and cut them off. Get rid of cable TV or OTT subscriptions, magazines, apps, and more. For example, if you have a monthly Netflix subscription for four accounts that cost INR 799, subscribe for one account. If you cannot afford your apartment, you should move to a smaller place that will drastically reduce your expenses. 

Set goals and achieve them 

Nothing works without a goal; you need to have precise goals. You can start small, like setting aside some amount from your income for emergencies and grow your goals. This strategy will also work if you want to make a big purchase like a car, a new TV, or a new refrigerator. Setting goals will also keep you motivated to become financially secure. 

Pay off debts and avoid credit cards

Living on a paycheck comes with much stress, and debt is a significant part of that stress. So, the first step to getting out of the paycheck cycle is to pay off your debts. Make a debt pay-off strategy, which should also include your credit card pay bills. Another important thing is to control overspending. Avoid using your credit card as much as possible to reduce interest in your purchases. Instead, stick to cash or use money from your savings account to have a clear picture of your expenditure.  

These are the few things you can do to get out of the paycheck cycle and become financially independent. It helps you improve your financial health in the long run and become economically secure. But, unfortunately, living off the paycheck ultimately leads to the debt trap. So, it is essential to get out of the paycheck cycle to become financially independent and have a secure financial future. 

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