Reasons You are Living Paycheck to Paycheck

A life where you don’t need to live paycheck to paycheck seems like an unattainable dream - but it’s really not. Most of us have convinced ourselves that our monthly expenses are just too high or that our income is simply not enough. However, the unpleasant truth that we don’t like to accept is that all too often, it is our poor lifestyle choices and financial habits that plunge us into this desolate way of living where you spend your entire paycheck up to the last cent leaving you counting down the minutes until your salary gets deposited. We can all agree that this is not an ideal way of managing your money. In order to break out of this cycle, you first need to identify the reasons as to why you are living paycheck to paycheck.

Only making minimum payments on your debt

Living without some form of debt is next to impossible in this day and age; everyone’s got a credit card and no one can even hope to purchase a home or a vehicle without a loan or lease. But a trick used by these lending companies is to get you to focus on making your minimum payments regularly and tacking on more and more interest on the bulk of the debt. This means you will find it extremely difficult to become totally debt-free, leaving you having a chunk of your paycheck getting deducted for loan repayments as soon as your salary hits your bank account. If your monthly salary is Rs. 100,000, if you are paying Rs. 25,000 or more each month on loan repayments, you’ve really got far less money to spend on your living expenses. When making purchases on credit, think long and hard about the consequences of your action - there really is more to it than simply swiping your credit card. Selecting a good lending company is also of paramount importance; while trustworthy lenders like display their repayment terms and conditions clearly, not every lender does this.

Trying to keep up appearances for the ‘gram

If you feel your expenses are just too high to have any hope of ever not living paycheck to paycheck, it’s time to take a good look at how you are spending your money. If you are more concerned about keeping up appearances just for the sake of showing off, you might be right - you will never be able to enjoy financial freedom. Not everything you do needs to measure up to what you see and what you can post on Instagram. Do you really need to upgrade to the latest iPhone when your current one works just fine? Do you need to buy a new outfit for every single outing? Do you need to buy luxury brands when ordinary brands work just fine? Think about why you opt to pay more for certain things and see if you can save a bunch of money by downgrading, leaving you with enough cash to not worry too much about your next paycheck.

Not knowing where your money goes

Not knowing where your money goes

There are too many people who run out of money well before payday and are simply flabbergasted because they feel that they haven’t done anything with their money for it to have run out so quickly. These are the same people who don’t check their bank account transactions on a regular basis or leave cash lying around in various places. If you are not tracking your daily expenses, finding out that you have far less money than you thought will not only be a rude shock someday, but an inevitable one. It is absolutely crucial for you to not only keep records of how you spend your money but also go over your bank account statements to identify any suspicious transactions. You might find that that subscription that you thought you cancelled a few months ago is still ongoing or that you have been double-billed by mistake. By knowing exactly where your money goes, you can prevent leaks which accumulate and end up being tens of thousands of rupees.

Poor planning

Poor financial planning is one of the biggest culprits whenever you look at people struggling to make ends meet or who are drowning in debt. You should always have a clear plan of how you allocate your money even before you get your paycheck and stick to your plan once your salary is deposited. A smart and strong budget will not only stretch your entire paycheck well over a month, it might even help you save up some cash for a rainy day so that an unexpected emergency doesn’t collapse your entire financial framework. Allocate money towards your fixed expenses (bills, transport, loan repayments, savings etc.), and set a weekly budget for yourself that you will not exceed. It might take a while to figure out just how much money you need to allocate towards certain areas but with a bit of trial and error (and a lot of self-control), you might be able to avoid financial despair.

Not making enough money

Finally, no amount of financial planning, budgeting and cost-cutting will save you if you are really not making enough money. If your income simply does not cover the most basic of living costs, it’s imperative that you seek ways to not only reduce expenses but also increase your income. Moving to a better paying job is not always easy to do due to a plethora of unique circumstances, but there are ways to supplement your income through other means.

Freelancing / Part-time work

If you have free time after your day job and possess skills of any kind, try to put these to good use by taking on some side projects. You can usually find opportunities on social media and through networking. There’s good money to be made doing various things, not necessarily just professional work.

  • Tutoring
  • Copywriting
  • Cooking
  • Arts & Crafts
  • Data Entry



If you don’t have time to spare in working on side projects, by putting a bit of time and effort towards building up an investment fund and exploring some investment opportunities will go a long way in supplementing your salary. If you are able to invest your money in some solid ventures, you can earn extra money without having to slave away at a desk job well into the night.

The paycheck-to-paycheck lifestyle is exceedingly hard to break out of as it has a lot to do with our mindsets as well. With a bit of exceptional discipline and self-control, even you can live a financially-carefree life without cutting corners in an extreme way. Finding that middle ground is the goal of true financial freedom.