How to Stop Living Paycheck to Paycheck
A few months ago, I went on a podcast in London to talk about the really important topic of generational wealth.
I went on this podcast with a bunch of other good guys and the vibe in the room was amazing.
As we were talking about generational wealth, I had assumed others were fully advanced in terms of their financial journey.
This podcast episode had three presenters. One of them, in particular, was not saying very much for about 10 minutes into the episode.
We were just laughing, sharing jokes, and talking so many things including money and business.
Then about 15 minutes into the podcast, he just said:
“Everybody, just stop for a minute! Everything you're saying is just going over my head.
I've got something to mention to you guys. I am completely broke!”
At this stage of the podcast, everybody's completely thrown because the last person you expect to be saying they're broke is the co-presenter of the podcast.
But this guy, who I have eternal respect for, admitted that he's actually broke. Basically dropped this bombshell!
So this really drove the entire conversation on this podcast episode and a really interesting conversation came out of it, which has led me to create this blog post.
Today, I'm going to share with you what I think you should do if you are somebody who is broke and living paycheck to paycheck today.
This is especially important at this time when we're all going through a challenging economic decline.
I'll share with you what I would do in your shoes.
As someone who's actually been broke myself, having immigrated to the UK with nothing at all.
I'll give you the practical hacks that I think you should be acting on today.
It's important to feel at home talking about this topic because the vast majority of people out there will not admit to living paycheck to paycheck.
So, what do I even mean when I talk about being broke?
I see two types of broke-ness as it were…
Type 1 – You Possess Absolutely Nothing
The first type is that you've got absolutely nothing.
So you're either a student who has never worked, therefore doesn't have anything but potentially student loan debt.
Or you as somebody who had some wealth, but you've now lost everything completely.
Perhaps you are someone who is like me, who had immigrated to a new country but immigrated fairly poorly.
When we immigrated to the UK, we had absolutely no rights to anything.
i.e. no rights to go and get a job, to the health service, to claim benefits, etc.
Basically, no rights to things that the average person on the streets who is broke already has to their advantage.
Type 2 – You're Living Paycheck to Paycheck
The second type of brokenness, which is the modern broke-ness is living paycheck to paycheck.
This is where the vast majority of people are today.
People work, they make some money, they pay expenses and pay down debt.
This carries on in a revolving cycle of living in exactly the same place.
They never see their money each month and struggle to have any savings.
As such, no buffer in existence in case stuff happens. The lack of such a buffer leads to frustration when things do inevitably happen.
So the ideas I'm going to share today will be beneficial.
If you are in Type 1 broke-ness or Type 2 broke-ness, you can start to apply these ideas, so that you can break away from Brokeland.
Living in Brokeland can be very depressing and frustrating, but it's a place you can get out of.
So let's dive in now and start to look at these practical ideas to help you stop living paycheck to paycheck.
HOW TO STOP LIVING PAYCHECK TO PAYCHECK
Below are 8 ways to stop living paycheck to paycheck that you can apply from today:
So the first idea is that I would start doing freelancing.
Freelancing essentially means that you are using some existing skillsets to try to make some extra money.
The way I would do this, and this applies specifically to somebody who is living paycheck to paycheck, is that I would do a skills audit.
I'd review my life.
Sit down with my a cup of tea and literally ask myself,
- what are the technical skills I possess?
- And what are the soft skills I possess?
Technical skills might be skills that are in demand that people are looking for. Skills that you can potentially apply to a new environment.
Soft skills include communication skills, ability to negotiate, ability to manage your time, ability to solve problems, etc.
What you're really aiming for here is to create a possible roster of skills that you possess, and then try to match those skills to a different marketplace.
The beauty of freelancing is that you can use the extra time that you have on the side to make some extra money.
Today's technology and lots of platforms mean that we can start to use our skills in this way and seek out opportunities.
You can get work from companies in various parts of the world in order for you to generate some extra income.
Check out Upwork for more information.
2. Learn Digital Skills
The second thing I would do is to learn digital skills.
I look at digital skills as the skills you need for freedom.
When I think about my journey personally, I think about when I struggled and I couldn't go to a jobcentre to get a job because I just didn't have the right to do that.
And back then there was no internet.
I couldn't learn any additional skills online or anything like that. Life felt really restricted by so many things.
Such things as the fact that I didn't have the right to do ordinary things.
The fact that I'm black and an immigrant and I couldn't even communicate English properly.
Some of the things I felt really held me back. My mindset was far from where it is now.
But today, you know, when I reflect on that, it does get me really emotional.
The arrival of the internet really provides us with an abundance of opportunities if you can start to see it as a reality in your life.
For example, the fact that I get paid from YouTube videos and from starting a blog is proof to you that it's possible.
These are good places to begin to acquire digital skills.
It leads you to gain the ability to use the internet as a net producer of value.
There are so many different skill sets that you can learn online which means that you can create a level of independence from your current employer.
Examples of mine include the ability to:
- Create blog content in an engaging way,
- Make videos that can be marketed on a variety of platforms, including YouTube,
- Create eBooks and low ticket digital products,
- Make online courses that are sold on various platforms,
- Start membership offerings,
- Bundle digital products for multiple sales,
- Create offers and negotiate with brands for content integrations,
- Market affiliate products for commissions,
- Understand and use advertising across different platforms,
- Use a variety of technologies and bring them together to create online businesses,
- Fully understand social media as a way to drive traffic,
- Figure out how to use SEO to drive traffic from Google,
These skills (learned over the last 2 years) give me unbelievable options that many people out there in the world do not have.
Skills that you too can learn if you have internet access.
It's the kind of skillset that really gives you that freedom, not to worry about your gender, skin colour, or whatever it is you feel is holding you back.
You can also use these digital skills anywhere in the world.
For example, I have created content and generated income whilst in various cities (such as Paris, Lagos, Gros Islet, Rome, Dubrovnik, Zanzibar, Venice, Rhodes, etc) around the world 😀.
To get learning, I'd highly recommend various things. Check out our very popular free blogging course.
Anyone I know who's been through that free course has come back to me and said something like, “Ken, I cannot believe you've created this as a free course.”
Feel free to check it out.
It's my gift to people out there who are looking to free themselves and learn a skill set that they can use to create some level of independence.
I would recommend blogging because of the transferrable skills that can be applied to so many different things.
For example, I apply the same skills to creating content on YouTube.
It's delivered via email over 7 days with lots of action points and step by step instructions for what you need to do to start to make this real in your life.
3. Figure Out Your Broke Number
What do I mean here exactly?
Remember I mentioned the guy earlier who revealed to us that he was broke?
The biggest challenge with breaking free from being broke or becoming broke free is that people do not admit that they actually broke.
And what that then creates is a life where you are living in a circular fashion.
You remain ever broke and that's not what we want.
So to become broke free, I highly recommend working out what your broke free number is.
And by that, I mean, figuring out what's something that moves you along a little bit on the money journey.
Cause being broke is a part of the money journey.
Check out our video on the eight stages of financial independence and freedom to understand what I mean by the money journey and to break free from being broke.
What you really need to do is create a buffer, such that you have savings of about 3 to 6 months of your expenses.
This then moves you from the stage of financial solvency on the money journey to a stage of some financial stability.
That's what you want to create.
Sit down, make yourself a cup of tea and ask yourself
- What is my broke free number?
- And what is 3 – 6 months of my expenses that I need to save up?
What that does is it then gives you a goal, an aim, having an aim gives you optimism because you have something you're aiming for.
You're almost plotting your escape from Brokeland.
4. Study Others and Copy Them
The next tip I'd offer is to study others and copy what they're doing.
I don't mean copy them exactly, but I will explain what I mean here.
Let's use my journey as an example.
I've told you that I've been broke once in my life or twice actually.
Firstly, when I immigrated I was completely broke for years. Secondly, when I thought I was starting to catch up with the average person, I then started to live like everybody else and take on debt.
And then I fell into broke-ness number two and started living paycheck to paycheck.
So I've seen both angles of being broke. But today I can tell a different story.
If I was in your shoes, what I'd be doing is trying to copy me basically.
To be more specific about this, I would ask two questions.
Question 1 – What are the ingredients in what this person is doing?
So you studied them and figure out what the ingredients are in what they're doing.
Question 2 – How can I create a different recipe?
How can I bring my own flavour into what this person's doing, such that I'm using the raw materials, the ingredients, and I'm creating something unique.
Notice the key words there – Ingredients. Create. Recipe.
What you doing is taking an idea that has been tried and tested, using it to free yourself and create a buffer you need.
Check out a video we made recently called our 12 income streams.
We made it because, in this country, people don't typically talk about how they make money.
I've found that when somebody shares with me how to do something, I learned from it a lot quicker.
And I believe that it can be done.
So I'm sharing so that you can believe that it can be done.
Check out that video and try and ask yourself,
- What can you model from this?
- What are the ingredients?
- And how can I create my own recipe for success?
Success always leaves clues.
5. Take Radical Action
The next tip I offer here is to take radical action.
So radical action is what separates the people who are all words and just talk, to the people who are the doers, who actually get things done.
What I really mean here by taking radical action is to use one of our key principles to look at:
- What do I have in my hands by that?
- Resources do I have around me?
- Networks do I have?
- Relationships I have?
- What could I use to help me to solve my problem of being broke?
A very simple example of this is – do you have parents?
If you're currently broke and struggling, could you swallow your pride and move back to your parents‘ house for six months?
Whilst you divert those expenses that you're making into building up a buffer of about three to six months.
Could you do that? Because that is an option that's available to you potentially because it's something that you might have in your hands.
Could you potentially use a car that you have to become an Uber driver?
And could you swallow your pride and get out there and change your own destiny?
Could you become the person who goes and works at this supermarket at the checkout?
And could you swallow your pride and look beyond what other people might think about you and work on the checkout, make that extra income to create your own freedom away from Brokeland?
So you can see these are ideas that are radical, simplistic, but radical.
If you stopped worrying about other people and you activate that level of action in your life, you will no doubt find yourself breaking away from that cycle of living paycheck to paycheck.
6. Embrace Budgeting
The next idea is to embrace budgeting.
I made a video recently called How to Budget Consistently because consistency is the number one problem that most people have with budgets.
In the video, I share a lot of nuggets around the mindset for budgeting and why it's critical.
Budgeting will become the tool of choice in your toolbox to help you start to create that freedom from Brokeland.
Now, the number one reason why most people are broke is the inability to manage cash flow.
i.e. the inflow and outflow of cash in your life.
And the inability to manage that cash flow is the number one reason why even very wealthy footballers on the surface are technically broke.
It's a big reason why many people live paycheck to paycheck.
Budgeting as a tool is what will help you manage the distribution of your income to managing your expenses, servicing your debt, and so on.
But for budgeting to work, you have to embrace it and let it become your tool of choice.
Feel free to check out our simplistic tool called The Budget For Life
7. Look After Your Wellbeing
The next tip I'm going to offer you is really, really important, which is to look after your wellbeing.
So being broke leads to a lot of people, living very lonely lives, and living a lonely life leads to a lot of people living in depression.
Depression is a soul-destroying thing to happen to anyone.
I'm proof that this can change for you.
I hope over the course of many blog posts and YouTube videos, I can start to really unpack the journey I've been on.
So that you can not just look at me and say, “Oh, it's easy for you to say you're financial independence.”
No! I've been on an incredible life journey.
I hope as I share these various nuggets with you, as you hear my voice you can start to believe that breaking free from being broke and working towards financial independence one day can become a reality because I've done it.
So I believe that you can do it as well.
I'm now going to offer you some practical tips for how I think you can start to look after your wellbeing as you work towards breaking free from living paycheck to paycheck.
Speak to Others
The first one is to talk and have conversations.
This is so important. So don't live a lonely life living in shame, fear, or frustration, speak to people about it, find somebody who you trust.
Just have a conversation and open up to them.
I find that a conversation is usually the beginnings of taking the next best step in our lives.
Have that conversation and what you actually do by having a conversation with somebody you trust is that you in effect make them, your accountability partner.
I'd highly recommend starting a conversation being open because it helps you face the reality of your current situation.
Journal For Gratitude
The next thing I'd recommend for your wellbeing is to journal.
Now, thankfully, this is something that's becoming a lot more mainstream.
I do journaling all the time on my iPad using an app called Notability.
You can look this up on the Apple store.
Paper and pen is also another option.
One question I ask myself every single day is what are three things that I'm grateful for?
It brings gratitude to the fore, which is the antidote for optimism.
If you want to have more of an optimistic life, even in the darkness of being broke, write down what you're grateful for.
Every day that just builds you up internally and gives you hope that you can one day live a different life to the one that you're currently living at the moment.
Go For Walks Or Runs
The third idea for your wellbeing is to walk or run whichever you prefer it.
Every single day, I go out for a 30 to 45 minutes walk. I do it to clear my mind, to generate some new ideas, and to stay grateful.
All these things have helped me, really look forward to the next day and look forward to successes in the things that I'm working towards.
It helps me become more of a rounded individual even in the face of many challenges or blessings that I enjoy in my life.
This is worth doing especially as it doesn't cost you any money to do it.
And it really helps you to change your environment whilst you're doing it as well.
8. Volunteer for Opportunites or Key Relationships
The final point is to volunteer at a place that you think has the potential for you to generate a possible opportunity or to build a key relationship.
This particular point is important right now as many people are going from being furloughed to being made redundant.
You can volunteer for all kinds of reasons too.
I've known someone whose main issue with being broke was being able to make sure she could find some food for herself and her family.
What she did was to volunteer at a farm and at garden centres.
By doing that, she was able to plant various crops and things that were able to provide her with some food.
The places she volunteered allowed her to take some of the produce to help her provide food for herself.
As another example, let's assume you're not earning enough in your current job or looking for a new opportunity.
I would highly recommend approaching employers that you might be interested in working for, and maybe suggesting that you volunteered for them.
Become the tea person and get the biscuits, answer the phones, whatever it is required.
This can potentially lead you towards building the right relationships in an organisation, which can lead to perhaps finding the right job that you're looking for.
This example would also be perfect for a student, who's never worked, but looking for your first kind of foot in the door.
But a key idea here about volunteering is being creative and looking around you for potential opportunities, things that are slightly unusual.
You can then apply your time and gradually out of that will come something that will help you work towards escaping your current situation.
Admitting that you're currently living paycheck to paycheck is the beginning of trying to break free from it.
It is a difficult place to be in, but staying positive and taking action whilst creative, will keep you ahead in trying to change your current circumstances.
I'd love to engage with you in the comments below.
Feel free to share your situation and I can help you with more personalised thoughts on your current challenges.
What To Explore Next>>
- Join our Community of Dream Makers at Financial Joy Academy
- The podcast episode I mentioned at Dope Black Dads
- How To Manage Your Finances & Thrive During a Crisis
- 5 Top Money Mistakes To Avoid In Your 20s & 30s (and adulting)
What To Watch Next>>
Have you been wondering how to stop living paycheck to paycheck? What has been your biggest challenge with breaking away from that cycle? Please share your personal circumstances.
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.
This is what I needed to read today. Thank you!
The Humble Penny says
You’re most welcome! :). What are you finding most challenging right now financially?