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Living Paycheck To Paycheck Is Canceled! (7 Steps)

7 Steps To Break The Paycheck To Paycheck Cycle

78% of the population lives paycheck to paycheck regardless of how small or how large the paycheck AND would have a hard time dealing with a $400-$1000 emergency. 

Even 33% of NBA players (150 of 450) NBA players live paycheck to paycheck!

Today, I want to talk about 7 very specific things you can do to "cancel" this cycle AND actually get to a place where you don’t ever have to worry about money again.

 

Here are the 7 steps in brief:

  1. Decide that you "hate it".
  2. Make a list of all of your bills, expenses and debts.
  3. Use that list to build a budget.
  4. Commit to tracking every single penny of expenses.
  5. Save a $1000 baby emergency fund.
  6. Get a month ahead on your bills.
  7. List your debts smallest to largest and start paying them off in that order (The Debt Snowball).  

 

Okay, let’s get into it...

Hey friend, I’m Brad Long here with ZeroDebtCoach where we help 5 and 6 figure corporate employees and entrepreneurs escape the corporate cult by helping them: 1) organize and optimize their financial lives, 2) eliminate debt and 3) accelerate toward financial independence by starting and growing an online business.

 

8 Out Of 10 Live Paycheck To Paycheck

So think about that for a minute. That means that 8 out of 10 people that we interact with on a daily basis would have a serious problem if they had any kind of interruption in their income.

So if that’s you, I can relate. I’ve been there. I paid off over $43k of consumer debt in 2.5 years using what I’m going to teach you in this video/post. 

 

 
 If you want the printable pdf guide of this list, click here or on the image above.

 

1. Decide that you hate debt and being behind on your bills.

Now this is a mindset shift more than anything and if you hang around my platform for any amount of time, you’ll know that I’m constantly reinforcing that mindset, while it may feel like “fluff” at first is actually the most important piece of this escaping the P2P puzzle. 

 How can you ever expect to change your behaviors toward money if you’re not willing to first change your mind about it? 

And I can promise you that learning how to HATE your P2P situation is 100% required if you ever want to change your circumstances.

 

2. Make a list of all your bills, expenses and debts.

This is the ALL IMPORTANT pre-budgeting step that most people skip and that’s a fatal mistake. The next two steps can feel overwhelming for most people, so it’s important that we break this process into a very small bite-sized piece to get you a quick win and help make sure you don’t get overwhelmed and walk away.

 

3. Use that list to build a budget.

Ah, the dreaded “b” word…  

I can’t stress enough how important it is to get on and stay on a budget. A budget is nothing more than a plan for your money, where you're giving every single unit of currency a name and a job to do. I’ve got links to two free workshops you can use to get you started in the video description box below. 

And, just for some context, EVERY SINGLE ONE of our financial coaching students over the years has said the exact same thing: “Without a solid monthly budget, I never would have been able to: 1) get control of my money, 2) escape the paycheck to paycheck cycle and 3) eliminate all our debt. 

This is an absolute non-negotiable and I can promise you that when you start doing it, you’ll feel like you got a raise, even if you didn’t!

 

4. Commit to tracking every single penny of expenses. 

This is also pivotal (I know I’m starting to sound like a broken record, but believe me when I say that it’s ALL true). Most of what’s gotten you into the mess you’re in is not being aware of what’s “going out the door” every month. 

Most (not all) of our students earn enough money to actually get out of this paycheck to paycheck cycle, they just don’t have any awareness of their spending.

In order to reign that in, master your budgeting process and ultimately escape this cycle, you MUST start using one or all of the following:

  • Saving receipts (to then reconcile with your budget).
  • Writing down every expense in a journal  to then reconcile with your budget).
  • Using the cash envelope system  (to then reconcile with your budget).

If you want to win with this process, you HAVE TO start doing this. Otherwise, I’m totally just infotaining you right now. :)

 

5. Save $1000 as a baby emergency fund.   

Why $1000? We need to start building a buffer in your finances. This buffer will: 

Keep you away from using credit cards for “emergencies” or comfort purchases.

Strengthen the skills and awareness you’re building in your budgeting and expense tracking.

Start to build a cash buffer in  your budget so that you can  get a month ahead on your bills.

How do you do it? There are 3 simple strategies: 

  1. Sell some stuff.
  2. Cut/Reduce/Substitute expenses.
  3. Get extra work.

 

6. Get a month ahead on your bills. 

Getting out of the paycheck to paycheck to paycheck cycle is going to require a season of extreme hustle. Now, if you’ve followed me for any amount of time, I’m not a fan of “hustle” culture or really “working all the time” or “workaholism” culture. But I do recognize that this process will likely require perhaps an extended period of time where some serious hustle is required. I just want you to know I’m not advocating that as a long-term lifestyle, rather as a short-to-midterm means to break this p2p cycle.

This is just a continuation of step 5. As you can see, we’re building momentum as we progress through each of these steps. Each one lends strong to the next. It’s amazing once you’re in the process and getting traction.

Getting a month ahead on your bills is where you’ll REALLY start to get a taste of what it’s like to have more control over your financial life (can you imagine it, being a month ahead?). Depending on your level of income, this could be pretty challenging, but I promise you it’s a challenge worth accepting.

Just stay in the process of budgeting, tracking expenses, selling stuff, reducing expenses and getting extra work and this beautiful cycle will bear much fruit for you.

 

7. List your debts smallest to largest and start paying them off in that order (The Debt Snowball).  

This is known as the debt snowball and I LOVE it! 

This is where you REALLY start to get traction and momentum. Once you have at least $1000 as an emergency fund and perhaps are a month ahead on your bills, this is where you can really start to make a dent in your debt.

So, you list your debts, smallest to largest by total amount due, ignoring the interest rate.

“But why regardless of interest rate”, you ask.

Because remember, this process is ALL about behavior modification and LESS about the actual math.

There is scientific evidence that people who use the debt snowball method actually eliminate their debt and do it faster than people who use other methods. Here’s a post I wrote telling you everything you need to know about the debt snowball.

 

 
Again, if you want the printable pdf guide of this list, click here or on the image above.

  

Struggling Or Feeling Alone?

Join Our Private FB Group: Zero Debt Tribe

Now, if this decision process is something you struggle with and you constantly feel isolated about, I’ve got some great news for you and it’s free.

Our private Facebook group, ZeroDebtTribe. It’s a group of like minded people that are all somewhere along this P2P/debt-elimination/on their way to FI continuum. So click the image above and apply to join us. :)

 

Call To Action 

So, we’re all about taking action around here, so I wanted to offer you this free little resource that will help you get your finances organized an on track in less than 4 hours. It’s called our “Debt-Elimination Quick-Start Guide”.

Looking for a way to get started on your own debt-free journey? Check out my: 

 “Debt-Elimination Quick-Start Guide”. This free resource will have ALL the tools, forms and printables you’ll need while moving through this 30 day challenge.

 

  

How can ZeroDebtCoach help you? 4 ways...

 

1. Subscribe to our YouTube channel and click the notifications bell to make sure you get our new videos every week. 

 

2. Download one of our free personal finance guides. You’ll learn some of the exact strategies I teach my private coaching students on how to organize and optimize their finances, obliterate debt and move on to financial independence by starting and growing online businesses.

 

3. If you’re looking for a community of motivated and like-minded people, go ahead and get on the waitlist to join our private financial coaching community. We only open it for new students a couple of times a year, so make sure to get on the waitlist.

 

 

5. If you need some help right now because you’ve got a burning issue, you need a problem solved, you want to talk through a complex situation, click on the button below.

 

 

All that said, let's keep on building your financial acumen and make this your best year yet!

Thanks so much for reading and we’ll see you in the next video post!

 

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