How To Stop Living from Paycheck to Paycheck: How I Broke The Cycle On A Low Income

How to stop living from paycheck to paycheck

Written by Agatha

August 27, 2020

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My life is like a hamster on a wheel. 

Between 5th and 26th of every month, I receive numerous phone calls and messages from debt collectors, friends and family included, demanding that I pay back what I owe. 

A few days to pay day, I’m usually ecstatic because the money is on its way. I’m full of anticipation for my fat bank account. 

2 or 3 days after I get paid, I find myself with zero money. One cause is that I prioritize paying debts to the people who stressed and threatened me within the month. Then I look for a different mobile app or person to borrow from because I still have to pay my bills. And the cycle continues…

This cycle is accompanied by feelings of failure; stress has become my daily companion.I don’t fully understand how I got here yet I know I earn a substantial amount.

That’s my client’s description of her relationship with money. She’s been living paycheck to paycheck for 8 years.

She has no tangible assets to show for her 8 years in the workforce. All she has is massive debts, confusion and stress.  

Does this sound like you?

Does thinking about your finances make you clench your jaw, walk around with stiff shoulders and unrelenting headaches? 

Have you been living from paycheck to paycheck?

“Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.” – Morgan Housel

What does living paycheck to paycheck mean?

If you’re a visual learner, watch the video on our YouTube Channel:

Living from paycheck to paycheck means using all your monthly income to cover your expenses, including debts, leaving no money for savings or investments. It’s a reality for a lot of people who do not have a financial plan or financial awareness

The other side of this story is that a lot of people think it’s okay to live this way. Living from paycheck to paycheck is also not a lifestyle reserved for low-income earners. It cuts across the board as a lot of people don’t know that getting paid is one thing and keeping the money is another. 


How I broke the cycle of living paycheck to paycheck

If I heard my client’s story in 2017 or 2018, I’d have responded with a loud ‘me too mahn, me too!’ 

I’ve been there, deep in the mud. For some of these financial situations, ‘until you’ve lived through it and personally felt its terrifying consequences, you may not understand it enough.’ 

My days of living paycheck to paycheck were also accompanied by debt. As soon as I got paid, the first thing I did was to pay some of my personal loans. I didn’t have a financial plan, didn’t have a budget, and didn’t have a deliberate plan to improve my finances in future. 

Everything I did with my money was directed by extreme emotions such as panic and shame.

The last few days of the month before the paycheck lands were marked with surviving on tea, bread and bananas as I tried to stretch the last few dollars I had. 

My first step out of this mess was taking responsibility. The second step was to get out of debt. I shared all my best hacks here.

“To grasp why people bury themselves in debt you don’t need to study interest rates; you need to study the history of greed, insecurity, and optimism.” – Morgan Housel

11 ways to stop living paycheck to paycheck


1. Get a clear picture of exactly where you stand financially

The first step is to own your mess. 

I did this by creating an excel sheet with a list of my debts. I then arranged these debts from the smallest to the biggest which is a debt payment method commonly referred to as the debt snowball. I named this spreadsheet ‘My Financial Responsibilities.’ 

Do the same so that you have a visual guide on which debt to tackle first. 

Another perfect way to get a clear picture of your finances is through calculating your net worth. Your assets minus your liabilities = your net worth. 

Yes, net worth calculation is not reserved for Warren Buffet and the likes. We all have and use money, whichever the amount, which makes you responsible for yours. 

Knowing if you have a positive or negative net worth will inform your next financial decision. I wrote a simple guide on how to calculate your net worth here.


2. Stop spending on anything that is not a need.

You are living from paycheck to paycheck because the gap between how much you earn and how much you spend is worlds apart. You’re living beyond your means. You need to close that gap.

I recently learnt something that shook me to the core. Consumerism is the biggest religion. Read that again. Buy now pay later, discount cards, free credit cards are the new normal.

The world we live in is set up in a way that makes it almost impossible to stop buying stuff. There are ads everywhere, and by now we know that our phones are listening which is why we always get ads of stuff we talk about. We’re bombarded with buy now pay later traps, discount cards that get you impulse buying, free for life credit cards…

To move from living from paycheck to paycheck, you need to scale down your purchases to the basic items you need to survive: housing, food, transportation and utilities.

Any money that is left after covering your basic needs should go towards building a 6 months emergency fund and paying off debt. 

From the debt list created in step 1 above, start with paying the smallest debt as it gives you a sense  of progress and achievement. Ideally, you could also start with the most expensive one (one with the highest interest rate) to avoid losing more money. If you have a credit card, that should be the first debt to get rid of.

If you’re addicted to buying rubbish, I wrote two guides to help you get unstuck: 

Minimalism: A guide to spending less.

How to stop spending money (14 best hacks)


3. Budget and record all your expenditures

A friend of mine who has trouble sticking to his budget and controlling his expenditures gave up on my ‘record all your expenditures’ advice after two days of trying. I wasn’t surprised. 

Recording your all expenditures is not easy, especially if your life is set up in a way that you have to pay for stuff in cash. Recording less that $1 dollar purchases on the go feels can get annoying pretty quickly. 

One of the reasons that I’ve been successful with recording all my purchases as they happen is because I pay for everything using either my credit or debit card. At the end of each day, I simply use the text messages from the bank to record my expenditures. Since I do my grocery shopping and house supplies on a weekly and sometimes monthly basis, I don’t have a lot to record at the end of the day. 

Having said that, I understand why he found it cumbersome and gave up. But here’s the harsh truth; him giving up means going back to having no control over his money. Going back to wondering ‘where did my money go?’ every end month. Going back to not knowing whether he’s making progress financially or not. 

I don’t know about you but I don’t want to be that person. Being in control of your money is not easy, which is why so many are in debt and are living paycheck to paycheck. You have to be ready to do the work, to take care of the nitty gritties. 

I use the Toshl app to record and track my expenditure. Since I’m committed to seeing you thrive and teaching you all my hacks, the next article will be a step by step process (with photos!) on how I do it. 

What about creating a budget that actually works? I got you!

Budget Tracker


Grab your Customizable Budget Tracker here

4. Break the culture of silence and shame.

Did you know it’s easier for somebody to tell you they have a sexually transmitted infection than for them to talk about money? 

Think about it. How many people have shared with you deep secrets about their lives but have never talked to you about debt? 

Would you openly talk about your financial woes? Would you share your dumb money moves without being consumed by shame?

The culture of silence when it comes to money keeps us stuck. Keeps us stuck in a loop of shame and blaming ourselves. Yes, you could have done better but you didn’t know better. It’s time you replaced ‘I am a bad person for not sticking to my budget’ with ‘I did something wrong by not sticking to my budget.’ 

Shaming people out of bad behaviour doesn’t work. Brene Brown, who has done more than a decade of research on vulnerability, courage, shame and worthiness, proved that shaming people is not a very effective way of encouraging change of behaviour. This also applies to poor financial decisions.

“Shame isn’t a motivator of positive change. Yes, it can be used in the short term to change a behavior, but it’s like hitting a plastic thumbtack with a 100-pound anvil — there are consequences to the crushing.” Brene Brown

I’m proud of my financial journey so far because I can easily talk about my money mistakes and all other aspects of my finances without shame.  I shared my dumb money moves here.

I have helped a lot of people with overcoming the shame associated with talking about money. If you’re struggling and would love to experience progress in your finances, I can be your accountability partner. Reach out:


5. Build an emergency fund

You need to save money to act as a buffer in case of emergencies to prevent you from using your credit card or taking up any more loans.

Building an emergency fund is the only way to prevent you from sliding right back into the living paycheck to paycheck lifestyle.

I wrote an easy step by step guide on how to build one here.


6. Make more money

I do understand that this is easier said than done. That most of the articles and videos on the internet on how to build a passive income prove to be useless or impractical as soon as you start reading them. 

Listen, there’s only so much you can cut back on as you work towards going back to living below your means. Which is why you shouldn’t give up on the idea of creating passive income through side hustles

I’ll teach you 2 ways that I have proved works. Which is something that you’re already familiar with.


A. Consultancy

I have spent years studying personal finance books. My 9 to 5 job is a project and property management officer at an investment company. I am  very disciplined with my money. I stick to my budget 90% of the time (yes, budgets are meant to be flexible) and I grow my nest every month by saving and investing. This makes me knowledgeable about personal finance and investing than the average person. 

How did I turn that experience into a side hustle? 

  • I write personal finance articles, which proves to you and thousands of my readers that I know what I’m talking about.
  • People who read these articles would ask me questions about personal finance and investing. 
  • Should I keep dishing free advice? Naah. People don’t take free advice seriously. And when it comes to their finances, they don’t act on it. 

That’s how I became a personal finance consultant. I help people make sense of their money at a fee.

It’s your turn. What are you good at? What is one thing that you’re so good at that you can actually charge? What’s that area of expertise that people keep asking you for free advice on? Identify it and charge for it. 


B. Blogging

As I’ve always preached on this blog, for most of us, it’s impossible to build wealth by selling our time for money (which is what you do at your 9 – 5 job). You need to find ways to make money while you sleep through side hustles & investing consistently.

By consistently publishing content on this blog, I started making money in 3 ways:

  • Ads. 

Google pays me for placing ads on this blog. 


  • Affiliate marketing. 

Affiliate marketing is the process by which you earn a commission by selling other people’s products or services.  For example, when I recommend the best books on Amazon, I earn a commission. This happens automatically, day or night!

I learnt how to create a successful blog that makes consistent passive income (earning money while I sleep) by investing in the Launch Your Blog Biz online course by professional bloggers Lauren & Alex from Create & Go who make over $10,000 per month from their two blogs.

If you have always wanted to learn how to create and grow a successful blog without being a tech guru or a pro writer that makes over $1,000 per month, sign up for their course.


7. Visualize how your life would be if you stopped living from paycheck to paycheck

A lot of adults are so busy being busy that they do not take time to visualize how different their lives would be if they worked on key areas of their lives. Like your finances

Seriously, take time to visualize how different your life would be if you achieved your financial goals and desires, how your life would be if you had some money left over every month to save, invest or explore a different aspect of life. Those vision boards that we keep being asked to make are useful. 

Deliberately reminding yourself that a better quality of life is possible is enough motivation to start changing your relationship with money.

8. Automate savings

Pay yourself, love your future self through saving and investing. Richard H. Thaler & Cass R. Sunstein’s book Nudge explains why automating your savings is mandatory.

“One of the causes of status quo bias is a lack of attention. Many people adopt what we call ‘yeah, whatever’ heuristic. A good illustration is the carryover effect in television viewing. Networks executives spend a lot of time working on scheduling because they know that a viewer who starts the evening on NBC tends to stay there. Since remote controls have been pervasive in this country for decades, the actual ‘switching’ costs in this context are literally one thumb press. But when one show ends and the next comes on, a surprisingly high number of viewers (implicitly) say, ‘yeah, whatever’ and keep watching. This also happens in automatic magazine subscriptions.

Those who are in charge of circulation know that when renewal is automatic, and when people have to make a call to cancel, the likelihood of renewal is much higher than it is when people have to indicate that they actually want to continue to receive the magazine.

The combination of loss aversion with mindless choosing implies that if an option is designated as ‘default,’ it will attract a larger market share. Default options thus act as powerful nudges.”

How do you automate your finances? 4 Genius ways to automate your finances is your plug!


9. The quality of your inner circle matters

Do you have friends who become resentful, or feel threatened when you assert your financial priorities?  Do you have friends who become insensitive when you say can’t afford something?

Our close friends and family are often our biggest source of financial pressure which could lead to financial decisions that got you to the living paycheck to paycheck nightmare.

Keep refining your inner circle. Work towards having a support system that pushes you towards financial growth. Prosper together.

10. Audit finances on a monthly basis

If you’re going to succeed financially, you need to be hands-on about your finances. That means doing an audit of your finances regularly to be sure that you’re progressing towards financial freedom and moving further and further away from living from paycheck to paycheck.

Here are the 10 questions I use to audit my finances on a monthly basis.


11. Get help

Are you tired of saying you’ll do something about your finances but never do it? 

Are you tired of wondering ‘where did my money go?’ a few days after payday?

Are you tired of the crippling fear? Are you tired of not making tangible progress?

Are you tired of being afraid of the next bill?

Are you tired of clenching your jaw when you think of your debts? 

Tired of switching off your phone to avoid calls from debt collectors? 

Tired of having a gallery full of the lifestyle you want but can’t afford? 

Are you tired of living in shame?

You can subscribe to my blog so that you always receive gems in your inbox every Thursday. You can also hire me as your Personal Finance consultant.

Seek help. You don’t have to do it alone.


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  1. Alexandra

    Love the part where you tell us to identify where it is people ask free advice from us and monetize that!! A very simple yet clever & different angle of how to identify hustles-Just love it!!

    • Agatha

      Yaaaas, ‘you can pick my brain once that invoice is paid’ should be a mantra.

  2. David kamau mwangi

    Great article.

    • Agatha

      Thank you,David



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