Time Magazine recently reported that 2 in 5 households in the U.S. are still living paycheck to paycheck. That’s a pretty striking number, and the recession has been the biggest cause for this. They also reported that a quarter of women in the U.S. said they missed at least one payment in the past year.
I know from personal experience that living paycheck to paycheck is actually pretty frustrating. You feel like you are working so hard, but you just can’t get ahead.
So how can you break this cycle? What makes it start?
I recall two vivid times in my life when I’ve gotten stuck in this cycle, and it was due to just one bad freelance month or one unexpected medical bill. When you feel that pinch, and you are waiting for money to come in so you can pay your bills, you feel irritable, scared, and in general, pretty embarrassed about the whole situation. Not everyone can or wants to take out a loan from a family member in the case of an emergency, so another option is to seek out the best personal loan option from a bank if you’ve exhausted your emergency fund.
Depending on your credit score, many banks will give out personal loans for a number of reasons. You can use it to consolidate debt so that you can make one low monthly payment. You can try to pay off school loans. I know that while my hubs and I have federal loans, many of our medical school friends got better rates from their banks.
Of course, I don’t want you to get into more debt needlessly. Before you take out a personal loan, I definitely recommend using a loan calculator to make sure you you can actually take on another monthly payment. Many banks will give you a grace period before you have to pay it back, so you can get back on track. You can also assess your monthly “extras.” Perhaps you can give up your iPhone or your cable TV, which can also help to give you some wiggle room so you can pay your bills on time and put some money into an emergency fund. That way, you’ll never feel that uncomfortable pinch again.
So what about you? Have you ever lived paycheck to paycheck? How did you get ahead? Did you take out a personal loan, borrow from family or friends, or take on a second job? Spill it.