If you are someone who borrows money frequently or eagerly waits for the next paycheck or live on credit card nearing the month end or so, then you might be living paycheck to paycheck. According to a survey conducted by CareerBuilder, nearly 78% of people live paycheck to paycheck in the US, the situation is no different in India. It is not a very good situation to be in and if you do not act NOW, it is going to get worse. It is risky, it is damaging and it makes you vulnerable.

Why is it bad to live paycheck to paycheck?
Yes, I am using the word bad. Unless you are under some grave circumstances, it is highly advisable not to live paycheck to paycheck. It makes to financially vulnerable which is in all chances going to be damaging. However lucrative a thing may be, do not take a loan or debt until it is absolutely necessary. Debts have a special characteristic of accumulating very fast. They will be huge before you know it. And once in debt, it will get very difficult to come out courtesy the rate of interest imposed on the borrowed money.
Before it gets too late, realize what is actually important and redefine your spending habits. You have to stop living paycheck to paycheck and borrowing money to get things you don’t really need.

How to stop living paycheck to paycheck?
There can be three possible reasons why you live paycheck to paycheck-
1. You do not make enough
2. You do not have a budget or a poor budget
3. You spend too much

Let us start from BUDGETING
A budget is a financial plan which helps you get hold of your earnings and expenses. It helps you keep an account of your income and where that money is going. Another advantage of budgeting is it will let you know in advance what you earn and how much can you spend. This brings us to the next part, spending. If after budgeting, it comes out that all your expenses get covered under what you earn, then the problem lies in Spending habit. Read https://www.piggy.co.in/blog/budgeting-in-2019/

Tracking expenses and Spending
If you have already made a budget, yet you remain empty in your pockets by the time its month-end, check your spending habit. Are you someone who spends according to mood? I am happy, let’s go shopping! I feel sad, let’s go shopping! I feel alone, let us go shopping! And lots more. If you follow your mood for shopping, you are in for a huge bump in your finances. The easiest way to track your expenses is to list them for some time. Let us say, for a month or two you keep all the receipts and bills safe and make a balance sheet. This will help you narrow down on categories like daily needs, one-time expenses, medical, etc. Segregate on items like food, fuel, groceries, etc. and you will have a list of things which are necessary and which are not.
Even if you shop online or through your cards, you can always take out a statement of your card or account and see where the money is going.

Cut down on expenses
Once you have tracked where the money is flowing, you can always plan your expenses. This will require you to change a few habits initially and slowly add-on to the change list until your financial goal is reached. Start with daily habits like you may be habitual of having breakfast outside or picking it up while you go to work. Let us say it costs your Rs. 50 per meal, this will add up to Rs. 1500 per month and Rs. 18000 per year. Skip this habit and start preparing breakfast at home. Try getting up half an hour early and make your own breakfast. This can bring down the breakfast costs to almost half the current price. Another example could be your travel habit. If you own a car and drive down to work daily, try considering Pooling. Reach out to people who live in the same or nearby area as yours and plan your carpool. This will prove to be very efficient while cutting down on your fuel costs and also is environmentally favorable.
There can be many more such things like Cable plan, internet plan, gym membership, club membership, etc.

Grow your money
It typically does not mean going to your boss and nagging him about getting a raise, there are many other ways which can help you raise some side income.
A. Encash your talent– if you are really good at something, like playing piano or guitar, painting, singing, cooking, etc., try to find a part-time job that pays you well for your talent or hobby.
B. Plan your taxes– it includes two things: saving as much money as you can from being taxed and getting a tax refund where ever possible
C. Invest– it may seem like another expense but this will pay off as and when you need. If you know you will need money in a short time, invest in a short-term plan with as low as Rs. 500 and reap interest. Visit www.piggy.co.in

Respect money and change your attitude towards it
No, I do not mean money has feelings and needs to be respected. It is a matter of principals to respect the wellspring of so many things which bring about happiness. It is a matter of attitude you possess towards your own money. It should not be taken for granted at any time.
Also, train yourself to make wise money decisions and not go haywire about a sudden up or down. Start saving even if it seems inconsiderable as of now, it will add up to a handsome number someday. Invest to grow it. Keep an eye on where your money goes and be smart enough to repair those leaking cracks it any.

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