An overwhelming number of Americans are stuck living paycheck to paycheck these days—surveys show nearly half can’t even afford an unexpected $400 expense. I know first-hand how scary and limiting that can feel.
At 20, I was your typical struggling college student...except I wasn’t typical. I was a single mom, living on welfare (I qualified for food stamps and Medicaid after having my son at 18) and pinching small paychecks from two part-time jobs.
I wanted to do better—for myself and my son—but it wouldn’t be easy. Often, people trying to transition out of the welfare system get stuck: They may start earning too much to qualify for benefits, but still not enough to consistently make ends meet (which is what ultimately happened to me for a while). Plus, I was surrounded by others in the same scenario. For my entire life, my parents lived paycheck to paycheck and, at times, received the same type of assistance. Many other people I knew did, too.
I saw education as my way out. So I took out student loans and hustled hard—to complete my college courses, get internships and improve my skills—till I graduated at 22. At that point, I landed a full-time job making $28,000 and was able to get off welfare.
But suddenly earning more than ever wasn’t enough to stop the paycheck-to-paycheck cycle. It wasn’t until years later—when I got frustrated one day after realizing I couldn’t even afford to wash my clothes—that I got serious about changing how I managed money and set real goals that I finally broke free. Here’s how I did it.
1. I set a budget.
I’d never seriously budgeted before because I didn’t think I earned enough. But to truly unbound myself from my paycheck, I had to do it. I was honest with myself about what I could afford ($60 max on eating out) and what I couldn’t (a gym membership and cable). And I kept my living expenses ultra low—opting to stay in my cheap college apartment instead of upgrading to one closer to work.
This helped me do something new: save! I prioritized building up a small emergency fund, along with a checking account buffer equal to one month’s worth of basic living expenses.
2. I got comfortable saying no.
I realized that by saying yes to impulse buys or peer pressure, I was actually saying no to my financial goals. I had to look at my values—being debt free, having financial security and becoming a homeowner one day—and avoid anything that didn’t align with them. At times, that meant saying no to expensive toys and gadgets for my son, though we never skimped on quality time together. We’d go camping, ride bikes and watch movies together at home.
3. I maximized every dollar I earned—and found ways to make more.
In addition to saving every bonus, cash gift, tax refund and raise, I also worked side hustles to bank even more. I picked up a few freelance writing clients, which brought in about $400 to $800 per month, and did in-store demonstrations at stores like Jewel Osco and Sam’s Club on the weekends for $20 an hour. Once I had a baby emergency fund of $2,000, I split my earnings between savings and debt payments for my car loan and student loans.
4. I stuck with it.
After about 18 months, these strategies helped me build up enough savings to ease my financial stress, and I finally stop feeling like I was living paycheck to paycheck. It definitely wasn’t easy—especially because I never earned more than $40,00 during this time—but I didn’t expect it to be.
Today, I’m much more financially confident. In addition to a six-month emergency fund and one month’s buffer in my checking account, I’m able to invest and will even pay off my student loans this year. The best part? I never have to utter the words, “Let me see if I can do that when I get paid” again.