How to Stop Running Out of Money Every Month

I still remember when my wife and I were always broke. Luckily, we figured out how to stop running out of money every month.

To stop running out of money each month, get on a written budget to track and reduce expenses. Temporarily stop contributions to kid’s college, savings, or retirement plans until you are able to live within your means. Then look at long-term career options to boost income.

But there’s a lot more to know about budgeting, breaking the vicious cycle of living paycheck to paycheck, and learning how to live on less than you make.

So in this post, we’re diving deep into the vicious cycle we all sometimes find ourselves in where we’re just treading water waiting for that next check.

We’ll examine spending habits, debt, and income statistics. We’ll also look at the best way to divide up your paycheck by categories and how to get going on a budget.

But specifically, we’re looking at some proven tips on how to stop living paycheck to paycheck. Tips you can easily implement to bring some comfort and sanity back into your house.

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What happens when bills are more than income?

There’s nothing scarier than getting down to those last few dollars but still being a few days or weeks away from payday!

Do you have less than $1,000 in the bank and are basically one really bad day away from big financial trouble?

If you’re like most people, you are.  If you’re even more like most folks, you have at least $6,000 in credit card debt and most likely you started late and aren’t saving enough for retirement; the true living paycheck to paycheck definition.

Living paycheck to paycheck, by definition, means that when your check comes in, you’re already out of money from the past check; nothing saved, nothing set aside for emergencies and nothing saved for the long term.  Then that new check comes in and it’s spent in no time flat too. Repeat.

When our bills exceed our income, a few things start to happen:

  • We tend to start using credit cards just to live off of
  • Then we start to pay bills late (or not at all)
  • Stress builds up (especially between couples)
  • 1 big unexpected expense (car accident, medical issues, new roof or HVAC system for our house) can often push us towards bankruptcy

But there’s a better way (and you don’t have to be rich to make it work!)

You can get to a place where you have more cash than bills and where you don’t stress each and every month hoping you have enough to cover the essentials. Imagine being able to save up and take a vacation that doesn’t get paid by credit card! Or buying a new late-model car without a huge car loan (or getting turned down for one).

How do I stop living paycheck to paycheck?

I have been in your shoes.

9 years ago, my wife and I owed more than $60,000 and were living in a house we couldn’t really afford. When the cash would run out about halfway through the month, we’d just grab the credit cards and keep going.

It wasn’t sustainable. Don’t be like me.

I want to spur you into action and my hope is that by reading this post you’ll begin to put more thought, but more importantly ACTION into your financial planning.

We may looking for stop paycheck to paycheck tips now, but that’s not where we want to be in 3, 5 or especially 10 years down the road.

So check out my stop living paycheck to paycheck tips. I’d love to hear back about your progress and answer any questions along the way.

You don’t have to be a CPA or a CFO or even a stockbroker to do some decent long and short-term financial planning.  In fact, “financial planning” is probably too fancy a word for what I’m talking about.

I just want you to be intentional and aware of both where your hard-earned dollars are going each month and what are some strategies you could easily and quickly implement to take that to the next level.

If you struggle living paycheck to paycheck and are looking for some simple tips to maximize your hard-earned dollars, I highly recommend you check out my post Bigger Paychecks.

After all, one of the best ways to stop living paycheck to paycheck tips is to maximize the income we earn! Just click the link to read it on my site.

How do you break the cycle of living paycheck to paycheck?

Mostly, we just need a plan.

When we get intentional with our money and start thinking and planning rather than purchasing on impulse, we start to spend less. We evaluate the choices and choose to not buy everything we might have.

This is especially true for couples who make decisions together.

Often in a marriage or relationship, 1 person is more the spender and 1 more the saver. So they work to keep each other in check.

In order to stop living paycheck to paycheck we first need to:

  1. Identify the problem
  2. Figure out how we got there
  3. Figure out the steps needed to solve the problem
  4. Identify the habits or circumstances we need to change to not repeat the problem

If you need some help on how to Get Out of Debt on a Low Income, a highly recommend you take a moment and check out one of my latest (and greatest) posts that dives deep into that subject.

Just click the link to read it now on my site.

middle class dad stop living paycheck to paycheck tips debt and savings inforgraphic

Why are you broke?

  • You Don’t Have a Roadmap – You can’t get anywhere if you don’t know the way, and just like a map or GPS system tells you where to go when driving, a monthly household budget is your way of telling your money where to go each month.  Without a budget, you just spend until it’s gone and the ride out the days until the next paycheck and hope nothing bad happens in the interim.
  • You Spend More than You Make – Unless you’re in Congress this just doesn’t work.  You’ll never get ahead or even stay afloat if you are outspending your income. So getting your spending under control is one of my top stop living paycheck to paycheck tips.
  • You Have an Income Problem – It could be that you budget each month, have your priorities straight and your spending is in line but you still can’t catch your breath.  In those cases, it may be worth looking at your income and career path and especially looking at the long term.  According to the Department of Numbers, the median household income in the US is currently just under $58,000.  Of course, if you live in California or New York, the median there is probably higher, but if you make a lot less than $58,000 then it’s time to examine career choices.

All of these may not apply to you, but if you struggle to make ends meet, and are searching for stop living paycheck to paycheck tips or just can’t seem to get ahead or catch a break, chances are at least one of these does apply.

Fear not though!  This post is not to make anyone feel bad about their situation.  I’ve been in your shoes and I simply see the benefits of looking at things differently and want to help you do the same.

How can a budget help individuals and families?

A budget is simply a document, spreadsheet or even a piece of paper that you and your spouse write out and agree to before the month begins.

You note all the projected income at the top (ie: your paychecks) and all the projected spending below that.

You know what your expenses are:

    • Rent or Mortgage
    • Electric, gas, and water
    • Gas for your cars
    • Internet & Cable TV
    • Cell phone bills
    • Insurance (life, auto and maybe renters)
    • Groceries
    • 401k or retirement
    • Credit cards or bank loans
    • Car loans

Start by projecting what all of those will cost (based on previous month’s history) and subtract that from your income.

Then see what’s left over.  We haven’t yet touched on general savings, rainy day funds or kid’s college and those are all necessities too, but until we get back on track it will be best to press pause on those things.

I have a copy of my Budgeting Spreadsheet available at no charge – a key step in not living paycheck to paycheck!

middle class dad stop living paycheck to paycheck tips free budget banner optin

It’s a simple, highly customizable, Excel spreadsheet and you can download it quickly and easily FOR FREE!

If you get started on a budget, you’ll also want to check out my post on why you need Multiple Bank Accounts.  This post details exactly why you need 5 different bank accounts and how they are one of your best stop living paycheck to paycheck tips.

How much should you save from each paycheck?

Everyone’s monthly expenses and income are a little different. That being said the infographic below is “generally” what I recommend in terms of how to divide up your paycheck.

Obviously, some slight variations will work just fine. In my experience though, if you have any significant differences in your budget, you may have a hard time NOT living paycheck to paycheck.

middle class dad stop living paycheck to paycheck tips how to divide up your paycheck infographic

What is the 50/30/20 rule?

Essentially this is a style of budgeting that says you spend 50% of your income on needs, 30% on wants, and 20% on savings. I personally find that system too simplistic but if it gets you budgeting than that’s better than not starting!

My biggest issue is that in certain circumstances (such as low income or heavy debt) I don’t think you should be focused on savings at all. And 30% of your income going towards so-called wants is probably too high until you’re out of debt and living more within your means.

How do you not run out of money?

First, we need to trim our household budget.

I recommend putting your monthly expenses in order from most to least important.  They are all important. It’s also important from an integrity standpoint that we repay our debts.

But when times are tight, some payments may get delayed or put on the back burner so it’s important to prioritize those!

But one of the best stop living paycheck to paycheck tips is to prioritize your bills and expenses.


  1. Rent or Mortgage – Your problems get a whole lot worse if you have an eviction or foreclosure to deal with
  2. Utilities – No lights or water is bad for everyone
  3. Food – You and your kids have to eat.  You don’t have to eat fancy or eat out, but don’t let your kids go without
  4. Gas for cars – You can’t get to work or look for work without reliable transportation so keep at least 1 car gassed and in good working order


  1. Internet– You can probably make due with your smartphone and/or a computer at work
  2. Credit Card payments – Make the bare minimum payments until your budget gets in the black.  Even if you can’t afford their stated minimum payment, send them something each month ($25) and they can’t report you as unpaid or paid late.  In dire straights though, these guys would be bottom rung on the ladder.


  1. Cable TV – Get the top-rated digital antenna from Amazon for under 30 bucks, or get a Roku stick and stream Amazon Prime, Netflix, Hulu, and other similar channels. Don’t have Amazon Prime? It’s got tons of channels, movies, and TV shows. Try Amazon Prime free for 30 days! You’ll also get their famous free 2-day shipping on all qualified purchases.
  2. Eating Out – Eating at home and cooking from scratch is just cheaper (and often healthier).  Until the budget, income, and spending is under control, no eating out
  3. Fancy Cars – If the total value on your cars exceeds half your annual gross household income you simply have too much invested in cars and need to sell one (or both).  For example, a couple making $40,000/year should not own more than $20,000 total in vehicles combined.  Do you still have car payments or maybe are underwater on your car’s value?  A low-interest loan from your local credit union is preferable to a $400/month car payment when you can’t keep the lights on.

Do you need to find a new career path?

As I mentioned above, if your household gross income is well below $58,000/year, you may want to look at your or your spouse’s career track and do some long-term planning.

Now there could be reasons it’s low and those could be reasons to justify it.  Reasons like:

  1. You and your spouse decided one of you would stay home and raise the kids – A stay at home Mom or Dad is a great thing for your kids and a noble cause and if you can make it work budget-wise; go for it!
  2. One of you is going back to school to earn a degree that will significantly increase their earning potential – Any investment now that pays off significantly later is a good reason to pinch pennies and ride out the storm.  Just make sure you’re on a balanced budget and that the long-term earning potential is really there.

But, if you don’t have kids both partners should be working full time (40 hours/week) and even with kids, one partner should be full time and the other could earn some part-time income unless you’ve opted for point #1 above.

Once you start to get traction, you’ll be ready for some additional tips and insight, so I highly recommend checking out my post about how to Earn Extra Money on the Side.

Those can help you take your family’s earnings to the next level!

If you do need to make an income or career overhaul we need to consider 2 things:

1. What can you do NOW to boost income?

  • Delivery pizzas at night = $1,000/month
  • Mow/rake lawns on the weekend
  • Sell stuff on eBay/Craigslist

2. What can you do career-wise to boost your income in 3 years or fewer?

  • Finish a degree or achieve a certification?
  • Move to a more competitive city?
  • Work more hours or find a new employer?
  • Change fields?

How to get out of debt and get your finances back on track

So we know the issues, we’re working on solutions, but if we don’t address the fundamental behaviors that created the problems, there’s a VERY good chance we’ll get back in the same situation down the road.

In order to get out of debt and start applying these tips, we have to change our spending habits. We have to set goals. More importantly, though, we have to find ways of sticking to those goals.

If you struggle with goal setting and (more importantly) sticking to your goals, check out one of my most popular posts about How to Keep Your Goals.  While it’s geared towards New Year’s Resolutions, it can apply to any goal; any time!

Without knowing the specifics of anyone else’s situation, I can tell you what habits I needed to change when I was in this boat:

  1. I needed to live on a written budget each month (that my wife and I agreed to and worked on before the month began)
  2. We pay cash for things like food, groceries, gas, and spending money instead of using a debit card; when we’re out, we’re out!
  3. We cut out unnecessary expenses like cable and cut back lifestyle in general (hello Taco Cabana, goodbye 5-star restaurants!)
  4. We knew we needed to live on less than we made, (so that meant getting out of debt, cutting up the credit cards, and not looking back).

Should I stop contributing to a 401k if I’m broke?

I mentioned above things like rainy day emergency funds, retirement, and saving for kid’s college but if you’re currently struggling with running out of money each month, I would stop contributing to them temporarily.

In fact, if you are contributing to a 401k or other retirement plan, it’s my belief that you should only be contributing to those ONCE you are out of debt and not barely able to make ends meet.

So when I was in your shoes, I temporarily stopped contributing to those.

Between a solid financial plan, cutting expenses, and possibly boosting income, you can stop living paycheck to paycheck.

But you’re not there yet and a nice-sized 401k won’t help you if you’re facing foreclosure or bankruptcy. And while you could cash it out, between the likely 25% tax rate and 10% penalty, that’s like borrowing money at 35% interest


You WILL get there (I know because we did it); you just need to be focused and intentional with your time, money and actions.  You’ll need to curb impulses and not worry about how nice your neighbor’s car is; focus on your family’s future!

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So now that we’ve done an in-depth look at the stop living paycheck to paycheck tips, let’s recap the . . . 

11 Tips on How to Stop Running Out of Money Every Month

1.  Identify the issue. Most likely it’s one of these:

  • Spending habits
  • Low income
  • Lack of a budget
  • 2 spouses/partners not being in sync

2. Know your numbers

You can’t make a roadmap to implement these stop living paycheck to paycheck tips if you don’t know how much income is coming in and how much is getting paid in bills each month.

3. Get on a written budget each month

Do your budget before the month begins. Check out the best Excel Budget Planner you can download for free from me!

4. Make sure to be in agreement on the budget with your spouse/partner

If you are married or share a household with someone who shares in the bills, make sure to be in agreement on the budget. It’s OK if one of you is more the math nerd than the other, but communicate if something comes up that needs to alter the budget mid-month.

5. Eliminate mine and yours

If you are married there is no more mine and yours. Everything should be “ours” if your marriage is going to last.

It’s totally OK if your budget contains a little spending money for each of you that you get to use however you like. But all the income should be grouped together in one bank account and all the bills should be shared as well.

Couples who keep separate bank accounts or don’t combine their financial lives are most likely going to end up divorced. Trust me, this is one of the best stop living paycheck to paycheck tips. It’s also a great way to improve the happiness in your relationship.

6. Prioritize your bills

Know the essentials (electric, food, rent/mortgage), know the yeses (internet, gas to work) and know the maybes (cable, going out to eat, etc). Pay the most important things first and make minimum payments on the rest, delaying payment if necessary.

7. Cut unnecessary expenses

Some things just aren’t going to work while we get out of a mess. That’s OK! Just like we tell our kids, if you made the mess, you clean it up.

So for now (not forever) say goodbye to eating out, expensive cable TV, buying brand new cars, designer clothes and other expenses that just don’t work as part of your stop living paycheck to paycheck tips and plan.

8. Make some long-term career plans to boost income

While you’re using a shovel to dig yourself out of the hole right now, be thinking about some long-term career changes to boost your income over the next 5 years. The average household income in the US is around $58,000, so if yours is coming in well under that, it’s time to think differently!

Does your employer offer any management training programs? Starbucks has a program its employees can apply for to go to college! Think long term and have a solid plan.

9. Find a side-hustle to add a little extra income each month

All of us could use a few extra bucks each month and there’s plenty of ways to get that without delivering pizzas or mowing lawns. Heck, this blog you’re reading generates a lot of income for me and it’s still in the hobby phase.  Ready to start a blog of your own?

Start with following the same plan I used to Build a Website from Scratch. Just click the link to read the article on my site.

10. Stop (temporarily) putting money into retirement and other savings plans

Retirement savings like a 401k or IRA, kid’s college accounts are all great. They are essential for your financial well-being. But if you’re heavily in debt and trying to implement these stop living paycheck to paycheck tips, we need to stop them temporarily.

We’ll get back to them once we get clear of large debts and have a little breathing room in our budgets.

11. Look at the habits that created the mess and actively work to change those

All of us have spending, communication, and planning habits.

Unfortunately, we all have some bad habits mixed in with the good. So one of my best stop living paycheck to paycheck tips is to make sure you (and your spouse/partner) have identified the habits that created the situation you’re in and are working to change those.

It’s not about a search for the guilty; we all make mistakes and we all play a role in where we’re at in life. But to move forward, identify those things and fix them. Otherwise, we’re much more likely to find ourselves back in this boat a few years later.

Final thoughts

In this post, we examined that place we all have found ourselves in where the bills outnumber the income. We go along each month, run out of cash at some point and hope nothing bad happens. Or we just put everything on a credit card and hope to win the lottery to pay it off.

We’ve all been there, but that’s not a sustainable (or easy) way to live.

We covered how to set up a successful budget and we looked at expenses to cut back on.

In short, we covered the absolute best tips on how to stop living paycheck to paycheck so you can get back to enjoying life!

In over your head? Find Your Best Personal Loan Option can help!

If you’re in the situation where you think a personal loan might make sense to consolidate credit cards, pay off student loans, or take care of some much-needed home repairs, the folks over at HonestLoans make it easy to get the best offers in under 2 minutes.

Even as little as a hundred bucks.

You could possibly save thousands a year and you have nothing to lose in checking! It doesn’t even ding your credit score to look at the offers!

CLICK HERE to see how much you can borrow! Apply in seconds and often, you can get the funds in your bank within 24 hours.

Photo credits (that aren’t mine or which require attribution):
New Dollar Bill (in infographic) – by Dave Winer – is licensed under CC BY 2.0
Money Jigsaw (in featured image) – by Images Money – is licensed under CC BY 2.0
Torn & Cut One Dollar Note (in infographic) – by Caledonian Global Financial Services – is licensed under CC BY 2.0

While I have years of successful financial & budgeting experience and run several million dollar businesses and handled the accounting, P&L and been responsible for the financial assets of them, I am not an accountant or CPA. Like all my posts, my posts are opinions based on experience, observations, research, and mistakes. While I believe all my personal finance posts to be thorough, accurate and well-researched, if you need financial advice, you should seek out a qualified professional in your area.

Statistics in infographic courtesy of CreditDonkey and Motley Fool (two different posts) and FRED.

As an Amazon Associate I may earn a small comission from qualifying purchases if you click to Amazon from my site and choose to make a purchase. You can read my complete affiliate disclosure for more details.

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