Living paycheck to paycheck. Nobody plans on living from one paycheck until the next. It’s something that slowly happens over time as bad habits start to creep through and better judgment fades.
I wrote about how you could avoid the payday/cash advance loan trap, so today I want to brush upon this topic again. Below are some of the setbacks of living paycheck to paycheck and how it can affect you:
You can not invest money in yourself
If you wanted to take some courses on the side to upgrade your skills or learn new skills you would not have the money for this. When living paycheck to paycheck it is difficult to plan for your future because taking courses will just mean more credit card debt.
You will be stuck at your job longer
It’s going to be difficult to quit your job or pursue an entrepreneurial venture when your financial situation is weak. One of the benefits of having money saved up is that you have a relative amount of freedom to make career choices that will keep you motivated. If you are living paycheck to paycheck you can not afford to have a down period while you try to start a side business or look for a new job.
Early payment discounts
Before you make a major purchase there are often discounts given if you pay upfront or if you pay with cash instead of any form of credit. You will not be able to take advantage of some of these lucrative opportunities if you are living paycheck to paycheck.
Do you really need to deal with the stress that comes from unexpected expenses when your short on money? When you don’t have a financial buffer (see: emergency fund) in place it can get pretty stressful when the bills and other bs from life start adding up.
How will you deal with life’s unexpected event when you are living from one paycheck to the next?