Living Paycheck to Paycheck? Here's Some Advice From a Money Coach

The feeling of living paycheck to paycheck is a terrible experience and an awful place to be, because you work hard and yet your money is never enough and you are always in a place of lacking.

I am not here to say whether or not you are really living paycheck to paycheck because each person has their own unique individual financial circumstances, and some people are of course living paycheck to paycheck.

However, a common thread that I hear and see when people tell me that phrase is that they have credit card debt. And if you have credit card debt while living paycheck to paycheck, it is most often one of the biggest contributors, if not the cause of your poor situation.

Let’s get into it. If you have credit card debt, chances are you do not know the interest rate that you are paying on that debt, and it might be taking a far more considerable chunk of your paycheck away than you ever realized.

One of my clients shared that she was so tired of working at a job she did not like but having to keep doing it in order to make enough to pay for her bills.

However, once we dived into her credit card debt, one of her cards had a $6,000 balance, which might be a lot to some people and little to others, but she was paying 26 % on interest on that card.

In her mind, she was just paying interest like you would with any other credit card, and she had no idea how much it actually was.

When I showed her the interest rate she was paying and did the calculations, it was shocking.

On a $6,000 balance, she was paying almost $12,000 of interest alone. It would have taken her eight and a half years to pay it off at the minimum of $130 a month, and that is on top of her already feeling like she is not making enough and paying the minimum on her other credit cards.

This was such a heavy discussion, and she cried as she found out she was going to pay double the interest than she was on the actual balance.

So many of us do not understand the impact that credit card interest is having on us. Credit card companies are raising their interest rates and they are no longer required to let you know.

So many times when I get on an initial call people tell me that they think they are paying 10% on interest, and when I tell them to go online and check, they are shocked to find out their interest rate is more than two times higher.

Most of the people that I speak to are in the 20s. The client I just spoke to yesterday was shocked to see that her interest rate had gone up to 28%.

When you have any interest on a credit card and are not paying your balance off at the end of every month, because you cannot afford to do so, it is crucial that you know how much your credit card interest is taking away from each paycheck you receive. Awareness is key, and once you know what is going on, you can fix it.

That client I talked about earlier is now paying zero on her credit cards. She went from going to pay $12,000 in a course of eight and a half years on interest alone to paying zero. Moreover, she is going to have that card paid off in the next three months since we have been working together.

Living paycheck to paycheck

I hope this has been helpful to you and I have convinced you to check your credit card interest rates, as it might be the primary reason that you are living paycheck to paycheck.

Let this be the year of abundance for you and not the year of continuing to feel stressed and lacking and paying so much more than you need to on your credit cards.

Share in the comments what your biggest financial revelation has been so far and how it has changed your life and your financial situation.

Next, learn How to Shift Your Money Mindset and Escape Debt for Good.