My Debt Blog

Is it a bad thing to live paycheck to paycheck? I think it’s quite common that most people have a fixed income with variable expenses and debt. Lifestyle also needs to be a variable expense to balance out when expenses go up, plus income could feel tight for a bit. If there is a case where the expenses exceed the income after lifestyle has been cut down to nothing, I would consider that an emergency. An emergency fund can help get through the problem instead of doing what many people do, run it up on a credit card.

There are some priorities when it comes to what to do with the income. Our income at the beginning of the month handles the mortgage payment, which takes out half of it. The rest is allocated between fixed expenses like regular bills due before the 15th and the rest is for variable expenses. The mid-month paycheck goes towards the bulk of our monthly bills like utilities and payments towards debt. When the money comes in it is a good idea to have a plan of where it is going instead of wondering where it went.

I’ve also pondered what things will be like without having to pay for a single debt. If our income remained the same and we had absolutely no debt, outside of the mortgage, one pay period would cover expenses for the entire month. We would be able to save the entire second pay period in full. If there was no mortgage, we could save or invest the mortgage payment on top of the second pay period. There are people who live like this, and someday I want to be one of them. If we hit that point we would no longer be living from paycheck to paycheck, but rather focusing on living without worrying too much about the paycheck.

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