If you’re living paycheck to paycheck, an unexpected expense like a car repair or medical bill could throw you into crisis mode, especially if you haven’t been able to save for an emergency fund. You can break out of the cycle.

  1. Create—or recommit to—a realistic budget. Take a look at your spending habits to see if you can reduce or eliminate anything. Your goal is to cover your bills, but allow for some savings and fun money each month. Follow your new budget closely for several months, then decide if you need to tweak any areas.
  2. Pay yourself first. After bills are paid, it’s important to put money into a savings account, even if it’s a small amount. Having an emergency fund can help protect you the next time the unexpected happens, especially if it’s something more serious like a job loss.
  3. Get a side gig and put the earnings in a savings account. Finding a second job or extra income can help you break the cycle, especially if you deposit the extra earnings into a savings account. Your savings account will earn you dividends, allowing you to build an emergency fund and plan for other savings goals. Unsure how much you might need for an emergency fund or how much to add each month? Our calculator will do the math for you.
  4. Create a plan of attack against debt. If you’re like most people, you probably don’t remember what the interest rates are on your credit cards and loans. Check them out and set up a pay-down plan. Make at least your minimum payments, but add more money toward the debt with the highest rate. When that’s paid off, add that payment amount to the debt with the next highest rate, and don’t add more loans or cards. Pretty soon, you’ll have more room in your budget and you’ll break the paycheck-to-paycheck cycle.

We Can Help You Stay in Control

Do you want more help in making wise money management moves? Navy Federal Credit Union has services and products to guide you to credit confidence. We offer ways to help you consolidate debt, build your savings and help give you better control over your future finances.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.