How to Stretch Your Paycheck in 2025
If you feel like you’re living paycheck to paycheck and counting down the days until your next payday, you are not alone! A recent study published by CNBC reported that nearly half of Americans live paycheck to paycheck.
There are many factors that contribute to this statistic, including:
- Inflation and the Constant Rising Cost of Essential Goods and Services
- Debt From Credit Cards and Signature Loans or Student Loans
- Lack of Adequate Savings Funds
While some of these circumstances are out of our control, that doesn’t mean that we are powerless to get our finances in order. In fact, there are ways to overcome living paycheck to paycheck and to help you make your paycheck stretch just a little bit further this year. Stretching your paycheck is possible, and requires strategic tracking, saving and money management.
Stretching Your Paycheck = Know What You’re Spending!
The first step in making your income stretch is to know exactly how much you have going out each month. Surveys reveal that 65% of Americans had no idea how much money they had spent the previous month. On top of this, many individuals find that they consistently underestimate how much they spend each month. The process of tracking your outgoing expenses takes time, and many experts recommend that you track expenses weekly to ensure accuracy in your spending.
In terms of creating a budget that makes your money work for you, you should carefully monitor and track your spending over 2-4 months to gain an accurate representation of how many outgoing expenses you have each month.
There are several free apps that you can use on any smartphone to help with this process! Some of the top free apps include:
- Goodbudget
- Copilot Money
- Rocket Money
Once you have a better understanding of what you are spending each month, you can then begin to sort through your expenses. By identifying wants versus needs you can begin to see areas where you can trim expenses and decrease the amount of money you have going out each month!
Trim the Fat off Your Expenses
Trimming the fat on your expenses is possible once you review your spending habits and see where your money is leaking out each month. Some of the most common ways individuals can reduce their spending includes:
Subscriptions:
The average American has around 5 subscriptions and spends typically $924 a year in subscriptions. Ensure that you are actually using all of your subscriptions, and that you do not have anything on autopay that you don’t work with regularly. Particularly with streaming services, look for bundles that can combine services, and consider sharing a subscription with a roommate or family member for the time being.
Grocery Costs:
Ever since the COVID-19 pandemic, food costs have continued to steadily rise. By sitting down and making a list of meals for the upcoming week, you can take a step towards eliminating food waste and avoid purchasing unnecessary food items. Using coupons when buying groceries and toiletry items can also come in handy! In addition, you may also want to evaluate where you are grocery shopping. Consider shopping at discount grocers such as Aldi, Walmart or Costco.
Evaluate Entertainment Spending:
Evaluating your entertainment budget does not mean cutting all fun out of your spending. From dining out to concert tickets to attending events, there are ways to trim your entertainment budget that will still allow you to partake in social events. The average American eats out at least 3 meals per week. Try to reduce your dining out budget to eating out only once per week. When dining out at a restaurant, consider ordering water or skipping the appetizers. In addition, you can look for BYOB restaurants where you can bring in your own alcohol to try and keep the cost down.
Utilities:
It can be worth calling your utility providers to ensure that you are receiving the best deals possible. Ensure that you are receiving all discounts possible. Are you a teacher, first responder or member of the military? Most cell phone providers offer discounts for individuals with certain careers or jobs in service. When it comes to your home, ensure that you use energy wisely. Make sure you turn off lights and use natural light when possible, and consider setting your heat or air conditioning to eco mode.
Manage Your Debt Wisely
Another progressive step that you can take when it comes to making your money stretch is assessing how you are handling your debt. Carrying debt is nothing new to Americans. In fact, American household debt currently hovers around $18.20 trillion, with the most common types of debt being mortgages, auto loans, title loans, credit cards, and student loans.
While debt may be unavoidable, there are ways in which you can manage your debt that can help your overall finances:
Pay Down High Interest Debt:
One of the most common forms of high interest debt is credit cards because the interest is compounding, and if you don’t pay off your balance in full each month, it is easy to get in over your head. According to LendingTree, the average credit card interest is about 24.35%. Take inventory of your credit cards, and if you carry debt on multiple cards, consider prioritizing the card with the highest interest rate first. This could save you hundreds in the long run!
Look to Refinance:
Interest costs money, and having a high interest rate on a loan will make it tough to get your finances back in order. You can’t make your paycheck stretch if most of it is going toward paying off debt! As you continue to make smart moves with your finances, your credit score will increase. Regularly check to see if you qualify for better rates, and consider calling your loan providers and credit card companies to see if they will lower your interest rates.
Avoid New Debt:
While it can be tempting to take on new debts and to charge purchases on credit cards, avoid this at all costs! By avoiding taking on new debt, your overall financial health will improve.
Try Increasing Your Income
Finally, if you find that you are still having trouble making ends meet, you may need to look for alternate ways to increase your income. This can take several forms, and individuals have a multitude of options when it comes to earning additional income. You may want to consider:
- Asking for a raise: Consider asking for a raise at your current job. Before doing this, ensure that you do your research. Research comparable positions and their pay. Make sure you have a well laid out plan, and have considered how long you have been in your position, and your contributions to your current role.
- Ask for additional work: If you are looking to earn more money, ask your current employer if there is additional work that you can complete. Oftentimes employers can delegate additional projects, tasks or events to current employees for more pay outside of their salary. In addition, you can also see if there is a way for you to work overtime.
- Consider a different role: If you find yourself in a position where you have reached a ceiling and there is no way for you to earn additional income in your current position, seek a higher paying job.
Lastly, you could also consider taking on a side hustle, or additional part-time job. Consider looking for seasonal work, or turning one of your interests or hobbies into money. The current economy can be challenging, but you do not need to drift helplessly through these waters! Careful research, planning and hard work can help you stretch your paycheck and make solid strides towards a healthy financial lifestyle.
