How To Stop Living Paycheck To Paycheck (When You Really Could Be Saving)
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How To Stop Living Paycheck To Paycheck (When You Really Could Be Saving)

What do your money and your mind have in common? Well, the health of both is affected by your conditioning. So what if you were raised with no concept of saving or investing? DIY that ish.

When I was around six years old, my grandfather built me a small wooden treasure chest with a gold latch. He told me that when I got money for birthdays or family members, I should put it in the box.

As the amount grew and dollar bills thickened on top of one another, we’d celebrate. When the amount got to $500 after a few years, he told me he was going to put the money into “investments.”

As the child of a single working class mother, I learned to save not just because it was smart, but because it was a safeguard. Going to the store meant hearing “we can’t afford that right now” or “it’s too expensive,” so I carried this saving conditioning into my young adulthood. But saving is where it ended for me. After that initial talk of “investments,” it was never brought up again.

Despite knowing the stock market “ebbs and flows,” I had no understanding of it beyond that. Prior to graduating college, I had never heard of mutual funds, or bonds, or how a 401(k) match works. I don’t think my family did either. Or if they did, it wasn’t discussed.

“As the child of a single working class mother, I learned to save not just because it was smart, but because it was a safeguard.”

After learning more about financial security, I realized I needed so much more than savings and nowhere near prepared to get it. Instead, I risked repeating the same paycheck-to-paycheck cycle my parents were on, even though I was in substantially more stable position.

Annamaria Lusardi, academic director of Global Financial Literacy Excellence Center (GFLEC) and an Economics and Accountancy chair at The George Washington University School of Business, told me that my experience is common for millennials from lower socioeconomic backgrounds.

“What we have found [is] there is a very strong relationship between finance and knowledge of financial literacy with socioeconomic background,” she said, admitting it’s hard to break the cycle.

While I was lucky enough to be taught to save, those who come from a paycheck-to-paycheck lifestyle like myself are light-years behind. Not because we’re frivolous with money, but as Lusardi puts it: we didn’t “[have] the advantage of being exposed of ways to be savvy about finances.”

Caezilia Loibl, an associate professor in the Department of Human Sciences at Ohio State University and co-author of theJournal of Economic Psychology, told me that of the 25 students she taught in one of her financial literacy classes, the most knowledgeable student in her class was the daughter of a banker.

Here’s the good news, however: You can break the cycle. Here’s how.


One of the upsides to living paycheck-to-paycheck is knowing how much I didn’t want to worry about finances as a grown up. This year I called a financial counselor who helped me with setting up my 401(k)—from how much I should invest from my paycheck, to choosing between stocks and bonds.

Hint: the younger you are, the more chances you can take on when and how much you choose to invest.

Take advantage of the tools available

The tool I use to invest is called Betterment. I set the amount that I want to automatically deposit in the investment pool account each month and the process happens on the dates that I set up.

Take on a side hustle or two

Bobbi Rebell, author of How To Be A Financial Grownup, also says side hustles are now giving us millennials the freedom to be more financially prepared for our future in a way our parents couldn’t be.

“They were probably on a strict salary,” she said. “We can do a side hustle, that did not exist before.” I, myself, have my own side hustles to help pay my loans so I have more room to live my life or invest.

Moderate your values

When coming from a not-so-well-off background, Rebell says people either emulate or react against. Can you identify which you do? “The trick is to moderate your values,” she said.

With student debt and the desire to safeguard myself, I live within my means, like forgoing a nicer apartment in NYC and eating $1 pizza, just to make sure to put money in my savings each month. As these experts taught me, it quite literally “pays” for young people to be informed and savvy about those decisions.

I’ll still save, but this time around, I won’t only put my money into a treasure chest, I’ll invest it when I can. I may repeat my mom’s “can’t afford it” mantra now. But not for long.