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Build-Improve finances slowly when living paycheck to paycheck

We get emails from, read stories on, and have life experiences about people who want to improve their finances “overnight”. That is rarely possible, and it takes time to improve your financial situation or to build finances. Whether it is paying down debt, saving money, or improving your financial situation from new skills, all of them are accomplished slowly, over time (usually years).

We know of people and hear from low and even middle income families who want to have significant savings accounts, investments, or pay down their debts right away. Or they want a new, higher paying more fulfilling job. The fact is that is almost impossible. It takes time (and discipline) to build or improve your finances. It is the concept of “baby steps”, which applies to much in life, including building finances.

The best way to lose weight is to eat less and exercise more, and the weight will slowly but steadily come off. The best way to get better at anything or build a habit or become an expert at something is to slowly but steadily and consistently to do it, and if committed (and maybe lucky enough or make your own luck) you will become an expert. And the best way to improve your finances when you are living paycheck to paycheck is to slowly and steadily do it.

Pay down debt

The average credit card balance, car loan balances and other debts of American consumers is approaching (or at) record highs. For anyone in debt, it took time for them to get into that place. It will take them time to get out of it and improve their finances. It will take even more time if they are low income or are paying their bills or debt paycheck to paycheck.

A few simple things to remember. Also pay down the debt with highest interest rates first. Pay extra principal each month, not just the interest. If the debt is “good debt”, meaning tax deductible or asset based, that debt can wait too. Even if you are lower income and/or living check to check, throw a few extra dollars at the principal each month. But all of that takes down and the results are slow and gradual.

Even if you pay $5, $10, or $20 extra (or whatever) towards the principal, it will make a difference to your family’s financial situation over time. Before you know it, over the months, slowly but steadily paying the debt down will greatly improve your financial situation and you will be in a much better place.

Slowly build savings

It takes time to slowly build a savings account. Or to save for retirement. Slow but steady wins this race as well. Even if you are living paycheck to paycheck or can’t save or invest too much per week or month, the beauty of compound interest is that over time your investments will slowly but steadily work for you as well as you start the saving/investment process.

If you have debt, such as credit card or other debt with high interest rates, pay that down first. Then, once your debt is in better shape, steadily start to improve your financial situation when it comes to your savings. In other words, pay down high interest rate debt first before going full steam into building a significant savings or retirement account.

As we have noted many times, compound interest works slowly but steadily over time to help your investments grow. One great thing about it as well as low income families, middle income Americans or high earners can all benefit from the magic of compound interest. It does not “discriminate” based on age, race, religion, socioeconomic status, or anything.

We also wrote how slowly but steadily saving just $2 a day can help you improve your financial situation over the years. If you can save/invest more, and/or start earlier, then of course you will benefit even more so. The point is steadily to save and invest, and slowly but sure your investment or savings will grow.

Employment and career skills

The best way to improve finances is by increasing your income and skillset. This too is a slow, gradual process. It takes time for people to learn the skills needed in today’s economy, whether its IT skills, high tech manufacturing, health care, apprenticeship, or any of those other in demand, niche type skills.

Gaining new skills should lead to a new (or better) paying job in the long run. But going to school, gaining certifications, taking classes, learning on your own, etc. all take time. Going down this path is also a slower process, but the rewards in the form of employment can be great. If you are living paycheck to paycheck or low income, there are free job training, workshops, and other resources that can help you with meeting this goal.

The point here is that there are many ways to improve or start to build your finances. Three of the main ones are above. But none of these is accomplished overnight. It can take years of commitment, work, and dedication. The process is slow but steady and takes discipline. But as time goes on you will slowly but surely start to see any improvement in finances. Whether it is less debt, a retirement account, or higher paying, more fulfilling jobs, the rewards will come down the road. It just takes time.


Jon McNamara is the CEO of needhelppayingbills.com, a company that he started in 2008 and that specializes in helping low income families as well as those who are in a financial hardship. He also found NHPB LLC, a company committed to helping the less fortunate. Jon and his team also provide free financial advice to help people learn about as well as manage their money. Every piece of content on this website has been reviewed by him before publishing and many of the articles he has personally written. Jon is the leading author for needhelppayingbils.

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