15 Money Traps That Keep You Living Paycheck to Paycheck

If you struggle to make your money last from one payday to the next, you're hardly alone. According to a recent survey from Career Builder, 78 percent of Americans who work full-time live paycheck to paycheck. And before you conclude that the problem is your low income, the same survey found that nearly 10 percent of workers earning $100,000+ are in the same boat.

For many people, the paycheck-to-paycheck cycle is perpetuated by mental money traps. Here are some of the most common financial pitfalls that are keeping you from getting ahead.

Being a glass-half-full type of person might make you more cheerful, but it’s hurting your finances. When you’re sure that there's nothing but blue skies ahead, you're not preparing for a rainy day, which means you'll be left scrambling to pay for an emergency.

Similarly, debt relies on the optimistic view of your financial future. When you take on debt, you are assuming that you'll be able to pay it back, without considering the risk that something could go wrong.

It's important to embrace your financial pessimism so you can be prepared for a money emergency.

Everyone falls into this mental trap on occasion, where we believe we will be able to show self-restraint in the face of temptation. For instance, you might tell yourself you can stick to water and a salad when you go out to dinner with friends, but hearing your friends order cocktails and seeing surf-and-turf on the menu weakens your resolve to keep your spending down. Next thing you know, you're putting an $85 dinner on your credit card.

The best way to combat your overinflated belief in your ability to resist temptation is to avoid situations that will test you. You can't spend money if you're not going out to eat, going to stores, or opening once-in-a-lifetime-sale email solicitations.

Lifestyle creep is one of the reasons why high-income earners also fall victim to the paycheck-to-paycheck cycle. This is where you get used to the things you have and resent having to give them up. For instance, you might consider getting a manicure a rare treat when you are earning an entry-level salary, but it becomes a weekly habit once you're earning more. When that happens, not only do you enjoy the manicure less than you did when you were getting them less often, but you’re also less willing to give them up.

To keep lifestyle creep from eating up your budget, take the time to express gratitude for all the things you have in your life. This will help you recognize all that you already have.

Human beings are wired to feel losses more keenly than we enjoy gains. You feel more depressed at losing a $10 bill than you feel elated at finding one.

Unfortunately, any number of marketers and businesses know this and use it against us. That's why you'll often see financial penalties for reinstating a gym membership that you have revoked. The gym knows you'll hate to pay the penalty for rejoining when you could just keep paying the monthly fee — even though you never actually get there to break a sweat.

But letting loss aversion keep taking money out of your account for a service you don't use is one of the reasons you can't get ahead. Cancel what you don't use, and worry about the fee for rejoining when you're ready to go back. It's likely you won't.

Many financial decisions are not based on a rational cost-benefit analysis. Instead you might make a financial choice to help you deal with an emotion. While everyone recognizes that "retail therapy" is a destructive way of dealing with a bad day, it can be more difficult to realize when you are spending money to relieve other negative emotions.

This is why some psychologists recommend avoiding any big decisions (and spending money counts as one) when you are hungry, angry, lonely, or tired. You are much less likely to make a good financial decision in those states.

In addition, if emotional spending is a consistent problem for you, journaling about how you’re feeling when you get the urge to splurge can help you pinpoint which emotional triggers are likely to make you spend money.

If you believe that your possessions reflect your importance and worth, then you are likely to spend money you don't have to keep up appearances. This kind of mindset makes it almost impossible to get ahead financially, since every penny that comes in (and some that you have to borrow) is needed to maintain the impressive appearance.

If you’re worried that everyone will notice if you downgrade from a Mercedes to a Honda, you need to remember those who are momentarily impressed by your "wealth" don't have to make your ends meet now or in the future — so they don't matter.

It can be difficult to determine the difference between something you need and something you want. While most adults have grown out of the habit of thinking every want is a need, it can be tough to know if you really must have a nicer, more comfortable, or newer version of a basic item that you do need. For instance, your four-year-old iPhone that still reliably makes calls, navigates maps, and connects to the internet may be all you need, but you might convince yourself that you "need" the latest upgrade because it will be faster.

Recognizing when you are imposing your wants onto your needs can save you a great deal of money and help to put an end to the paycheck-to-paycheck cycle.

Dealing with your finances is often stressful; so many people simply put the issue of money out of their minds by deciding that only superficial people care enough about money to pay close attention to it. Not only does such thinking allow you to believe you are "better" than those who track their expenses and learn about investments, but it also gives you a way to do what you want to do — ignore your money.

But your financial issues won't go away just because you're not thinking about them. And they will be that much more stressful once they become big enough that you have to deal with them.

Fear of missing out is the feeling of anxiety that we may lose out on something better than what we already have. You most often see the acronym in reference to experiences — where you’re worried you will be the only one among your friends not going to Coachella or seeing the next Star Wars on opening night. But FOMO can also prompt you to be an early adopter of new technology, for fear of becoming the Luddite who doesn't know how it works.

The problem is that you’re spending money to avoid being left out, rather than on something you want. And it can cost you big to keep chasing the feeling that you're one of the cool kids.

Scarcity is when you have more needs than resources available to meet them. But when you get stuck in a paycheck-to-paycheck cycle, scarcity becomes more than just a phenomenon — it also changes your mindset. When you’re focused on trying to get the next bill paid, you do not have the mental resources available to think about saving for the future or getting out of the cycle.

This is why it’s so important to make savings automatic, so you don’t have to think about it. Start by transferring a very small amount to savings, like $10 per week. This is a small enough amount that you won't miss it. Set up the automatic savings to increase every three months, as you get used to having slightly smaller paychecks.

The world does not often reward your hard work, sacrifices, and difficult choices, so it’s easy to get in the habit of rewarding yourself. You deserve the good things in life, and since they are not forthcoming, you have to buy them for yourself.

But this kind of thinking is dangerous, and not just because it leads to financial instability. You are defining what you deserve as something you lack, which is no way to feel content with what you already have or build a strong financial life. Remember that purchases will feel luxurious in the moment. Ending the financial stress of your paycheck-to-paycheck life will feel far better.

Shame is a counterproductive emotion, and that is especially true when it comes to money. Feeling money shame can prompt you to give up on trying to get ahead, since you have already shown yourself that you’re bad with money, so you might as well prove it by continuing along the same path.

The way to root out financial shame is to admit when you make mistakes or that you struggle with a particular skill. Recognize that you made a mistake, accept that you have learned from it, and ask yourself, "So now what?" That allows you let go of the shame and treat your financial situation as a problem to be solved, rather than a comment on your character.

There are two ways this can reinforce your money struggles. The first is when you believe that living to paycheck to paycheck is impossible to avoid. If you don't believe it's possible to get out of the cycle, you'll never try.

Then there are those who make a comfortable living and use every penny. They assume that they will always earn the same amount and that since they've always been able to handle their finances while living paycheck to paycheck, that they always will. But job losses, illness, and family crises can hit anyone, and if you’re just barely able to handle your finances on your current salary, then you are not prepared for any of these emergencies.

Putting money aside for the future is tough to do when you could be spending it now. After all, it's human nature to prefer an immediate reward instead of waiting patiently for a larger one later. Humans have this preference, in part, because we think of our future self as a stranger who can take care of him or herself.

If you start viewing that future self as someone you want to take care of, you are more likely to prioritize your savings to protect yourself. Ask yourself "Will I be happy in the future that I made this decision now?" to remind yourself that you will be dealing with the consequences of your choices.

Many people who struggle to make ends meet would probably have enough financial breathing room if it weren't for their kids, siblings, parents, friends, or other cash-strapped individuals in their lives they feel obligated to help. If you believe that it's a family's (or friend's) duty to help each other out financially, you may be enabling your loved ones' poor money habits.

Whether the person you’re helping is spending your money on yet another get-rich-quick scheme or using it to get an education, it's important to remember that you are not responsible for bailing out other people, even if you love them. Just like parents on airplanes are instructed to put on their own oxygen mask before helping their children, you should make sure your financial house is in order before offering to give money to loved ones.

This article by Emily Guy Birken was originally published by Wise Bread.