Money Mistake Monday – Depending On Only A Paycheck Syndrome.

Sure, it’s what most people do – they go to work and in exchange they get a check every week or two. Isn’t that what everyone does? That is what I used to do until I discovered alternative income in the last couple of years while I was still at my corporate gig. I used to just go to work, deposit my check, and then spend it on my monthly bills. There was not too much room for anything other than my expenses and a little bit of savings, and I was not making the kind of headway I could have been making had I started working on alternative means of making money a little earlier! Sticking with that “1 job, 1 paycheck” scenario can also damage your finances if you were to suddenly get laid off or fired, like I did when I was working for an internet start-up back in Boston. I went from “fine” to “broke” in no time flat…ah, the good ole’ days. But no more.

In the last couple of years, I have had many opportunities to make extra money on the side. At first I used this money to supplement my income and to pay off my remaining debt, which made my life a lot easier. Once the debt was gone, the money started going into a savings account to be used for bigger purchases like a computer or something like that. But now that we don’t have any smaller purchases coming up, our next big one will be a car for when we move to New Mexico. There is no way we can get by with only having one car out there, and we want to buy a Subaru Outback because it has room for kids (when they come), AWD, and it still gets decent gas mileage. So now, all my alternative income is going straight into the car fund, where when the time is right, we will be putting down at least half of the cost of a new Subaru, effectively cutting any monthly payments in half as well. (or cutting the term of the payments in half) Either way, this money is going to be put to good use, and it did not affect our general finances at all – in fact, it was painless and it was very easy to put it aside!

So if you have been trying to figure out a way to make ends meet and/or save up for that big purchase, start your alternative income plans today. In an upcoming post, I will be covering the different sources of my income and how you can implement some of them into your life, so be sure to stay tuned!

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Comments (10)

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  1. Matt says:

    I’m looking forward to your post on alternative income – I’m fascinated to see how others have done it to learn from their successes and any mistakes they write about.

    Living paycheck to paycheck is a very very slow process of getting out of debt and to a comfortable state. Unfortunately once you’re stuck in it, it can be quite hard to get out.

  2. david says:

    Should have that post up next week Matt, so be sure to look for it. And yes, it is difficult to get out of that “paycheck to paycheck” situation!

  3. Mrs. Micah says:

    I’m still working on getting there. But I’m definitely not in the one-job-one-paycheck situation. Lots of jobs, lots of checks. Which is good!

  4. K says:

    When I lived in the US I worked lots of jobs, had lots of paychecks, and unfortunately and rather predictably, blew a lot of money on- stuff. It took me 8 years if living in France to wrap my head around the idea that I could have alternative streams of income here too, and so I’ve just started doing so, with my blog, my Etsy shop, tutoring etc.
    I’m looking forward to your next post on the subject!

  5. CindyS says:

    Gee, I know that “fine” to broke thing very well. I am somewhat lucky in that I did have a small alternate income and I could change it to full-time fairly quickly but it’s going to take me awhile to dig out of the hole. I will be looking forward to your next post.

  6. […] My Two Dollars continues the excellent Money Mistake Monday series. […]

  7. Patrick says:

    I’ve been working on the same thing, David. I love having a little extra money coming in from various sources. My wife and I plan on having children within a year or two and we will go down to one income. I know a little alternative income will come in handy at that point! I’m looking forward to your next article on the topic! 🙂

  8. david says:

    Look for it Thursday!

  9. […] As I mentioned the other day, a while back I stopped depending on only one source of income and started focusing on making money from multiple sources. While I still have a day job that I do for about 25 hours a week, I realized that depending on only my weekly paycheck could be a recipe for disaster, so I started thinking of other ways I could make money, and this is how I do it. […]

  10. […] knows I have made a number of money mistakes in my lifetime. In the My Two Dollars regular series, Money Mistake Monday, he addresses the issue of relying on one and only one paycheck. I don’t like it which is why […]