Do You Find it Hard to Keep Track of Your Many Payments?

You’ve heard the common phrase, “Living paycheck to paycheck”. I would submit that for most of us it’s not the paycheck that’s the problem. It’s on the other side of the balance sheet where we get into trouble. You see, we’re living payment-to-payment.

Related: The Payment Syndrome is Real, and How to Combat It.

It’s not a new thing. In fact, it’s been around for quite a while. And yet, when we have financial hardship we far too often focus on the income side of the equation. And we blame “the man” for our troubles and holding us down, when in reality, it’s our living payment-to-payment that’s the real culprit.

How Can You Tell if You’re Living Payment-to-Payment?

Just do a quick check. What do you spend your money on? I’m talking specifically about your bills. Everybody has to eat and put gas in the car. And you also probably have rent/mortgage and utilities (electric, water, cable, etc.).

Then there are the other bills: debt repayment bills. These are the ones I’m talking about. There’s this credit card and that car payment. There are student loans and home equity lines of credit. You may even have personal loans or payday loans.

If all those bills add up to or exceed your monthly income, then you my friend are living payment-to-payment. You may also be living payment-to-payment if you have very little margin in your monthly budget due to your balanced portfolio of debt payments . . . your little black book of debt, if you will?

You are working hard just to keep making those payments. You can’t really do any different. Not if you want to keep your stuff. You dug yourself a hole, and climbing out is hard.

You’re tied to your job, because you have obligations to meet and stuff to buy.

Are you caught in the payment-to-payment cycle? Are you paying for things today that you bought yesterday? Click To Tweet

How Did this Happen?

Your payment-to-payment lifestyle didn’t happen overnight. And it certainly wasn’t intentional. And that’s the problem. Instead of being intentional with your money, you were more footloose and fancy-free.

You took notice only of the payment of those things you now almost own (after a few more payments). Instead of taking your time and applying some simple math, you simply asked, “What’s the payment?”

You could have multiplied the monthly payment by the term and compared that to the total cost. You would have been shocked at the difference. Thousands of dollars extra for a new car?

But instead . . . only $XX/month? Sure! Sign me up.

You were thinking short term. You bought the car on credit, and moved on with your life and your $400 payment. And if that was it, it might not be so bad. Cars always go down in value, and they wear out. Nothing new here, but every few years you’ll need a new car. So you’ll always have that payment in your little book of payments.

Not only the car, but there are other payments added to your payment portfolio. You had to pay for your liberal arts degree with student loans. And the payment for that degree? How does $500-$1000 per month sound?

Add to that credit cards and of course a home equity loan for those granite countertops and stainless steel appliances.

Before you know it, your payment portfolio is well stocked with a myriad of outgoing money each and every month.

Why is the Payment-to-Payment Lifestyle Bad?

The average income in the US is somewhere in the high $50k’s. And while this is not earth-shattering by any means, it certainly allows for a comfortable life with a few luxuries here or there.

But it’s insanely difficult while you’re carrying around your payment portfolio. All your margin is taken by debt payments. And you have little to no money left for saving. And you can’t even think about investing for retirement.

Your stress level is through the roof. Your job is of the utmost importance, because if you lost it . . . Well, we don’t even like to think about that. But all that stress creates conflict at home and at work. You don’t feel like yourself, but you don’t know what else to do.

If you spend any time on social media, you feel deprived and taken advantage of. Your life can’t compare to that. It can be discouraging.

In short, your life sucks. You work hard just to keep everything from falling apart. And from the outside, your life may look great. But you and I know different.

How to Break free of the Payment Cycle.

1. Change Your Attitude.

The prevailing attitude of those trapped in the payment-to-payment life is one of entitlement and “I deserve this”, at least at first. Once you get caught in the cycle you realize how destructive it it. But by then it’s too late, you’re already trapped.

If you catch yourself thinking “I deserve this”, just pause and ask yourself these two questions:

  1. “Am I getting caught up in lifestyle inflation (or Keeping up with the Jones’)?”
  2. “Would I still buy this if I had pay the entire purchase price today?”

If your answer to the first question is ‘yes’, then you need to walk away. Buying stuff as a status symbol will never enrich your life.

And if you answered the second question with a ‘no’, then you either don’t value the item as much as you thought or you can’t afford it.

Instead of responding with an “I deserve this” while you’re thinking about what you don’t have, try this. Dwell on the things you do have. Be grateful for the things you already possess. An attitude of positivity and thankfulness goes a long way.

Remember that you’re breathing, you have clean water, and you ate today. Sometimes it’s just the little things.

2. Change Your Thinking.

Another reason people fall prey to the payment-to-payment lifestyle is based on the payment. They think they can afford it. And maybe you can afford whatever it is you’re considering. But you need to evaluate it in terms of the total cost instead of just the payment.

Always think about things not in terms of their payment, but in the overall price and compare that to your budget or savings.

Let me give you an example.

Let’s say you went to a car dealership to buy a new-to-you-used car. The purchase price is $16,000. Ideally, you would pay cash for the car. The total price would be your price, and you’d drive home in your new car.

But you don’t have $16k, so you need to finance it. You can finance the $16k at 4.74% for a term of 3 years. Your payment is only: $478/month.

Hmmmm. That’s a little steep. The sales guy asks you what you want to pay per month. You were thinking somewhere between $300 and $350 per month?

He, of course, says no problem. They’ll try hard, but they think they can make that work. He goes away, and comes back a few minutes later with a comforting smile on his face. He says, we got the payment down to $315! The terms are 60 months at 6.74%.

And without thinking, you sign on the dotted line.

What just happened? Let’s break it down.

Initial Price – $16,000

Initial Financed Price – $478 x 36 months = $17208

Financing is always more expensive in the long run.

Your Price – $315 x 60 months = $18900

Your monthly payment decreased only because the term stretched out to 5 years instead of 3. And they upped the interest rate just because you’re financing though the dealership instead of coming with your own financing.

Know that your payment can be whatever you want it to be. The term and interest rate will be adjusted until it matches your number. This is absolutely the most expensive way to buy anything.


So many of us are living payment-to-payment. We are trapped in this vicious cycle of paying today for things we bought yesterday.

The only way to break out of this trap is to adjust your attitude and thinking. Evaluate purchases based on the total cost, and not simply on the payment.

Learn to be grateful for the things you do have so you’re not always wanting more.

If you can stop the payment-to-payment lifestyle, your stress will go down and life will get better . . . trust me.

Are You living payment-to-payment? What are you doing if anything to break free?

Let me know in the comments, and as always, thanks for reading and sharing.


Chris is the original Cash Dad. He's a father of 3 and a mechanical engineer by trade.

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