7 Life Changes That Could Save You From “Just Scraping By”

At first, Brian Carter’s move to South Carolina seemed like an extreme measure to take in order to fix his finances.

After all, on the surface, he had a great life. He was living in sunny San Diego, he was married to his true love, and he had a flexible work schedule as a freelance digital marketer.

The catch, however, was that his income fluctuated—a lot.

In 2007 he hit a dry spell and wasn’t generating steady revenue. His wife, Lynda, took on 50- to 60-hour weeks as an acupuncturist just to cover the day-to-day bills—and with the weight of the household expenses on her shoulders, she was starting to feel the strain.

“She got to a point where she needed to confront me and say, ‘You’ve got to do something—this is too much work for me!’” Carter, 41, recalls.

While on the job hunt, he found a promising gig as the director of search and social marketing at an ad agency. It paid in the low six figures, and the professional opportunities were right up his alley. The hitch? It was in Myrtle Beach, SC.

The decision was tough, but Carter and his wife ultimately chose to make the move to lower their cost of living and ease their financial stress.

“It was hard to put all the stuff in the truck and drive away,” he says. “But it turned out to be one of the best things I’ve ever done.”

Not Living Large—and Not Making Ends Meet

When you hear stories about friends or relatives who’ve had to downsize their homes, take a second job, or move cross-country because of money, the assumption is that an acute case of “living large” is the problem.

But that’s not always the case. Even if you think you’ve done everything right, sometimes juggling your bills, living within your means, and having enough to put toward future financial goals can feel like a pipe dream.

“If you’re living a lifestyle where all you have is money to pay bills, and you’re not even able to eat out every once in a while, that’s not going to be sustainable in the long term,” says Chris Pimpo, a CFP® with LearnVest Planning Services. “Most likely, you’ll end up turning to a credit card to make purchases in the future.”

And when that happens, smaller budget moves—like cutting out cable or brown-bagging your lunch—may not free up enough income to help you reach your goals.

If that sounds like your situation, you’re not alone.

“I’d estimate 25% of my clients need to make just minor budget adjustments or cut back on discretionary spending, but 26% to 50% need to make more substantial changes,” Pimpo says, referring to changes that could impact your lifestyle.

So how do you know when you’ve hit that point?

For starters, Pimpo suggests adding up all of your fixed costs—expenses that don’t change much from month to month, such as your rent or mortgage, cell phone bills, utilities, or child care—to see how much of your budget they consume.

“When your fixed costs exceed 60% to 70% of your income, and you have just enough income to cover your living essentials, that’s when we have to look at making a big change,” he says.

Another telling sign: You haven’t been able to devote even a small percentage of your income for important financial goals, like retirement or emergency savings.

7 Big-Picture Life Changes to Consider

There’s no single solution that makes sense for everyone when it comes to figuring out what type of lifestyle change to implement to help get your financial life on track.

Some people may find ways to boost their income; others may take a deep cost-cutting route. In either case, the goal is the same: Improve your household’s cash flow, so you’re doing more than just treading water—you’re actually moving forward on long-term financial goals.

So we asked Pimpo to share some of the strategies he sees people most commonly implementing. Although they may seem intimidating, they can have a significant impact on how much cash is flowing into—and out of—a budget.

1. Negotiate a Higher Salary

Find out if you’re getting paid what you’re worth by doing research through sites like Glassdoor or by asking colleagues what they’re seeing salary-wise. Then come to the negotiating table with those numbers in hand, as well as a list of the accomplishments that can help make your case for a pay hike.

2. Switch to a Higher-Paying Job

If prospects are scarce that you’ll land a pay raise, your next plan of attack can be to search for a better-compensated position—just make sure to look at the benefits being offered, as well as the salary.

“You may get a $5,000 to $10,000 a year income boost, but if the new company has a lower-tier health benefit—and you end up paying $200 extra a month for health care—or there is no 401(k) matching plan, those are huge factors [that could affect your finances],” Pimpo explains.

So once you have an acceptance letter, ask the company for all of the specifics on its benefits package, too, so you can gauge what the impact will be on your overall financial picture.

3. Get a Second Job

One key to this strategy is to find a side gig that will fit your schedule and help maximize your income, says Pimpo. In other words, don’t choose a part-time job that sucks up all of your free time, with little to show for it in income.

You should actually enjoy what you’re doing, as well as further your skills. “So find a second job that you love, like working for a nonprofit—or maybe the job is in a field that you’ve always wanted to work in,” Pimpo adds.

4. Discuss Having a Stay-at-Home Parent Go Back to Work

Transitioning to a two-income household could help significantly, but only if the new income isn’t dedicated to simply offsetting child care—so do the math to see where you net out.

You could also look for jobs that are flexible with your schedule. “Can you design websites? Be a writer? Teach music? Maybe you can do some contract work, or find a job on the weekends that brings in an extra $500 a month,” Pimpo says. “You want to balance [the work] with your marriage and family.”

5. Move to a Cheaper Home

Before you pack—and book costly movers—figure out what the trade-offs might be for downsizing to a less expensive house.

If, for example, you have children, saving $100 a month may not be enough of a trade-off for pulling them out of a good school district. On the other hand, if you could save $300 a month, and the sacrifice is short-term—perhaps the children will go to the same high school, anyway—then it may be worth it.

Also, keep in mind that downsizing will be easier if you rent versus own, says Pimpo, adding that you could figure out the net benefits of leasing elsewhere and renting out your home to cover the mortgage.

6. Take in Roommates

Finding someone to split your household costs could be a short-term sacrifice that helps free up a decent chunk of your budget. “If you just started off in your field, you’re living in an expensive place like New York City, and you’re expecting a good salary adjustment in the next couple of years, this might be a good move,” Pimpo says.

However, if you own your home, check local laws to see if it’s even legal for you to rent out rooms, including “squatter” laws that may make it hard for you to evict a tenant who isn’t working out.

7. Relocate to a Cheaper Area

Relocating is, truly, a big move, because of the uncertainty: How much will it cost to move? Will I be able to sell my home? Are there job opportunities?

All of these factors should be part of your decision, says Pimpo.

On top of that, consider doing a careful cost-of-living comparison to see how your two cities compare when it comes to housing expenses, utilities, taxes—and salaries. “Just because you’re making $85,000 in one city, doesn’t mean you’ll be making $85,000 in another,” Pimpo says.

Hard Facts, Hard Choices—Brighter Future

What may be even tougher than implementing any of these changes is coming to the realization that they could be beneficial—perhaps even necessary.

What can help, however, is basing your decision less on how you feel and more on what the numbers tell you.

“Just because you desire to have a certain income or lifestyle doesn’t mean you’re entitled to it,” says Les Szarka, a CFP® and author of Money Brain: How Your Subconscious Mind Can Hijack Your Investment Decisions.

But literally writing numbers down can help you face reality, because you can’t ignore what’s staring back at you in black and white, he adds.

For example, jot down how much it costs you to live your current lifestyle, “then ask yourself, ‘Can I actually afford this?’” Szarka says. “[If you can’t], then ask yourself, ‘What are my potential solutions?’ You have to be brutally honest with yourself.”

Facing the cold, hard truth was what spurred Carter to make his move—even when it seemed like the wrong thing to do. He was relocating to a place where he had no true desire to live, plus he and his wife lived apart initially while he made the transition.

But his new job paid more than he’d ever made before, and it helped his career skyrocket. Carter, who now lives in Charleston, eventually went on to run his own consultancy and is the author of several business books, including The Cowbell Principle: Career Advice on How to Get Your Dream Job and Make More Money.

“[The Myrtle Beach job] gave me a chance to speak at conferences as a thought leader, and eventually it helped me get clients after I left that job,” Carter says. “Both that and my subsequent work have led to a much better income, and we’re now saving for retirement. And Charleston is our new favorite city—we’ve got a great lifestyle, with lower costs.”