How do you go from paycheck to paycheck and on to some measure of financial freedom?

Put your credit cards away for good

This will be a painful first step, but an absolutely necessary one. Debt is one of the biggest causes of people living paycheck to paycheck. The problem is that you can never achieve balance in your finances if you’re constantly paying for yesterday’s obligations.

That is exactly what credit cards are – they are the cumulative total of old cash deficiencies. Anytime you can’t pay for something out of earnings or savings, if you put it on a credit card, it will haunt you in the future.

You must put a stop to this as soon as possible. It will not be easy to begin learning to live without credit cards, but once you do everything else will begin to fall in place. It may mean that you have to begin learning to live without certain items and expenses, and that’s our next topic.

There is a bonus that comes along with ending your reliance upon credit cards. Once you stop using them, the balance owed begins to drop. And as balances drop, your payments fall as well. This will provide you with additional breathing room in your monthly budget, especially as the declines in your balances become more pronounced.

Trim your living expenses where ever possible

Most people can live without least a few products and services. You can eliminate them without making any material changes in your basic standard of living. This doesn’t mean that you have to take a meat cleaver to your budget, but rather that you carefully scan your expenses for any that are not absolutely necessary.

For example, you can probably ditch a gym membership if you hardly ever go to the gym. You might also cancel your cable TV service if you seldom watch TV. You can also take a close look at your insurance policies and see if there are any opportunities to reduce your premium charges.

Simply reducing your monthly budget by 5%, can free up some extra cash that will help you to stop living from the paycheck to paycheck.

Increase your income, even if only just a little

The same rule applies with income as with expenses, a small increase – say 5% or 10% – in your income could make a big difference. This will be particularly effective if you do it in combination with a reduction in monthly living expenses.

Imagine that you increase your income by 5%, and cut your expenses by 5% – you will have an extra 10% in your budget each month. That should not only allow you extra breathing room in your budget, but it should also allow you to begin saving money.

There are different ways to earn extra money, even if you cannot do it on your job. You could take a very part-time, part-time job. This might mean working extra 20 to 30 hours per month at a second job that will bring in an extra couple hundred dollars. It could also mean beginning some sort of Internet venture, such as running your own blog, freelance blog writing for other sites, or offering technical services to various websites.

Save as much money as you can

Finally we come to the single biggest way to avoid living paycheck to paycheck. If you’re in a position to put money away each month, even just a little, you will essentially be out of the paycheck to paycheck trap. If you can build up even couple thousand dollars in savings, it will provide the foundation to build on for a much larger savings balance as time goes on.

The larger your savings, the less you need to rely upon credit in order to meet your monthly budget. But if you become motivated to increase your savings – as a way of ultimately achieving financial freedom – you may find yourself earning extra income, cutting spending, and reducing your loan balances going forward.

It’s a matter of making a personal decision to go from being a debtor, to being a creditor. When you save money, you become a lender – to the bank, or other institution that is holding your money. It puts you in the reverse situation that you are in now, where you owe money in the form of credit cards or other loans.

At a minimum, having a healthy savings balance will eliminate both the mindset and the fear that creates the paycheck to paycheck lifestyle.

Are you ready to abandon that lifestyle in favor of a better one? You can do it with a series of small changes. Try some of the strategies above and in a few years, paycheck to paycheck will be a thing of your past.

See and Do

Madrid

Most of the plazas are free (because they are a public space) and the walking tours usually take you to all these places. For the walking tour, you can pay how much you like. Usually you give a few euros (sure beats a 20 euro bike or segway tour for the same sights!).

Parque del Buen Retiro is basically a huge park in the middle of the city. It kind of puts Central Park in New York to shame. Madrid’s oldest tree since the early 1600 also sits in the park.

Museo del Prado- a “must-see” if you visit Madrid. There are over 7000 paintings in this museum. ‘Nuff said. If you are a student under 25 (bring your photo ID and student card) you can get in for free. Same if you are over 65. If you visit between 6-8pm on a Monday to Saturday its also free, but expect long lines. Otherwise, it costs 14 euros.

Opera- If you’re under the age of 30, you can score deeply discounted opera tickets if you show up 30 minutes before the opera starts. Like up to 90% off. Romeo and Juliet was playing in Madrid when I was there.

Seville

La Cathedral and Giralda- this is where Christopher Columbus’ tomb is housed. It is one of the largest cathedrals you will ever see. The Giralda (a big bell tower) has been built between 1184 and 1198 by the Moors and it has withstood multiple earthquakes and the test of time. Unfortunately you can’t get in for free but it only costs about 8 euros for admission.

Alcazar- This was built in 1300 and it is beautiful. The moorish architecture is amazing. It is a UNESCO world heritage site. Admission is under 10 euros and is free if you are a child.

Archivo de Indias- This museum houses documents (including amazing maps) during Spains American empire thanks to Christopher Columbus. This museum is completely free and is highly recommended especially since there are usually no line-ups to contend with.

Toro- If you’re in Seville during the bullfight season, check to see if you can score a last minute ticket. Usually you can get one for up to 10-15 euro off the regular price.

Granada

Alhambra- This is a must-see. The Moorish architecture will make you think you’re in Morocco. Book your tickets in advance on the internet because there are only a limited number of tickets during the day. Make sure you make it to the main palace on time because you might not be granted admission if you are late. If you are a member of the EU as a student or as a senior, your tickets are discounted half off. Pick up your tickets at the Alhambra, you will need the credit card you used and it will spit out your ticket (fancy Ticketmaster in Spain). You can check out the garden area for free if you enter through the side (one stop prior to the main entrance when taking the bus).

Barcelona

Barcelona deserves a blog post of its own so check it out below.

Saving Money in Barcelona

Eat

Tapas, sangria, and tinto de verano! What more can you ask for? Food isn’t really cheap in Spain. Stay away from the touristy areas. Opt for menu de dia if you’re hungry for set menus that are usually a better bargain than ordering things a la carte. Usually includes an appetizer, main course, drink, and a dessert! Oftentimes, tapas organized by the hostel tour agencies are a pretty good deal, you get a drink and two tapas for 8 euros.

For example, for a 10 day trip to Spain, my total trip cost:

Flight, Trains, and Buses $1498.82 (most of the cost was the $1200 flight)
Accommodation $331.04 (for 10 nights)
Food $200.29
See and Do $62.61

Total: 2092.76 (10 days of fun in Spain!)

I also spent a ridiculous amount (maybe $250) shopping.  Zara and  Mango.  ‘Nuff said.

Readers, do you have any other tips on how to see Spain on a shoestring?

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I would like to increase my exposure in my portfolio to utilities. I currently only have Fortis (tried, true, and trusted) and Just Energy (not so trusted, one of the dogs in my portfolio) and both of these comprise almost 12% of my TFSA portfolio. (I haven’t done this yet, still on my to do list)

I may also consider adding a REIT as well. Which REIT is your favourite? I am wary that they seem a bit overpriced at the present moment. (still on my to do list as well!)

I know that Suncor increased its dividend but I haven’t changed my spreadsheet yet- I need to do do this.

Hopefully during my school break I will get a chance to look more closely at what equities or ETFs to purchase <— obviously did not happen as I was too busy eating tapas and olives on my school break.  Now back to work!

Here are some things you can try for saving money in Barcelona :

Stay

Hostels are again, a great way to save money. I stayed at the Casa Gracia near Diagonal Metro station and other than the uber-modern interior design, the other great thing about it was the full-on free full breakfast. Coffee, fruit, juices, ham and cheese, bread, cereal, you name it you got it. It cost about 20 USD a night for a mixed dorm bed. It wasn’t in the central part of town but a quick 15 to 20 min walk (or a two stop metro ride) got you to Plaza Catalunya, which is the central hub of activity of Barcelona.

This hostel had a free walking tour arranged by the Walking with Architects group (a bunch of architect students doing this on the side). The guides give good recommendations for “must-see’s” and must-eats.n Also, their passion for architecture (for a Gaudi architecture rich city) is nice to see!

Related: Travel on the Cheap- Backpacking and Hostels

Eat

Staying away from Las Rambla, you should be fine. Otherwise, expect to pay 18 to 22 euros per person for a bunch of tapas and some drinks. La Rambla can be counted on to have restaurants open late in the night though, especially on Sunday evenings when a lot of things close early.  Also, you don’t need to tip in Spain!

Related: Travel on the Cheap- Exotic doesn’t Always Mean Expensive

Getting Around

Barcelona is easily accessible around town by foot (think 15 to 20 minute walks and sometimes more) but get a 10 ticket pass from the Metro station. The 10 ticket pass costs less than 10 euros and gives you 10 rides. Otherwise, paying for them separately costs 2 euros each. The “T-10″ is a better deal than buying a 1-3 day tourist metro ticket. The bus to the airport costs about 6 euros. Skip the 22 euro taxi! The T-10 works on the city buses and the metro.

Related: Top 10 Tips For Avoiding Travel Trauma & Saving Money

See and Do

La Sagrada Familia- Showing your student ID with photo identification saves you a few euros off the admission price. Unless you want to pay another few euros to wait 1 hr to go up the elevator to see views of Barcelona, you don’t need to add this to your admission.

Tossa de Mar- A 22 euro bus ride gets you to Tossa de Mar, which is part of the rugged Costa Brava coastline. You can go to the Arc de Triomphe metro station and the bus station is across the street. There are roman ruins, shops to meander throw, and a beautiful sandy beach with turquoise water to enjoy. They even have a glass bottom boat should you want to venture out to explore the ocean. There are a lot of tourists but it can be nice to get out of the city for a bit. If you’re going to enjoy the seafood, expect to pay 10 to 15 euros for a menu of the day including appetizer, main entree, drink, and dessert.

Museo de Picasso- On Sunday evenings from 3-8pm this museum is free and houses some of Picasso’s earlier works, including some stuff from his Blue Period. You save 11 euros! Go at around 6pm because that’s when the line isn’t too bad. Expect to wait about 30 to 45 minutes if you go at this time.

Parc Guell- More Gaudi, this beautiful garden landscaped park is currently free, but they are thinking of charging an admission price for this in the coming months. So enjoy it while you can!

La Rambla- One of the major tourist streets. Watch your bag. Free to stroll of course but it’s kinda overrated.

Montjuic- The views are beautiful from here and best of all the views are free!

As you can see, Barcelona can easily be done in a few days but if you really want to enjoy the city you should definitely stay for more because there’s a lot for everyone to see and do. Since the Canadian dollar is doing quite well, it might be a good time to visit Europe. Remember to use a credit card that doesn’t charge you conversion fees!

Readers, do you have other tips on how to see Barcelona on a Budget?