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Despite our best efforts, sometimes we find ourselves scraping down to the last dollar by the time payday rolls around. It’s not like we are necessarily intending to skip the savings, but by the end of the month, we are just surviving!
While some people may actually be living on pennies, many of us are caught in a cycle of living paycheck to paycheck. Without much left in savings, one missed or lower paycheck could set our entire budget off!
Here is what to do and how to budget while living paycheck to paycheck.
Make your savings automatic
When it comes to savings, you don’t want to be saving what you have leftover but spend after you’ve saved.
When looking at your budget, determine ahead of time how much money you plan to put towards your savings goals. Once you’ve done this, set up automatic drafts in your bank account to make your savings automatic. Once payday hits, your savings will be drafted and you won’t have to think about it.
You can pull this out in cash as well if you don’t want to use another savings account.
Live below your means
If you don’t want to be so strapped for money at the end of each month and have room for savings, you need to learn how to live below your means.
This might mean having to lower some of your bills in order to have the money available to live below your means. Look at each line item in your budget and ask yourself if there is a way for this amount to be lowered.
Call up your billing companies, cancel subscriptions, and look for areas to trim your budget to help you live below your means.
Revisit your budget EVERY month
Budgeting isn’t a set it and forget it system. You need to be working toward your savings and adjusting your budget every month.
Months where you are traveling, you may need less grocery money or more money in your fun budget for birthdays. It’s important to revisit your budget each month to see if any changes need to be made, and where you can find additional savings.
If you sign up for a new service or pay off a debt, this can drastically change your budget and you want to account for those changes.
Take care of your basic needs first
When living paycheck to paycheck, you may need to focus on covering your basic needs first.
This means you need to think about when bills are due as well as what you and your family truly need to make ends meet. It may require you to cancel your cable bill or even decrease your data package.
Take care of your basic needs first and make sure that you are getting through the month will all of your bills paid before you look at extra spending.
Living paycheck to paycheck doesn’t have to be the way you have to live. If you follow these tips, you’ll be back on your feet with more to spare at the end of each month.
Which of these tips would you say works best?