If the last few days before payday are filled with anxiety, it may be time to take a look at your finances. You have enough to pay your expenses in the ideal world and set some money aside for savings. Getting to that point isn’t always easy. Salaries often don’t keep up with the cost of housing, and unexpected expenses can wreak havoc with your budget. Putting a stop to the paycheck-to-paycheck cycle won’t be easy. You need to take an honest look at your spending and figure out changes that will make a difference. It may not be much fun, but it will be worth it. Having a safety net provides tremendous peace of mind.
Lower Your Monthly Expenses
Whether you still receive bank statements in the mail or you check online, pull those up so you can look at your spending over the past several months. Highlight all of the utility and housing costs, as those are not the easiest to cut. Now take a look at your other spending. There are probably some prominent areas where you could spend less. Those are the first places to cut.
If you are making multiple stops at the grocery store each week, you are probably overspending. Try making a plan for what you will eat during the week and use it to create your store list. Shop once a week. If you run out of something or forgot to pick something up, make a substitution or do without (within reason). Each time you stop at the grocery store, you probably pick up a few things you don’t need. If you make multiple stops each week, this adds up quickly.
Other methods of cutting expenses aren’t as easy to see. If you have credit card debt, prioritize paying that off. Put the cards away, and don’t use them until you have a zero balance. Adding more to the cards, even if you are making significant payments each month, prevents you from getting ahead. For those still paying off student loans, look at refinancing your student loans with a private lender. A personal student loan can lower your interest rates and extend the terms of your loan. Both of these will lower your monthly payments. A lender can help you run scenarios to see how much you could save.
Build Up Your Savings
It isn’t enough to cut spending. You need to be smart about where it goes. Paying off debt is a priority, but so is building up your savings account. Having money set aside for emergencies is the real secret to stopping the paycheck-to-paycheck cycle. Once you spend less than you earn and have money set aside in savings, you can handle unexpected expenses without cutting into the money you need to pay bills or getting into credit card debt.
Look at Side Hustles
If your budget is still tight after making as many cuts as you can, you may want to consider taking a part-time job. Working for even a few months is enough to build up your savings. As long as you can cover your monthly expenses with your full-time position, you can quit the second job once you build up your savings.