Almost 78% of full-time workers in America are reported to be living from paycheck to paycheck. If you find yourself spending your entire paycheck without having any cash left on hand, you’re likely part of this overwhelming statistic. Living paycheck to paycheck is detrimental to your mental and physical well-being, and you must break the cycle. Besides keeping a budget and tracking your spending, here are some other proven ways you can avoid spending your entire salary in one go.
Tackle your debt first
As soon as you get your pay, you should immediately put it towards paying whatever debts you’re able to minimize, whether that be student loans, car payments, credit card bills, or mortgage loans. Avoid letting your bills and debt payments idly sit so that you won’t be tempted to spend your money on something less important. Getting out of debt as quickly as possible will leave you with more money left over every month.
Use the envelope method to deal with variable expenses
The envelope budgeting method is a great system that will help you maintain a flexible budget. All you have to do is set aside several amounts of money for your variable expenses as soon as you receive your paycheck and store them in separate envelopes. For example, there should be one for groceries, one for utilities, and one for gas. Doing this helps you physically keep track of where your money is going to help you avoid overspending. If you notice that you’ve run out of money in one envelope before the next paycheck, it’s time to reevaluate your budget.
Automate bill payments and savings
It’s never a good idea to only save whatever is left from your paycheck. It’s almost impossible to do, no matter how much self-restraint you think you have. The best way to ensure your money will go to the right places is to automate the transfer of these amounts immediately after your paycheck is reflected on your account. That eliminates the temptation of spending it all in one go.
Evaluate your budget
Many times, a paycheck-to-paycheck lifestyle is a result of living beyond your means. Your necessary expenses such as food, mortgage, and insurance are most likely inflexible, but you can always make some changes to your discretionary spending habits. If you can live without it, even temporarily, then you should get rid of it until you’re in a much more financially stable position.
Establish financial goals
The most sustainable way to abide by these changes to your financial habits is to have a good reason behind them. Most people who live paycheck-to-paycheck do so because they don’t have any specific goal to look forward to besides surviving, paying for their necessities, and then some. You’ll be more willing to change your ways if you have a financial goal to reach and a reward for all your sacrifices. That can be anything from buying a new car, traveling to a new country, or starting a new hobby.
Get a hold of your finances and break the cycle of devoting all of your salary to your expenses. These pointers will help ensure that you have something left over during your next payday.