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26 Mar 2019   /   0 comments

How to Make Your Paycheck Last

How to Make Your Paycheck Last

Everyone would like to know how to make your paycheck last. It can be difficult to make it to the end of the month with any leftover. Let’s pretend it is the first of the month and your paycheck has been deposited into your checking account. Now you can buy that brand-new gadget you have become obsessed with or go out to celebrate with a good dinner and a few drinks at a trendy bar.

How to Make Your Paycheck Last

But wait a second before you do either of those things. Try to take it systematically instead. Perhaps it would be logical to the rent or the mortgage first. Have you made sure that you can pay the bills for your phone, electricity, gas, and water yet? That may be important to take care of first as well. Surely, you have a few other fixed monthly payments like a gym membership or the insurance for your car. Look at your bank account after all of that is taken care of instead of before. This way you will have a more realistic view of your situation.

Do you still have a budget for whims? Maybe next month…

It is no secret that most middle-class and low-income families in America are caught in the vicious cycle of living paycheck to paycheck. This is largely because of a substantial percentage – if not all – income made goes directly to cover those monthly fixed expenses, with no margin for saving or covering next month.

It is extremely difficult to handle unforeseen events when you are living paycheck to paycheck, but breaking out of that vicious cycle is possible. In this article, we will reveal five useful strategies to cut costs and stop living paycheck to paycheck:

If you made less, you’d spend less

Now I am not telling you to ask for a demotion, don’t worry. However, it is a good exercise to imagine making less and how you would spend that. You probably wouldn’t starve but you would cut down frivolous spending to adapt to your new economic reality. Wouldn’t it be much more useful to cut expense while you’re still getting the same paycheck?

Although it is much easier said than done, pretending to cut your own salary is really the only solution to stop living paycheck to paycheck all the time. Once you register the (fictitious) idea that you are making less than your actual paycheck, you can start building up a substantial amount at the end of each month. That “cut” can be directly deposited into your savings account and you can pretend it’s not there!

You can figure out how much you can “cut” from your paycheck by first calculating the amount you spend on the most superfluous expenses like meals out, new clothing, or vacations. You can start small and aim to save 10% of your salary. You will find that you adapt surprisingly fast and your life won’t feel horribly different from before the “cut”. As you become more comfortable with the first cut, continue with more every three to four months, and it will become even easier.

Set a budget and acclimate to it

Use a budget planner you find online or one of the numerous smartphone applications out there. They can help you organize and identify your expenses so it will be easier to detect How to Make Your Paycheck Last.

Work to accumulate an emergency fund

Life is full of unexpected surprises. Issues with your house or with your car may need to be repaired, a broken tooth or decay that appears out of nowhere, the flu that may take you away from work for a while or requires special treatment. Emergencies happen all the time. Therefore, you need to know How to Make Your Paycheck Last.

Even if you can only gather up a small amount, it is always important to have some money set aside for those unexpected expenses.

A simple life isn’t a bad thing

The moment you think you can’t – or don’t want to – continue cutting back on your monthly expenses, you should start thinking about what you are doing from a different light. Simplifying your life may make it exceedingly more enjoyable, not just cheaper. Do you like to work out? Maybe you hate the idea of quitting your gym membership but what if you ran outside around your city instead? What if you did yoga in your living room? You could end up learning you like this better than what you were doing before!

Apply this concept to all of your other activities as well and you will see how much you can gain from saving each month. Is it necessary to live in a two-bedroom apartment when you never use the second room? Do you really like to eat out? Learn how to cook and you might soon enjoy that more than going to a restaurant.

In debt? Pay it off as soon as possible

Debts are one of the main reasons that people end up living paycheck to paycheck. The sooner you pay off your debts, the sooner you will break the cycle. Get to work right away on establishing a plan whether short terms or long terms to get rid of all your debts. If you have several debts, pay them down one by one to motivate yourself. You can do it if you set your mind to it. Now you know How to Make Your Paycheck Last!

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