Stop living pay cheque to pay cheque
Planning
21 March, 2018 - 09:41 AM GMT

Stop living pay cheque to pay cheque

Why do so many of us have to live from one pay cheque to another?

Having to borrow money from people who never really want to lend it, take out loans, or use credit cards to cover expenses until the next payday is a horrible way to live. It’s also very easy to accumulate credit card debt. However, the more debt you collect, the higher your minimum payments become. You can risk having to borrow even more to keep things afloat.

Want to get off the just-making-it by merry-go-round? Here are some useful tips:

 

  1. Create a realistic budget

A good budget will help you plan how to navigate your income. Creating a budget ensures whether you have enough money for life’s necessities. If all of your expenses fit within your budget, then your income should be enough and your spending is the major issue.

 

  1. Cut expenses

This process involves some realistic lifestyle changes. You need to figure out where you are spending the most money. For instance, if you purchase a coffee every morning before work, consider investing in a thermos and making coffee at home to take with you or swapping coffee for water or tea you can easily make at work. Bonus: this is environmentally friendly.

Avoid automating your expenses. It’s all too easy to commit to small but regular costs. Although it does add up so always calculate what something will cost on a yearly basis before committing. Also, ask yourself, do you really want and need it?

 

  1. Program your savings

It is always best to get payroll to transfer a part of your income into another account each pay. If you are paying off debt, make this an additional payment that you can make above the minimum repayment. It will most likely go out of your pay without you realising. So there’s less chance of you spending that money.

 

  1. Live below your means

If you are in a relationship, aim to live on just one partner’s salary. Instead of spending all the money you earn, consider banking the majority of your income and seeing how you do. You may have to sacrifice certain things but it will be worth it in the long run. Other easy ways to reduce spending are eating fewer meals out and going shopping for groceries in bulk. Also, try not doing a big food shop once every four weeks and use this time to use up what you have. Take in leftovers for lunch and invite friends over instead of going out.

 

  1. Set goals

It’s not easy cutting back when you are used to a certain lifestyle. But it comes down to setting goals and being clear about what’s really important. If owning a car or a home is the most important thing to then you need to identify where it is that you need to cut back on. Are you spending more on what you ‘want’ rather than what you ‘need’? Get clear on what’s really important and stick to your plan. Setting up a budget and paying attention to your spending will help you get back – and stay – on track.