Ever walk our of a supermarket penniless weeks from payday?
Well, you are not alone – this highly stressful situation plagues many of us in the world today. Loans seem to be the only way out – but they are so troublesome to pay off. And those loans often accumulate to bankruptcy.
Thankfully, this situation can be avoided all together. With careful spending strategies, it is completely possible to avoid running out of money between paydays. What you have to do is to initiate them starting on every payday, and follow them through to your next payday. In other words careful consistent smart spending will keep money in your pockets. Below are some methods which will help your bank account stay in the green zone.
Before Spending
One of the greatest threats to your wallet is compulsive spending. Spending too much on items that you do not need, then not having enough money to spend on what you do need. Victims of compulsive buying can easily spend their entire pay check in one day. However, a remedy to this malady is budgeting. When you get home from payday, before taking out any money, plan your spending. Write out what money you have. Then figure out what periodic payments that you must make (like mortgage, taxes and utility bills). Subtract that amount from what you have earned. The remainder is what you have to live on until your next payday.
But don’t just stop there. Separate and categorize what money you have into columns indicating what they will be spent on. For example, you may have one column for food, and then one column for movies. But at the same time, I am not advocating a Spartan lifestyle. Make sure to put money in for entertainment and luxuries. Just make sure that you have enough money in the columns for necessities (like food), and that your budget doesn’t surpass your earnings. Lastly consider time; think about how long you have to last with the money that you have. That should give you an idea on just how much money that you can spend each week. The important factor now is to follow your budget. If you don’t, then making your budget was useless, so you have to motivate yourself.
But how do you motivate yourself? Think of what you will get by following your budget. Set goals, for what you want to accomplish by making a budget. Even if it’s merely not having to loan money from banks, if you envision yourself achieving that goal, it can help you stick to your budget. Additionally, you can reward yourself by using the money in the entertainment and luxuries section. The important factor is to dangle an incentive in front of yourself, and you will follow that incentive.
During Spending
Now that you have staved out compulsive buying by careful planning, you can try to reduce what you have to spend. I am not proposing that you don’t buy food or anything of that sort, but instead try to find cheaper ways to buy what you need. This frees up extra money for savings and for your own luxuries.
One way that you can increase the amount of money that you have at hand is by paying off loans ASAP. Loan charge interest which means that the more time that you spend paying off your loans, the more money you will have ton pay in total. Additionally, loans are often paid in installments, which mean that it takes a considerable amount of money off of each of your pay checks. By paying off the loan, you are free from paying off installments in the future, providing you with more money to spend. It may be difficult to pay off some loans, especially mortgages, but by increasing the amount of money that you pay in each installment, you can get rid of the loan much faster. Additionally, the total money spent paying off the loan is drastically decreased.
Another good method to save money is to go shopping once a week rather than every day. This saves gas money, as you only have to make one trip. Additionally, you are around merchandise for a far shorter time, so there is less temptation to submit to compulsive buying.
Also keep in mind that price is not necessarily an indicator of quality. Just because a box of food has a more expensive brand does not always mean that it is better than a cheaper brand. When buying, try out some of the cheaper brands. You may find that you like some of them, and in the process save up a lot of money. The philosophy here is to find ways to save money while buying the same amount. To pay less for more. Discounts, or buying fresh products over processed products are another good way to save money. The possibilities here are endless.
Another Consideration
However, life is very chaotic. Even if you follow all of the above mentioned steps, your plans may fall apart when life throws you a curve-ball. Accidents, sudden illness, job loss, and more are all ways in which you can easily find yourself out of money with no payday in sight. While these events cannot be fully protected against, you can prepare and increase your chances of getting through such turmoil in one piece.
Many of the above-mentioned events bring both emotional and financial trauma. While under emotional trauma, it may be difficult to even think about the financial mess. Under such circumstances, having a nice reserve of money can make your financial problems disappear. Such a reserve of money can take years to build. However, despite the time that it takes, it is quite easy to build one. Simply save a little bit of each pay check, and eventually you will have amassed a large amount of money. If a crisis occurs, then your savings will help ease the burden. On the other hand, if no crisis occurs, then you can spend that money for your own enjoyment. How about traveling out of the country?
Making your money last from payday to payday may seem like a challenge, but it can actually be very easy. Make a plan and stick with it. Then try to get products for cheaper prices. Increase the amount of money that you have to spend by getting rid of loans. And lastly, keep some money stored away for a rainy day. Follow these steps consistently, and they will be integrated into your habit. Better yet, you will most likely never face another week without money in your pocket.