If you’ve ever found yourself desperately waiting for payday just so you can continue to function and survive, well, you’re not alone.
In fact, a 2014 study found that 1 in 5 Australians had little or no money left at the end of their pay period.
Obviously, this isn’t a situation that anybody wants to experience, yet some people feel as though they can’t get out of the financial cycle they’re stuck in. They get paid, bills come in, they spend and spend, then there’s nothing left. But it is possible to get out of this habit, to make changes in your life that will see you with more financial stability, and even financial freedom.
It starts today…
1. Recognise The Problem
The first step in dealing with a financial situation like living pay to pay is to recognise the problem and figure out what it stems from. In most cases, there’s really just two choices. Either you spend too much money, or you don’t make enough money. Actually, for most people the issue is related to both. So what can you do? If your job isn’t paying very well, and you think you might be able to get a better one, start to look around. Or, talk to your boss about a possible promotion, and mention your money problems. If you know you’re spending too much, then recognising that is the first step to stopping it and getting back on track with your money matters.
2. Match Your Money To Your Life
It’s a hard thing to come to terms with, but not everyone is rich enough to have everything. In our society, the idea of ‘Keeping Up With The Joneses’ often means we feel pressured to spend money, even if we don’t have it. So do yourself a favour and don’t fall into that thinking trap. Instead, take some time to think about your lifestyle, how much money is available, and the lifestyle you can afford. It can be a harsh reality check, but if you want to lessen your financial stress it’s absolutely necessary.
3. Track and Budget
Of course before you can start to make changes to your spending habits, you’ll need to understand them intimately. Take a month (or a single pay period) and keep a spending diary taking note of every single item you buy (no lying) and every bill you pay. Tally it up daily, weekly, fortnightly and monthly to track what you’ve spent from the money available. Using this spending diary you’ll be able to see more clearly where you’re spending money, and get a bit of a motivational boost to spend less. For example, by seeing how much you spend on takeaway food in a month, you might feel more likely to cook cheaper at home.
4. Shave Your Expenses
When it comes to saving money, to ensure there’s more at the end of your pay period, the first thing that you’ll need to do is look at all your regular expenses. From these, what can you shave away. Do you buy two cups of coffee a day? Make them at home, or bring a thermos to work. Do you get your haircut at an expensive salon? Go somewhere more affordable. These expenses might also include expensive subscriptions to magazines, or memberships at gyms. If you’re strapped for cash, all of these represent potential savings.