Escape The Pay Cheque to Pay Cheque Cycle
Do you hold out for payday each week, down to your last dollar with no money left to spare? Like many other Kiwis, you may be stuck living the in the pay cheque to pay cheque cycle. Although living pay cheque to pay cheque is fairly common, it is not a lifestyle that leads to financial success.
There are a number of steps you could take towards breaking the cycle and saving for your future:
Determine whether you are living within your means
To determine this you must track all your spending; analyse your statements to see exactly what you spend every month and include an average for all your miscellaneous expenses. Compare your expenditure to your monthly pay; are you spending the same or more than you are earning? This will show that you are spending outside of your means and if it’s time to trim down your expenses.
Trimming expenses Trimming your expenses involves cutting out any unnecessary costs you see in your monthly statements. This could include:
- Eating out
- Gym memberships
- Beauty regimes
Cutting out such expenses can save you a huge amount. Once you have cut out unnecessary expenses you can create a new budget.
Prioritise your spending
You should not be saving what is left over. Spend what is left over after saving and paying your necessities. Calculate an achievable amount of savings to put away when you first get your pay cheque.
Next, pay necessities such as bills. When it comes to debt, be sure to pay your high interest debt first and allocate the most money towards it.
Your budget should leave you enough left over for other expenses until your next pay day.
Work as a team
Make sure you involve your partner and other family members, keep them up to speed with the new budget. This way they will understand that you often do not have enough for extra expenses.
Get them involved with money saving habits including buying lunch less often, using public transport or simply turning power sources off around the home before they go out. Using team work, you could notice a huge difference in your family’s expenses.