Payday. Your checking account is full. You finally have money to restock your fridge, buy the shoes you’ve been eyeing, or treat yourself to dinner at the new restaurant in town. But if you find yourself running out of money, spending a bit too much on payday, then worrying later in the month how you’re going to pay your bills, you have a budgeting and cash flow issue. You might have to readjust your spending strategy.
Dealing With a Monthly Paycheck
A monthly paycheck can be the mother of all challenges. One way to deal with it is to divide your monthly budget into weekly amounts. Tips : Another option is to set things up, so you pay all your regular bills on or near the first of the month, even if one of them isn’t due until the 18th. Then divide what’s left into weekly amounts to cover discretionary spending throughout the month.
Dealing With a Semi-Monthly Paycheck
If you’re paid twice a month or every other week, you probably have times when you’re barely making it paycheck to paycheck, and times when you have a lot of extra money. The solution is to set aside money from your paychecks when your bills aren’t due to cover them during the paycheck when money is tight.
For example, you would set aside half your rent or mortgage payment and half your utility costs with every paycheck. You can have the money automatically transferred to a savings account, so you don’t see it if you know you’ll be tempted to spend it.
Don’t Forget Your Emergency Fund
Your emergency fund is meant to pay for real emergencies, like job loss, a car repair, or an unexpected trip to the hospital. It allows you to absorb these costs without adversely affecting every other part of your budget.
It’s important to replenish your emergency fund as quickly as possible if you have to use it so you’ll always be ready to handle any disaster life throws at you.
You’ll always be living from paycheck to paycheck if you’re not making enough money. Address any income shortfallings first before you figure out how to budget to cover all your bills and expenses. This income review might mean changing jobs, taking on a second job or income-producing side gig, or going back to school so you can get a higher-paying job in the future.
And cutting back—at least temporarily—can be as beneficial as earning more. Do you have an extra bedroom? Maybe take in a roommate.
When you’re feeling the end-of-month squeeze, of course, you want financial relief immediately. Still, if you begin to implement these strategies today, you’ll see positive change and greater financial ease with each paycheck you receive.