Here’s a step-by-step guide on how to make sure you don’t get into debt this month.
Calculate the money you have
The first step in budgeting to payday is figuring out how much money you actually have.
Watching your bank balance can be terrifying, but burying your head in the sand and ignoring the problem will only make matters worse.
Take the plunge, log into your online banking, and take a long, hard look at how much you need to work on.
Now review your essential invoices, to see what you have left.
There are many budgeting apps out there, and some banks even have their own online or app budgeting features. Citizens Advice also has a full budget calculator.
Use cash, not your debit card
Once you know how much is in the bank, withdraw a set amount for the week.
Using your debit card can be deceptive because it’s easy to lose track of what you’re spending. If you have cash in your hands, it is much easier to see when it is running out.
And once you’ve withdrawn a set amount of money for the week, really try not to go back to the ATM.
Give up luxury
If you need to cheer yourself up, look for free options. Treat yourself to an evening with a good movie and a good bath instead of splurging you don’t have in sales.
It is not because the article is reduced that it is profitable to buy it!
Explore savings opportunities
When you have money, it’s easy to overlook wasting habits.
But when money is running out, it’s time to explore ways to cut back on your spending.
Another option could be to change your gas and electricity supplier. If you haven’t changed in a few years, chances are you have an expensive default tariff. Just keep in mind that the savings will take at least a month to materialize.
It might sound complicated, but those little savings could make the difference between a desperate month and a doable month.
If you have a bunch of things you don’t want or need anymore, why let them clutter your house? Selling items on eBay is a great way to earn extra money. Read How to Sell Successfully on eBay.
Alternatively, you can go to your local garage sale. Check out our guide on how to make a fortune with garage sales.
Don’t look for easy options
It’s tempting to look for shortcuts when you’re having trouble. However, many of the easy options available are too good to be true.
Payday or short-term loans, for example, are not a good idea.
The interest on these loans is usually exorbitant, so while you reach payday, you will have to pay a huge portion of your salary to the loan provider once you get paid.
It could mean that you will fall into the vicious cycle of doing the same thing every month.
Likewise, using bank cards or credit cards may not be a lasting solution.
If you have to buy on credit, make sure it’s on a 0% new purchases card – at least you won’t end up spending a lot of money in interest.
Even then, you should have a plan to cut your expenses in order to meet your income.