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If you’re living paycheck to paycheck then you know it’s an incredibly stressful way to live. And chances are, some months you have to go into debt to manage your expenses. This debt can get out of control and before you know it you’re in over your head. If this sounds like you then keep reading!
You might be surprised to know that a few changes to your cash flow can make a huge difference in your life.
How to Save Money When Living Paycheck to Paycheck
1. Create a Budget with Dates and Deadlines
If you don’t have a budget, make one right now! A budget will quickly show you where you’re spending your money and where you might be able to save money and make cuts. When you are living paycheck to paycheck you need to make sure you have money coming in when payments are due.
When creating your budget when funds are tight, you want to create one that lists when your income is received (when do you get paid?) and when your bills are due. This simple step will help you see when you have money coming in and when it’s going out and adjust accordingly.
Start right now on a simple sheet of paper or use the free budget printables below. Make sure to get the dates accurate because that’s what will help you to stop living paycheck to paycheck.
2. Change Payment Dates
Using the dates on your budget, you can begin to see when you have money in your account and when you don’t. This is important and it can help you save.
For example, imagine you get paid on the first and your bills aren’t due until the 20th, that leaves you twenty days to spend your money and by the time the 20th rolls around you don’t have enough to cover your bills (sound familiar?).
Change your dates to better match your paycheck dates. If you get paid on the first, set your bills to be paid on the fifth. And if you can’t change your payment dates, pay the bill ahead of time or set the money aside in a separate account so you don’t spend it.
3. Cut Out Luxuries
If you’re often over budget, cut out your little luxuries for a few months (lattes, nails, eating out etc.) You may find that you never really needed them and don’t miss them or you may miss them eventually but right now you cannot afford them!
This accomplishes two things. It helps you see what luxuries are really worth your money and which ones aren’t. It also helps you get caught up with your debt. When you’re back in the black, you can begin to add a few important luxuries back into your budget but until then stay focused.
4. Cut your Grocery and Personal Care Spending
As you go through your day, figure out what items you can live without. For example, I stopped buying paper towels and switched to a dish towel. I also started waking up a little earlier and making my coffee at home and bringing it with me on my commute. Simple changes like this can really add up over time.
By implementing a few saving strategies you can save a lot of money on your groceries and personal care items.
I also recommend you check out my post on getting free stuff at your local drugstore. I show you how you can get free products like toothpaste and mouthwash. This will free up money in your budget to put towards debt and savings.
5. Reduce your Bills
Bills like cable and cell phone are easier to reduce because of the number of options and add-ons on these plans. Take a close look at all of your bills and see what you can remove and also make sure you are not getting charged for things you don’t use. Don’t be afraid to call your provider and ask for a discount! I have called Verizon many times to do this and usually get something each time for being a loyal customer.
Have a cable box in a guest room you never use but are paying for? Have movie channels you hardly watch? What about too much data on your cell phone plan? Look over your bills very carefully and you will be surprised what you find.
You can check out these articles to learn how to reduce specific bills:
6. Create an Emergency Fund
Finally, create an emergency fund. You may be thinking how in the world do I do this when I am living paycheck to paycheck? But you need to make building an emergency fund a priority. Check out how to build an emergency fund fast to get some tips on how to accomplish this.
You want to have at least $1000 in your emergency fund even before you pay down any debt. Do it anyway. If you can only save ten dollars a week then do that.
The goal is to set aside that $1000 in a separate account. This account shouldn’t be too easy to access but can be transferred if needed. It’s for emergencies!
Now, whenever you unintentionally exceed your budget you don’t have to panic or go into debt. You can borrow from your emergency fund to make up the difference but you don’t want to make this a habit. This money is intended for real emergencies like your car breaking down or a repair on your home.
Are you living paycheck to paycheck? Have you got a budget and set up an emergency fund? Feel free to comment below in the comment section.