Always Broke Before Payday? Here’s why
Do you always feel like the week leading to payday is the longest everrrrrrr? Instead of exclaiming, wow, time flies! You probably think “thank god it’s payday” or TGIP.
First, know that you’re not alone and a lot of people go through the same. I’ve been there myself – spending all my income on the first week after payday then spending the rest of the month broke and stressed. No one wants to live this way.
But why do we always lead ourselves broke between paydays?
Why you’re always broke before payday?
There are several reasons why this happens, and some are based on my own experience:
1. You live above your means
Living beyond your means means you are spending more than you earn. This can be catastrophic – it erodes your savings, puts you into debt, damages your credit score and so much more.
Call yourself into a meeting and try to evaluate how you got there. Is FOMO (fear of missing out) dictating your spending habits? Your girlfriends are going to Cancun for a winter getaway, but you don’t have money to afford it so you max your credit card for it then you struggle for the rest of the year.
It’s hard not to be part of the fun, but it’s harder to dig yourself out of the debt you’ll be burying yourself into for short-term gratification.
2. You dread putting together a budget
Being always broke can be discouraging and demotivating. Have you ever thought what’s the point? I can barely cover my bills before my money disappears, budgeting is only for the rich.
Now picture this, whether you’re earning $200,000 or $50,000 you have the same options – spend, save, invest. Period. If you hate budgeting, the least you can do is track your spending.
3. You don’t have emergency savings
When living paycheck to paycheck even small bills like utilities can feel like emergencies. But they shouldn’t be. Start with your first 1,000 and build it until you achieve 3-6 months’ worth of your monthly expenses.
You may wonder how the heck am I going to save money when I’m barely affording my bills. The idea is to build a buffer that will give you great peace of mind if anything happens. This activity will also drive intentional spending – I see you FOMO – since you begin to be more aware of your income and expenses.
4. You’re living with a lot of consumer debt
Credit card debt, Sherlock debt, installment payment companies, etc are all consumer debt. Living paycheck to paycheck could be caused by the fact that your money goes to pay these debts as soon as it gets into your account leaving only a little to cover your needs.
Think this way – after creating a budget, how much of your money is going towards servicing debt? How much money will you get back once you get rid of that debt? This should fire you up right away.
5. You don’t earn enough money
I can tell you to live below your means aka spend less than you earn but depending on where you live, the cost of living could just mean that your total earnings won’t be enough no matter how you plan it.
In this case, look for ways to earn more money. There are a lot of ways you can earn extra cash through side hustles – I’ve listed the 10 easiest ones below:
10 fun and profitable hobbies to make extra cash
No matter what’s the reason you’re living paycheck to paycheck, it doesn’t have to be this way.
How to make money last until the next paycheck
1. Budget
If you’re living paycheck to paycheck, you need a budget. This small change will help you find where your money goes on the week following payday. As Dave Ramsey says, when you budget you tell your money where to go instead of wondering where it went.
Budgeting will provide the much-needed transparency of where your money goes. It’ll highlight some spending habits you didn’t even know of. This is the first step to ending your paycheck-to-paycheck life.
2. Take care of the essentials
Cover your essential needs first – food, housing, utilities, transportation. You want your household not to go hungry or homeless and you also want to be able to commute to work which is why these four are the top essentials. Talking of utilities, do yourself a favor and lose the cable. Being broke and having running subscriptions for Netflix, HULU, Disney, etc doesn’t make any sense. You’re welcome!
3. Practice delayed gratification
Have you ever found yourself thinking of how you can spend money now to be happy? Like if you buy that dress, you’re happy until you post that Instagram photo, get the likes and then you’re sad because you’re broke.
Delayed gratification will help you minimize credit card debt by avoiding impulse purchases. As a result, your money will stay with you until the next paycheck.
But what happens if you find yourself in this situation again?
I get it, Rome wasn’t built in a day and this behavioral change doesn’t happen overnight. Breaking the paycheck-to-paycheck cycle will not take one month or two. Depending on how much debt you’re carrying and how much income you’re bringing in, this might take a while.
Here’s what you can do:
1. Be patient
Building your savings while living paycheck to paycheck will take time, patience, and energy. You may find that the changes you’re implementing are not solving the problem right away. Be patient and stay consistent. This will add up and eventually, you will break the cycle.
The key is to forgive past money mistakes and give yourself the grace to move forward.
2. Practice no spend strategy
Do you like a good challenge? Now it’s the time to keep things exciting so that you stay on track. Create your no-spend challenge and stick to it. Making baby steps like a weekly no-spend challenge, then bi-weekly, and then monthly will make it not feel like a big mountain.
The goal of the no-spend challenge is to go without spending money on wants. Don’t cut on the needs. Make sure your WHY is big enough to keep you consistent.
Some of the ways you can implement a no-spend strategy are to stay at home which means home-cooked meals, eat from your pantry or freezer, allocate zero dollars to entertainment, and return any unused purchases and get a refund.
