In theory, our monthly salaries should last us the entire month. Unfortunately, in reality, that never seems to be the case. We often have unexpected emergencies to monthly bills that always seem to increase, and those “impulse buys” that seem to catch us at our most vulnerable periods.
Hence, most of us tend to fall into the trap of finishing our salaries before the end of the month. I remember the days I would live it up the first part of the month and then desperately wish for another paycheck in the second half. Sometimes I would even go overboard by spending more money than I earned and rack up debt in the process.
Some of the things that have helped me over the years to ensure my income lasts include:
- Having a spending plan in place
Failing to plan is planning to fail. We need not wait for our salaries to get credited for us to make our monthly savings and expenditure plans. We need to have planned for every cent of our salaries beforehand. This creates discipline and helps us avoid over spending or unnecessary spending. Always remember in this consumer era we live in, there will always be a thousand and one brands hungrily waiting to plan our money for us. And as we are on the topic of spending plans, we need to always ensure we cater to paying ourselves first then the rest later.
- Go through your pay slip
Most of us assume that the HR department cannot make a mistake. Unless we are receiving a specific amount every month, with no additional deductions or income, we need to always go through our pay slips to ensure all entries are correct. Check if all deductions are posted correctly. Is that loan you finished paying still being deducted? or whether your PAYE has been correctly calculated. Also ensure that all bonuses and pay increases have been credited correctly. It may sound stupid, however, you will be surprised at how many times payroll accountants make small mistakes. In addition, going through our pay slips helps us analyze our income. It’s important, as we go through it, to ask ourselves some hard questions. E.g. Is this where we want it to be? Are we better or worse off than last month? Etc.
- Pay all bills at once
Most of the times we tend to overspend the first days of getting our salaries because we are ‘tricked’ to by our large bank balances right after pay day. Hence, it is quite helpful to pay all our bills as soon as we get paid. We need to create a system that ensures all our utilities and whatever else we know is critical to sustain our lifestyles is paid within hours of our salary getting credited, and we know exactly how much we are left with. This takes away the headache of not knowing where we will get money to pay our utilities in the middle of the month which often leads to getting ourselves into unnecessary debt. For the irregular bills such as electricity or water, we can find an average of the last 4-6 months and use that as our amount.
- Finding cheaper alternatives
The easiest way to make our money last longer is finding cheaper alternatives to what we spend our money on. Always negotiate and be on the lookout for better deals. You will be surprised on how many better deals you can get out there. We don’t need to be too loyal to brands that are not offering value for our money, let’s try new brands which are often more affordable. Similarly, we can find what to cut from our current spending plans. We sometimes don’t know how much we spend on simple things like buying bottled water every day and how it affects our money.
- Divide up the month into weekly periods
For those of us who we find ourselves spending most of our money at the beginning of the month, we can consider dividing our months and income to weekly periods. Set a limit for each week, and only take that amount with us when we leave the house. We can also make weekly envelopes or set weekly limits in our accounts. This will greatly help us stop overspending and stay on track throughout the month.
- Have an emergency fund
A month can seem so long especially if we are faced with unplanned occurrences such as accidents etc. which can take up all of our money at beginning of the month and leave us struggling for the rest of it. An emergency fund can help us handle these unexpected expenses. Setting aside a certain amount a month for an emergency fund is a good start and slowly built it up to where we want (at least 3 – 6 months of our living expenses) overtime or using bonuses or any unplanned money we receive.
Always remember, this journey is a marathon not a sprint. We wont have it all figured out in a day.