Do you fall into the common pattern of counting down the days until you get paid and then overspending on payday? You’re not alone, and you may even be falling straight into the trap of strategic advertising. In fact, spending patterns around when consumers get paid are predictable, and many retail products and brands have reported higher sales at the beginning of the month, corresponding with the timing of monthly paydays as well as government payout days for those on such assistance programs. As a result, retailers will often time sales and coupon releases around these buying habits.
Living paycheck to paycheck isn’t uncommon. In fact, data shows that roughly 78% of American households are stuck in cycle of struggling to make ends meet. In fact, the data shows that regardless of the income level, people share this common struggle.
But you CAN break the cycle. You don’t have to overspend on payday and you don’t have to live paycheck to paycheck.
So how do you budget your paycheck to make it last? How do you break the habit of overspending on payday, and leaving yourself strapped for cash until you get paid again.
Stop Overspending On Payday
Here are some tips for making your paycheck last as long as possible:
Plan for Entertainment and Spending Money
When you create your monthly budget or spending plan, build some funds into it so you have the money to treat yourself on payday. Knowing that the money is accounted for and earmarked for fun will give you the freedom to enjoy your night out or fun shopping trip without guilt.
Pay your bills on payday regardless of their due date
If your bills are paid first, you’re less likely to have the money available to overspend. This way, you’ll be covered for the whole month and you won’t risk late fees. If you get paid twice a month, you can break your bills into two segments, and pay half each pay period.
Pay yourself before you splurge
A healthy budget includes a savings plan, but do you prioritize your saving by paying yourself first? If you only save what’s left over, it’s easy for saving to completely fall by the wayside. Your goals matter, so pay yourself first!
Know your areas of temptation
Perhaps it’s best for you to avoid shopping sprees, dinners out, or other unnecessary purchases that will drain your account immediately after being paid. Impulse spending can have a strong pull, especially if you’ve been feeling deprived. Know your weakness and plan to avoid the areas you may struggle with when it comes to spending money.
Budgeting your money and spending wisely around payday will help your money last longer. By planning ahead and making some simple changes, you can ensure you won’t have to wake up five days before payday with no money in your bank account.
Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt free. Speak with a certified counselor for a free debt analysis today.