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Today's contributed post asks the question, "Why are you always broke?" We explore how you can save and spend your money better. Let us know your thoughts in the comments. Enjoy!
Why are you always broke before payday comes around?
Whether you’re employed to self-employed, you can probably answer that question yourselves. In all likelihood, you are spending too much money! It doesn’t matter if you are frittering it away on luxuries for yourself and your family, or not. The money is obviously going somewhere, and if you are running out of moolah every month, something needs to be done.
Take a look at your bank statements and receipts (you do keep hold of them, don’t you?) and figure out where your money is disappearing to. By getting a handle on your expenditure, you will have a better idea of where to cut costs. Ensure you stop spending money you don’t have on things you don’t need, and then look at the essentials - energy bills, insurance, and the like - and use price comparison sites to give you a cheaper deal, as well as looking at ways to reduce your spending by implementing better habits around the home (in the case of your utility bills).
Check out these 6 tips to craft the perfect budget.
When the paycheck rolls in, what do you do with it? Do you rejoice and then spend part of it on something nice? Whether it’s a takeaway to save yourself from cooking, a heap of luxury items at the supermarket, or a splurge at the shopping mall, you need to curb the temptation to spend, unless you are sure you have the money to manage the rest of the month.
Listen, here is the better option before you spend it all away too soon. Divide your paycheck into various amounts, using a separate bank account if you need to, or by taking out cash and splitting it. Put aside a set amount for groceries - the essential food, not the cream cakes! Put aside some money for your bills and other necessary payments, ensuring you have enough to cover them.
And then put aside some money into a savings fund for those rainy day emergencies. If you have some money left over? Then by all means, treat yourself. However, if you are careful with your money and don’t spend it unnecessarily, you should also consider the next point.
If you are living paycheck to paycheck, and only paying for life’s necessities, then you may need to reconsider your job. If you can work extra hours without burning yourself out, or if you can ask for a pay rise, then do so. If neither is possible, you may consider changing job altogether, or finding ways to boost your monthly income. By doing any of these things, you should find you don’t run out of money so easily.
While you should find ways to manage your money, we understand it’s not always that easy to stay afloat. Mistakes can be made, or you may have had an emergency which has eaten your finances. If you find yourself in hardship, you shouldn’t be left to struggle unduly. Online loans - take Bonsai Finance as an example - can get you out of a hole, provided you have the means to pay it back (you don’t want to get yourself into debt).
Food banks and debt-relief agencies have been set up to help those who are struggling, so look online for help near you. And prepare to eat humble pie - on one-off occasions, friends and family may be able to help you get back on your feet until the next paycheck arrives. And when that paycheck does arrive? You need to start again at the top of this article and find better ways to manage your money.