Whether you’ve already received your payday check or you’re desperately counting down the days until the end of the month, living your life and making plans around when you’re finally paid can be exhausting.
If you often find yourself living paycheck to paycheck or checking your bank balance to find out you've spent all of your wages within 2 days (no judgement here!), keep reading to find out whether you’re falling victim to the quickest ways of going broke on Payday - and how to avoid it. 🤞
1) Living Without a Budget
Not setting a budget for the month ahead is a quick and very easy way to spend all your wages in one go!
Avoid overspending and going broke before the next payday by giving yourself at least 30 mins during one evening to work out your budget. It’s best to do this before you’re actually paid, and make a note of all of your outgoings for the month.
There are plenty of budgeting methods you can try to make this process simpler, and a good place to start is by categorising your expenses into fixed, variable and irregular. For more information on this, check out our blog on the 3 Types of Living Expenses to work into your budget.
2) Investing in Things You Don’t Understand
We know how tempting it can be to jump on the bandwagon when a new trend like cryptocurrency or dogecoin emerges.
Whilst investing can be beneficial in the long run, there are always risks involved - and you’ll want to make sure you evaluate these risks first.
Check out this helpful beginner’s guide to investing from MoneyHelper for the lowdown and make sure you always do your research on anything you plan to invest in. And if you don’t quite understand it, it may be best to sit it out!
3) Not Paying Yourself First
If you’re unfamiliar with the phrase “paying yourself first”, it basically boils down to paying a portion of your salary into a savings account as soon as you’re paid.
You can do this automatically by setting up automated payments around/on the day you’re paid, which is a great method as you’ll likely not even notice the funds leaving your account.
The idea behind paying yourself first is that you’re making a payment to your future self - whether you decide to use that money to invest, as a personal pension fund, or even an emergency fund.
Your future self will thank you as you’ll be less likely to go broke due to any unexpected costs!
4) Buying on Impulse
We all have our spending triggers, and the sooner we notice these, the better!
Making impulse purchases, buying things you don’t need, or buying things for the sole purpose of impressing others and keeping up with the latest trends (do you really need that latest iPhone?), is sure to keep you going broke before the next payday.
Remember - leaving a good impression won’t help you pay your bills!
Check out our blog post on Healthy Money Habits to help you avoid any future impulse-buying.
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Post inspired by @adultingcornerph