Finding a way to stop running out of money before payday is often easier said than done. However, it is likely possible. Today I’m sharing my top tips to help you make it to payday without scraping the bottom of your bank account.
Ask yourself: Why am I always running out of money?
First things first, it is important to take an open and honest look at your finances. When you take a close look at your spending habits, it can be easy to judge yourself harshly. But please don’t do that!
Instead, just be honest with yourself. If you need help being honest without being too critical, then consider checking out some of our money mindset tips. These could get you in the right headspace to approach your finances without judgment.
Just looking at how you are spending your money could lead you to the root of your money leaks.
The good news is that it is absolutely possible to make changes to your finances. Making it to payday might not be as challenging with the right money moves.
How to stop running out of money: 5 Key tips
So, are you ready to see what it feels like to not run out of money all of the time? Work through these tips to stop running out of money before payday.
1. Look at your spending
If you frequently run out of money, the first place to look is your spending. The goal of this is to help you really get clear on where your money is going.
It can be difficult to get to the bottom of the problem without diving deep into your spending habits. If you need help tracking your spending, check out these helpful budgeting tools.
In some cases, the expense that is causing you to run out of money will be painfully obvious. For example, you might be spending too much at restaurants, or your car insurance premiums might be too high. Whatever the reason, taking a look at your spending will illuminate any glaring problems.
You can do this by reviewing your credit and debit card statement over the last three months. This can help you determine your highest spending areas. Once you've done that, you can track your future spending with the help of a spending journal.
Not will a spending journal help you see where your money is going in real-time, it will also help you assess how you feel emotionally each time you spend.
2. Try out a new budgeting method
If you are struggling to make it to the next paycheck, then it’s time to try a new budgeting method. Budgets are not one size fits all. Instead, you’ll need to find a budget that works for your situation.
There are many budgeting methods to choose from. For instance, the 80/20 rule method is where you use 80% of your income towards your needs and wants and save 20%. Perhaps the zero-based budget would suit you better. This is where you budget down to the very last dollar.
One of the simplest ways to budget is by paycheck. So check out our tips for successfully budgeting by paycheck. Or take our completely free full budgeting course to map out a plan that includes your priorities.
Remember the best type of budget is the one that works for you. It's ok to try multiple budgeting methods and apps until you find that work that works best for you.
3. Look for ways to save something with each paycheck
When unexpected expenses pop up, it can be incredibly difficult to make it to payday. That’s when an emergency fund can really come in handy. An emergency fund is a specific savings stash that is designed to help you cover whatever life throws your way.
Unfortunately, life often throws an expense at you when you least expect it. Try to prepare yourself by setting aside something with each paycheck.
One way to make it easier to save is to automate deposits into your savings account each time you get paid. This way the money is already saved before you get a chance to consider doing something else with it!
4. Cut spending where you can
If you need to cut back on your spending, start by looking at the biggest expenses in your budget. For example, finding a more affordable housing situation could be a game-changer. Consider looking for roommates or moving to a new apartment to reclaim a sizable chunk of your paycheck.
Other big-ticket categories to consider cutting back on include your vehicle expenses. For example, shopping around for a new auto insurance policy could help you save. Or consider trading in your current vehicle for a more affordable option.
After looking at big fixed expenses, it is time to look at your variable and discretionary spending. Unfortunately, it can really add up quickly! Look for places where you can reasonably cut back.
For example, you might be able to swap meals out for cooking at home. But you often can’t slim down your grocery budget past a certain point, especially with rising food costs.
If you don’t see any more room for cutting back on your spending, then move on to the next tip.
5. Seek out an additional income stream
Whether or not you’ve exhausted all of the other options, adding an additional stream of income to your finances is always a good idea. That’s when a side hustle can step in to save the day! Starting a side hustle can help boost your income if you are always running out of money.
Although a side hustle is another time commitment, it can be a smart way to boost your cash flow. Some side hustle ideas include freelancing, bookkeeping, proofreading, transcribing, tutoring, or flipping physical items. More traditional options include getting a part-time job or picking up more hours at work.
For more side hustle ideas, check out the top side hustles for women.
When starting a side hustle, be realistic about its earning potential. Look for an option that will help you make ends meet. Depending on the amount you are looking to earn, it’s possible you’ll quickly make up the difference.
If you are ready to start a side hustle, I highly recommend checking out The Side Hustle Guide: Build a Successful Side Hustle & Increase Your Income by our founder, Bola Sokunbi. It offers practical advice to help you get your new side hustle off the ground.
Alternatively, aside from starting a side hustle. You could ask for a raise, find a better-paying job, or even a part-time job for that income boost you need. As you earn the additional income, be sure to build this extra money into your budget so you can allocate it to your financial goals and priorities first!
Take action to stop running out of money!
If you are always running out of money, then it’s time to make a change. Remember, it's all about finding a budget method that's easy for you, finding ways to reduce your expenses, and boosting your income if necessary. With some tweaks to your financial picture, you may never run out of money again.