In America, living paycheck to paycheck is commonplace. The majority of workers are unable to put away significant savings, even if their income exceeds six figures. The truth of the matter is life is expensive and unexpected costs come up each month. So, if you find yourself running out of money before your next payday, what can you do?
A survey by The Penny Hoarder found that nearly 60% of people cut spending in an effort to save money before their next payday. About 36% use credit cards to survive the crunch, and over 36% dip into their savings. While these are all viable options, some make more financial sense than others.
Review Your Spending
If you find yourself short on cash before your next payday, the first thing you should do is review your spending habits. If you haven’t already, create a budget; factor in all of your income and expenses. To start, print out your last few months of paychecks, as well as bank and credit card statements.
Make a list of critical bills that you must pay each month, such as your rent or mortgage, car loan and utilities. Now categorize your other spending into things like entertainment, apparel, health care, education, etc. This will help you understand where your money is going each month and where you can cut costs.
Prioritize Your Money
Your housing, food and transportation costs are a given. Unless you are planning to downsize, these are more or less fixed costs that need to be paid first. However, other areas such as entertainment and clothing purchases may need to take a backseat for a while to get you to your next paycheck.
Once you look at how you are spending your money, you might be surprised with what can be cut. Look at things that are on autopay. Are you paying $29.99 for a subscription that you never use? Do you have Hulu, Netflix, Prime and Disney+? Can you live with just one? All of these little cuts can add up to big savings in the long run.
Increase Your Income
Once you have prioritized your spending, see whether you can increase your income. Consider getting a side hustle such as tutoring, food delivery, pet-sitting or selling your stuff. Think about what you could offer a company or an individual, such as social media management or personal shopping.
If you have been with your employer for at least one year (in some cases, six months), consider asking for a raise. Do your research and make a compelling argument for why you have earned the increase in salary. Have you recently taken on more responsibility or accepted a new position? What do you offer to the company that makes you a valuable asset?
Look for Relief Programs
Once you have reviewed your spending and looked for ways to increase your income, see whether you qualify for any relief programs. You may be able to ask for a deferment on your student loans or may be eligible for assistance with your utility bill. There are state and federal programs available depending on your income.
Slide Into Savings
If your money woes are temporary and you have a rainy day fund, now is the time to use it. Once you are in a healthier financial state, you can repay yourself and build your savings back up.
And If You Are Really in a Pinch
You can always put money on your credit cards; just make sure you at least pay the minimum on all of your cards, or your credit could take a hit. While this fix is not a long-term solution, it might help you get through a rough patch. It doesn’t hurt to look around too for better rates and 0% balance transfer offers, 0% intro APR and cash-back incentives. Just remember: Credit card debt is easy to rack up and very hard to pay off.
Finally, other not-so-advisable options may include payday loans, layaway (“buy now, pay later” programs), or borrowing from friends (unless you know you can pay it back).
If you are like many other Americans and find yourself living paycheck to paycheck, just know there are innovative ways to stretch your money and stay on budget — without having to win the lottery.
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This article originally appeared on GOBankingRates.com: I’m Running Out of Money Before My Next Payday: What Can I Do?