19 Sep Tips on How to Budget Around Your Pay Cheque
The day your pay cheque arrives may present highly anticipated opportunities to splurge on an extra nice meal or to go out to the movies, but it also presents the need to practise restraint and exercise some self-discipline. Not all of us have heaps of disposable income. Many of us rely on wages to budget different monthly expenses – rent, food, utility bills, loan payments, gas and more. When you end up with more debt or unpaid expenses than what you actually earn, you may be overdue for a reassessment of your budgeting approach. Here’s how you can budget more effectively and minimise your risk of debilitating debts, or living pay cheque-to-pay cheque.
Pay all your bills at once
This is an ideal practice if you receive your pay cheque on a monthly basis. Paying your bills all at once may seem like a burdensome option, watching such a sizable chunk of your month’s earnings disappear in the blink of an eye. However, paying your bills up front can take some weight off your shoulders and make budgeting for the rest of the month that much easier.
You can opt to have your bills automatically subtracted from your account the moment you get paid. If your utility bills aren’t a set amount, you should make sure to allow fluctuations if you choose to auto-debit from your account. Budget for the high-end potential of those bills, so that you’re not taken by surprise. If you have current loans to take care of, make sure you pay them on time to avoid late fees and added.
If you’re considering a loan for an upcoming planned expense but aren’t sure how much the interest will affect your budget, you can use a loan repayment calculator to work out how much your repayments will be depending on the amount borrowed. This will allow you to budget your money faster and easier.
Allocate money for expenses until your next pay cheque
It’s also wise to make sure that your other important expenses will be covered. This may include your car maintenance, home repairs, groceries, and more. You should be able to determine and categorise all remaining expenses and allocate money to these categories once you’ve received your salary. If it’s not possible to cover these other expenses, you can use the half-payment method and allocate money in the half of its amount. This is the case for expenses not due until your next pay cheque. For example, if your insurance bill is due on the 15th and you are paid on the 25th, you will set aside half of your insurance bill payment from your 25th pay cheque and the other half will come from the next pay cheque on the 10th.
Set aside leftover money for savings
A great way to make sure you have money in your savings account is to have a percentage of your pay cheque directly deposited so you never see it and just let it go straight into your savings account. Having a savings account can also conveniently serve as your emergency fund. If you still have cash on hand after paying expenses and setting aside savings, you may want to hold off on that restaurant reservation first. Put the money towards your emergency fund first and thank yourself later.
Stick to responsible spending
The key to making the most out of your income is to stick to your spending limits and not overspend. Setting weekly or monthly limits can help you navigate your budgeting route easier. As you learn how to put your money towards certain necessities each month, you will find more breathing room to thrive until the next pay cheque and obtain extra savings for your much-needed dinner out!
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