Focus On Finance: Breaking The Paycheque-To-Paycheque Cycle

According to research, well over a third of UK workers are living from paycheque to paycheque. And let's be honest, with such confusion about the country’s economy in the future, there’s an excellent chance that those figures will only go up. So, if you are struggling to survive for the month after paying your bills, you are probably apprehensive. But there is some good news - with a little change of focus it is possible to make your money stretch that little bit further. In today’s brief guide, we’re going to take a look at how you can break the paycheque to paycheque cycle, regardless of your current income levels.

The Impact of Paycheque to Paycheque Living
If you can’t last the month without running out of money, it can put a severe strain on your finances. You might have to take out short term loans, so you don’t get hit by high overdraft charges. You might have to use your credit card to make day-to-day purchases such as buying food and paying bills. And the stress it causes is enormous and could end up causing you severe health problems. When you end up feeling like you are drowning in debt and don’t see any way out, even though you work hard 5, 6, or maybe even 7 days a week, life can be bleak.

Acknowledge You Have a Problem
The first step in getting back on track is admitting there is a problem. But it’s important to understand that it is just an issue you can work on - there is nothing final about it, and you have the power to make changes. And it’s also vital to remember that recognizing you can’t go on like this is the most important part of the solution.

Create a Spending Chart
Now it’s time to get things fixed. You must get on top of your spending by working out where every penny of your income is going. Write down exactly what you receive each month from wages, tax credits, child support or any other income at all. Next, write down all your necessary expenses - your mortgage, for example, and your utility bills, children’s club fees, debt repayments. Finally, look at your shopping budget and include any services you use - are you a member of a gym, or do you pay for Netflix, Amazon Prime or Spotify?

Trim the Fat
Now, it’s time to be ruthless. Be honest with yourself and look at those payments that you don’t really need. Maybe you spend too much on alcohol each month or buy brand name foods that are much more expensive than generic alternatives. Perhaps you can stop paying for Spotify and use the free version, or switch your Sky TV for the less expensive NowTV. You can even make a promise to yourself to make a packed lunch for work instead of spending a fiver every day at the staff canteen. 

Create Saving Goals
The final step is to put all that money into a savings account and try to leave it untouched as much as possible. With more focus on your spending, you will find you can put more away each month, and still last to the end without spending all your money. And, while there is a long way to go, you are well on your way to breaking the paycheque to paycheque cycle. Good luck!

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