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February 7, 2022

Do you often feel like you have more month than money? Do you worry when your paydays won’t hit until after your biggest bills are due? Maybe you avoid going out for saimin with friends until you get paid again — then find that you still can’t go out because an unexpected bill came in?

When you’re living paycheck-to-paycheck, it can seem impossible to break out of that cycle. You spend so much of your time and energy making sure the money will last until the next paycheck arrives. And every time you feel like it’s getting better, something comes up that keeps you stuck.

But you can get out of the cycle. It just takes a little work and dedication. Here are some steps you can follow.

Create a Budget

Creating a budget sounds like a drag. You’ve probably always thought of a budget as a limit on what you can spend and what you can do. But it doesn’t have to be something negative. A budget is simply a plan for your money. And when you have a plan, you know where you’re going and how you can get there.

Start with your monthly income. Include your salary, any rental income, and any other money that comes in regularly. If you get paid hourly, on commission, or in some other variable method, use your lowest typical income as your budget number. Then move on to your fixed and necessary expenses, including housing, food, utilities, insurance, and transportation. Add your variable costs, making sure you allow yourself and your family some fun. (This is usually why budgets get such a bad reputation — people tend to cut out all the fun stuff and then wonder why they’re unhappy following the new budget.)

The final thing to include is your periodic expenses, such as annual insurance payments, subscriptions, and other bills you pay quarterly, every six months, or once a year. Split those up over each month, so you’re saving for those expenses on an ongoing basis. What do you have left over? And what percentage of that can you add to your “getting ahead” fund? If you don’t have an emergency fund, open a dedicated savings account for that purpose. Start by saving $1000, then increase it to three to six months of expenses.

Take Advantage of Free Money

If you win money, get an unexpected check in the mail, get a tax refund, or have some other windfall, use that to build your savings. You don’t have to put all of it away — after all, it can feel so good to spend surprising gains on something you haven’t been able to get because things have been tight. If your income is inconsistent, when it goes above your budget, you can add those extra funds to your savings, too.

Another way to get ahead is by taking advantage of golden months. If you get paid weekly or bi-weekly, there will be some months that you get an extra paycheck. For example, if you get paid every Friday, some months will have five Fridays instead of the typical four. In 2022, April, July, September, and December are golden months. That extra paycheck is another source of “free” money that can go right into savings.

Cut Expenses Where You Can

If it seems like relying on free money will take too long, then you can try to cut your expenses, either temporarily while you get ahead, or permanently to make it easier on yourself going forward. For example, you can call your cell phone and cable providers to negotiate a lower rate or change your services to get a lower bill. Or refinance some of your debt — mortgageauto, or credit cards — to lower your payments and free up more of your monthly income.

You might also try “no spending” days or weeks to lower expenses. As you find new ways to spend less money, you may need to save less to get one month ahead.

Increase Your Income

Another way to get ahead is to get more money coming in. You can try selling items at the swap meet or online. Or you can take on some side work temporarily to help build your savings. If you work hourly, ask for extra shifts to make more money.

Once you’ve got three to six months’ worth of expenses saved, you can start breathing easier each month, knowing that your bills are covered, even if there is a minor income setback or due dates shift around. And you can move on to other money goals, knowing that you can succeed at anything.