5 Ways to Stretch Your Paycheck Until Next Payday

a pay day post it note on a calendar

A calendar waiting on pay day | Source: iStock

You may enjoy your job, but sometimes your passion doesn’t match your paycheck. You’ve tightened your belt so much that you just can’t find one more thing to cut from your budget, and you’re about to scream out in pain. The not-so-good news is you’re not alone. Roughly 38 million American households say they are living hand-to-mouth, according to the Brookings Institution. If you find yourself in this situation, there are a few things you can do to remedy the situation. Here are four tips for beating the paycheck-to-paycheck life.


1. Assess spending

Your first step will be to take a look at where your money is going. You know that you’re being stretched to the limit, but what exactly is causing you financial distress? The only way to do this is to track your spending for a minimum of 30 days. Write down everything you purchase during this time. At the end of the 30 days, you’ll be able to see what you need to cut out completely and what you need to start spending less on. This will prove to be an eye-opening exercise. Make sure that you don’t become overly conservative once you do set a monthly budget. When you cut back too much it will set you up for impulsive spending sprees. Build some fun into your budget by setting aside savings just for personal purchases. This way, you won’t feel deprived.


2. Increase your income

If you tend to overspend, you’ll have to work hard to get a handle on this bad habit. The main key to moving beyond living from check-to-check is spending less than you earn. If it is not possible to cut more from your budget, you’ll have to be creative and look for ways to add income. Do you have a talent that people would pay for? Think about getting a part-time job or starting a side business.


3. Don’t become a personal ATM

On reason some workers get stuck in the paycheck trap is that they often lend money to friends and family. Not surprisingly, they never see this money again. If this is you, stop it right now. Don’t feel pressured to lend money to whomever asks. Remember that you have your own needs and expenses. If you do feel compelled to lend, make sure that your financial obligations are taken care of first—and don’t expect to see your money.

4. Adjust withholdings

KAREN BLEIER/AFP/Getty Images

KAREN BLEIER/AFP/Getty Images

Make sure the correct amount of money is being withheld from your paycheck. Depending on your situation, the IRS may be taking too much from your paycheck—money that you could use right now. Don’t give the IRS an interest-free loan. If you’ve experienced a major life event such as the birth of a baby, divorce, or marriage, you will need to make adjustments. You can do this by filling out a new Form W-4.


5. Save for a rainy day

Things may be calm now, but you will eventually have a financial emergency; it’s just a matter of time. Consequently, it’s wise to designate at least 10% of your check for savings. So when you do have an emergency, you won’t be dipping into overdraft, spending cash that was designated for another urgent purchase, or relying on credit to bail you out. One way to take the pain out of saving is have a certain amount of money automatically taken out of your paycheck each pay period. This way you won’t miss the cash. Setting up your savings on autopilot will also take the temptation away to check your balances frequently. This is good because checking your savings balance too frequently will tempt you to make a withdrawal.

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