Four Reasons You’re Living Pay-to-Pay

To make a rather crude metaphor, money is the blood of our personal finances. There’s a minimum amount that we can survive on and people seem to freak out when there’s a lot of it on the floor at any given time. But we often don’t realise just how easy it is to start haemorrhaging our pay until we’ve already lost a small fortune. And unlike blood, you can’t really get a money transfusion when you’re running low. Unless of course you have a bunch of shit to sell.

Here are some reasons you might be loosing your sweet moola.


Credit card interest


Interest is not your friend, so why let it hang out with your money?

Clear out any high interest debts as quickly as you can, because the lower the balance, the less you’ll pay the banks in interest.

If you’re having trouble, consider a balance transfer with a lengthy interest free period, or even a personal loan with a lower interest rate.

You can learn more about the quickest ways to get rid of bad debt right here!


Letting your money stagnate


Why keep your savings in an everyday account when it could be earning you money?

Get the most out of your cash by putting it into a separate high interest savings account. That way, it’s harder to access at short notice (e.g. at the pub after too many schooners) and will earn you some decent returns on your money. Better than nothing, right?


Living larger than you need to


You know the drill, you’re already living pay-to-pay and when you start earning more money, nothing changes. People generally interpret more money as a license to spend more when you really don’t need to.

The next time your income gets a boost, try saving most of it or cracking the investment whip to get it working for you.

It’s also worth assessing your spending to identify areas where you can make cuts. Stop eating out so often or buying so many candles.


Getting caught up in the extras 


“It’s two for $7 if you want to grab another one.”

“Do you want guacamole for $1 extra?”

Sound familiar? That’s because it happens everyday, everywhere you go. Why? Because it works! Whether it’s in the heat of the moment or because you’re a total fiend for guac, they’ll get ya.

Show some self control and reign in your extra-happy splurging, especially when it starts getting to the big ticket items that are offered on cars or expensive electronics.