How to Effectively Budget Your Money when Living from Paycheck to Paycheck

When living from paycheck to paycheck, it is vitally important that you know how to budget your money well, which can easily be done with a few simple calculations a little common sense.

If you find yourself in the situation where you have irregular working hours, you are self-employed or you're a struggling freelancer, you will have to become accustomed to living from paycheck to paycheck and budgeting with an unreliable income. In order to do this you will need to begin your budget with your expenditure and not your income.

Budget for the worst-case scenario when living from paycheck to paycheck

  • Making ends meet is usually the primary goal when living from paycheck to paycheck as you can never be sure of a constant flow or consistent amount of money. As a result, you should budget accordingly and set aside the amount you need for the essential payments in your life. Rent and food should be the main items of expenditure you need to regard closely. If you do not make enough from each paycheck to cover both then you should try to ask for an extension on your rent so that you can eat. Try to keep yourself ticking over for food by sourcing the cheapest ways to buy fresh ingredients. Buying fresh fruit, vegetables, bread and meat from a market is much cheaper and will last longer.
  • Try to keep a constant level and consistent rate of spending. Do not rush out and spend all the money on luxurious items when you receive a particularly good paycheck. Try to put some away for when you have a lean week and don't make as much as you need. Necessity is the most important thing you need to bear in mind. You need food and you need rent, but you don't need a brand new television or extravagant items that you simply will not be afford to afford to keep.

Stay well organised when living from paycheck to paycheck

  • It can be really difficult when living from paycheck to paycheck and things can get rough at times but stick it out and keep working hard. Try to move upwards in the job you can and keep your book keeping well maintained. Set aside files or folders that detail all of your expenses. Write them in clear headings that you understand, such as "Entertainment" for any social activities like drinks with friends or the cinema. Try to keep as many receipts as possible. If you find yourself in a situation where you cannot ask for a receipt, over the course of a night in a bar for example, then you should try to jot this down on a piece of paper or in your phone. It will help you in the long-term as you have a reference to what you are spending your money on.