Living Pay to Pay? Check out these 5 tips!

Struggling to make ends meet? Drowning in debt? Feeling like you can’t go out and enjoy life without spending all your money?

Check out the tips below to improve your cash flow and start saving money!

1. Reassess your saving habits

If you are struggling to save at all, the first step is to see where you are going wrong. Print out the last three months of your bank statements and try to see where all your money is going. Sometimes you don’t even notice how much you spend on things until you actually see it in writing! Try and categorise each of these expenses. Some examples of categories would be groceries, bills, rent/mortgage, car expenses, eating/dining out etc.

2. Look to cut discretionary and fixed expenses

Once you have worked out where your money is going, look to try and cut down on any costs you can. First costs to look at are your discretionary costs, which include categories such as shopping, entertainment, eating out and so on. These will be the easiest to cut out and should be your first focus. A way to make this interesting is to create a challenge for yourself, for example try and go a whole week or month without eating out! Even better, to keep yourself accountable tell other people you are trying this challenge and to keep yourself honest. You still need to have some fun, so some discretionary spending is important. While these challenges are good for the short term, you don’t want to restrict yourself so much that you eventually crack and go a bit crazy on the spending. This can lead to even more spending if you hadn’t restricted yourself in the first place!

Once you have cut down on your discretionary spending, its time to focus on your fixed expenses. These are expenses such as your housing costs, bills, insurances etc. If you have a spare room free at home, maybe you could rent it out to save on your rent or mortgage and bills. Maybe it is worth shopping around to find a better home loan rate, or phone company, or insurance company who will give you cheaper options. Even if you call up your current providers and suggest you may leave, they could offer you a better deal. While this can be a bit of a hassle to begin with, it could save you a lot of money in the long run.

3. Have a separate card for spending

The most useful way to control my spending I have found so far is to give myself an allowance each week and put it onto a separate card. This way, I only have a set amount of money to spend each week and I can’t go over that amount. If I have money left over at the end of the week I either transfer it to my savings or treat myself the following week. This spending card is the only one I have on my google pay so I am less likely to use it for impulse purchases. If I do need to make a bigger purchase I will take my card for my everyday account to use.

4. Find a way to earn more money

There are only two ways to increase your savings rate- spend less or earn more. You can only cut your expenses by so much so eventually the only other way to save more is to earn more. It might be worth having a meeting with your employer to see if you can get a raise, or work towards one. Finding ways to add value to the business you work for is probably one of the best ways to earn a raise.

If a pay rise isn’t an option, you could look outside your primary occupation. Are there things laying around the home you haven’t used in a year or two? Maybe look at selling it on Facebook Marketplace or Gumtree. Have time to get a second job? Look at picking up some extra hours on weekends or after work at a café or restaurant. You could even try and pick up some babysitting or dog sitting on days off. Also, apps like Hire Up and Air Tasker can be great for picking up work for a couple of hours at a time, at a good hourly rate.

5. Don’t go into debt, or if its too late, get out of it

Debt is a major dead weight when it comes to saving. Things such as credit cards, personal loans and car loans have high interest rates that make it a tough slog to get ahead. Prioritising paying these off will allow you to get rid of this weight and get your money sorted sooner. It is not until you pay all of these bad debts off that you should start investing and setting yourself up for the future, so the sooner you pay these off the better.

If you have multiple debts, aim to pay off your smallest debt first and start with a win early. Celebrate the small win and then move on to the next biggest debt, and so on, until all your debts are paid. Once you have paid these off you can work on building your emergency fund so you won’t need to go into debt again. Erasing these debts will free up your cash flow and help you get out of the pay check to pay check cycle.

Paying off debts from smallest to largest is also known as the “Snowballing Debt” strategy

Getting out of the pay to pay rut is hard, and is going to take sacrifices. Ask a friend or family member to try and be more frugal with you, to hold yourself accountable. Make it a competition even to see who can save the highest % of their pay. Doing these 5 things should help you to become a better saver and get you out of the pay check to pay check grind.

It is important to keep in mind that if you are able to increase your income or cut down on those fixed expenses, the extra money left over is going into savings or into paying off your debt. If you don’t feel confident that you can follow these tips or want some accountability, feel free to reach out and I’d be more than happy to help.

Resources and Products Mentioned

Facebook Marketplace
Buy and sell items locally

Free marketplace to buy or sell in your own area

Hire up
Disability support work

Mad paws
Pet sitting and dog boarding services

Air tasker
Complete tasks for people ranging from assembling furniture to data entry


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