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How to stop living pay to pay


It's time break the cycle, and learn how to stop living pay to pay


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So many people don’t know how to stop living pay to pay, and it’s not just those earning lower incomes.  Often, those earning pretty decent salaries, that you would assume are saving huge amounts each week, are still only just getting by.  Whether it’s because they feel the need to spend every cent they earn, or their expenses have risen along with their income without them even noticing.


It’s so important to break the cycle of living pay to pay, after all you just don’t know what’s around the corner.  You could get sick or lose your job, and without some form of savings, it’s hard to keep paying your usual expenses.  Here are a few tricks you can use to help break the cycle, and start having some spare cash left over at the end of each week:


Act like you earn less than you do

It’s pretty simple, but if you spend less than you earn, you are going to have spare money at the end of each pay cycle.  If you can pretend that you earn less than you do, you might just be able to adjust to a new, ‘normal for you’, level of spending.    If you know you will feel the urge to spend any money you have sitting in your bank account, set up a separate savings account and transfer a percentage of your pay into this account.  Set this transfer up as an automatic payment that will occur each time you get paid.  That way, the money will quickly be out of sight, and hopefully out of your mind.  Try to work towards having 10% off each pay automatically deducted, and you will have a decent amount saved up before you know it.


Know where your money goes


If you are going to break the cycle, you absolutely have to know where every cent of your money is going.  Chances are, when you start recording how you spend your money, you will be shocked at how quickly a few dollars here are there adds up.  Just grab a piece of paper and start recording how much you spend each day, and what you spent the money on.  Do this every day for a month, then sit down and group the payments together, for example all the individual amounts spent on groceries, transport, eat out etc.  You will probably be able to pick out the areas of spending straight away that are suckingup each pay cheque.  Recording your spending will also make your more accountable to where your money goes., so you might find yourself thinking twice before making unnecessary purchases.


Start an emergency fund


You have probably heard of the whole emergency fund idea before, but it is really important to have some money set aside for unexpected spending.  You might find your car breaks down and you need money straight away to pay for repairs, otherwise you are without a car!  If you don’t have an emergency fund, you might have to resort to spending on a credit card, which is going to make it even harder to break the living pay to pay cycle.  Decide how much money you want in your emergency fund, and start putting aside small, regular amounts, until you reach you emergency fund goal.  I guarantee you will feel so much better once you don’t have the worry things breaking down, and having no money to pay for them when they do.


Think about downsizing


If you already live without many, if any at all, luxuries and still find yourself living pay to pay, it might be time to consider downsizing.  If you have an expensive to run car, you could consider switching it for a small, more economical car.  Or you might need to look into downsizing your house, whether you are renting or own.  The thought of needing to downsize your house isn’t pleasant, but if it means you can free up some cash each pay, it might be one of the best decisions you could make.  There are upsides to downsizing too; smaller houses require less housework, less money to keep them maintained, heated and cooled etc, which can further save you money.


Work towards being debt free


If you have debts, chances are the repayments are taking a good sized portion of your pay.  If you do just one thing, it should be focusing on getting rid of your debt, for good!  If you have multiple debt, start with the debt carrying the highest interest rate and pay it off as soon as possible, even if it means making big sacrifices to do so.  Once that debt is paid off, get to work on the next highest interest rate, and so on.  Once you pay off one debt, just don’t be tempted to use the money you were spending on repayment as general spending money.  Put the same amount of money you were using as repayments into your next debt, and once your debts are paid off, put this money straight into savings.  It does require a little discipline, but it’s well worth the effort.  Once your debts are gone, pay cash for everything, or the debt cycle will just start once again.




1 in 7 don’t have any savings put away for a rainy day. The standard personal finance advice is to have an emergency fund set aside, but for those living week to week it’s not that easy. If you ever find yourself in a situation where you are considering a short-term loan, be sure to read these 4 things you need to know about short-term loans first

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Miss M

Thursday 14th of August 2014

Great tips! Love these!


Thursday 14th of August 2014

Awesome tips! How come they are just so hard to live out;0) Can't wait to get to the point where we can save that extra 10%!