Most South Africans cannot even save for retirement, let alone save any additional money for emergency expenses. What can you actively do the stop the trend of living from payday to payday?

1. Why you are living payday to payday?

Ultimately, individuals land up living payday to payday when their expenses are higher than their income. This often happens when credit is taken to cover emergency shortfalls, or when overspending on luxury items occurs. If you participate in mindless spending i.e. you don’t know how much you spend or on what, then this could also be contributing to the issue.

If this is the case and your expenses are higher than your income, then you may need to consider additional sources of income to cover the shortfall. Budget cuts can only take you so far. To generate additional income, you can look at some of the following options to begin:

• Taking on more responsibility at your current job in order to earn a raise.
• Taking on a part-time job.
• Making money from a hobby that you enjoy.
• Freelancing or consulting after hours.

But, before considering any of the above, it might be worth your while drawing up a budget which you can reasonably live by and abide to.

2. What are your priorities? What do you value?

If you value time spent with your friends, but are currently spending every weekend out at bars and clubs, is this the best and most affordable way to service this value? Are there perhaps alternatives to spending money on this value every weekend? A party at home will save significantly on costs compared to the alternative. Go through each and every one of your transactions over the last few months, and determine exactly which ones service your values as best they can, and which simply don’t. Do you regret any of these transactions?

3. Track, track, track!

Payday comes, and a few days later you’re broke. Yet, you have no idea how this happened, and no real knowledge about how you spent your money so quickly. To resolve this problem, track each of your transactions separately and class them. How much money did you spend on groceries? Is this in line with your budget? Should you perhaps look at cheaper alternatives, like No Name brands for example?

4. Stop your lifestyle from creeping up on you.

Many people make an incredibly good living yet still can’t make it to payday – this is because the problem isn’t how much you make, it’s how much you spend. It’s easy to convince yourself that your recent increase in salary means you can buy that new cellphone, or purchase that new lounge suite on credit. Are these wise purchase decisions though? Would it not make more sense to save at least 50% of your increase? Then, you’ll have funds available for an emergency, instead of borrowing money from friends and family because you’re living payday to payday.

Wise financial decisions are the only thing standing between you and the next payday. Try your best to keep track of your spending, and you won’t have the need to keep track of when the next payday is.