What to Do When Your Month Is Always Longer Than Your Paycheck

We all have had seasons when our money runs out before the next paycheck. One of my readers asked how she could get out of the cycle of always using current month’s paycheck to pay for last month’s bills.

Speaking from experience, this can be very demoralizing, especially if you’re hoping to be financially free some day. For the longest time, I had this problem, but it was well concealed behind a veil called a Credit Card (Are credit cards necessary?)I would shop and fuel using my credit card, ensuring that I had cash in my bank account at least till the last week of the month. The only problem is that this was concealing an obvious problem: I was living above my means, and each month it got worse:  paying off my credit card every subsequent month meant I had increasingly less money to spend, and my month was getting longer and longer, it was a trap!

How did I get out?

1. Face the facts: When you find that your month is longer than your paycheck, it means that you’re committing the first personal finance sin:living beyond your means. In this post, I gave 5 ways to spend less than you earn. The first step is to establish what you’re spending your money on. I cannot reiterate enough the importance of expense tracking, if you hope to some day take control of your expenses. Starting this month, track every single shilling you spend, including borrowed funds and bank charges.

2. Trim the excess fat: Once you have a list of previous month’s expenses, create budget that enables you to live within your means. This will mean chopping off certain items you have been spending on that aren’t necessary. This will hurt in the first month when you have previous month’s expenses to settle, but it’s necessary. For me, this meant less unnecessary food shopping and eating out. Food shopping could sound reasonable, but the fact that I love cooking meant I was buying way too many fancy ingredients to have fun with in the kitchen. These were chopped off.

4. Stop using the crutch:In my case, the credit card was aiding the over spending habit, I got rid of my credit card. For someone else, it could be a credit line at a local kiosk or a friend who lends you bridging finance when the money runs out. This is an enabler to your overspending habit, cut it off. It will hurt, you’ll have to eat “ugali and sukuma wiki” for a month, and skip the Java coffees, but it’s worth the pain it saves you.

What if…

I can’t settle the debt I have accumulated in one month, and still have money remaining to spend on the month’s basic expenses? The most painless way of dealing with the short month problem is to borrow once (a cheap SACCO loan, or get a friend /relative/employer to give you a soft loan), to level off your finances, then factor in your repayments in your budget and move on. But then, you have to contend with the cost and insecurity of debt until you’re done repaying.

After doing my budget, I still cannot afford to pay for all my basic needs?That’s a difficult one, means you probably need to find a way to increase your income. Use your skills and extra time to increase your income. I’ve written about this before; here and here. Also, critically consider your circumstances, are there radical measures you need to take to free up your finances? Should you move to a much cheaper house, or maybe consider getting a house mate to reduce rent and food expenses?

There’s no easy way out of this, most people choose to ignore personal finance principles, but remember, ignoring a principle doesn’t insulate you from it’s effects. If I decide today that I don’t believe in gravity, I won’t start to fly. The principles work for us, and against us.