Believe it or not, there are people that make six figure salaries and still manage to poorly manage their finances. Running out of cash often has less to do with how much you make and more to do with how well you manage your money. Whether they get duped, or dwindle their money away on frivolous purchases, as many as 60% of Americans say they have at least one point in their lives when they’ve had no money at all!
Living paycheck to paycheck is no way to live your life. If this sounds like you, then take a look at some of the most common reasons why people run out of money before the end of the month.
You Don’t Budget
Budgeting is a critical part of managing your finances. Spending aimlessly without having any sort of plan is a fast track to money burning a hole in your pocket. Budgeting is all about allotting only certain money for each area of your spending.
That way, you know that you’re prioritizing your money for the most important bills and expenses first. If you spend your money freely without clarifying where it should go first, then that’s usually the cause for your important bills being left unpaid.
You Have Too Much Debt
Far too many people make the mistake of relying on their credit cards as if it’s real money. Running up too much debt on your credit cards will result in paying hefty bills every month with interest on top. You could conceivably be paying for something years from now that you don’t even remember buying!
It’s important that you pay off your credit card in full every month so that you don’t find yourself stuck under a mountain of debt. If your monthly credit card bills take over half your paycheck, then you know you’ve got to make some serious changes.
You Buy Things Impulsively
If you’re the kind of person that receives an email from your favorite online store that they’re having a sale, and the next thing you know, your cart is full, and you’re ready to check out, then you are definitely an impulse buyer! The problem with impulse buying is that you usually wind up buying things that you don’t actually need. Every once in a while, an impulse buy can be a nice and exciting way to spend your money. However, if you’re regularly making unplanned purchases and running out of money at the end of the month, then there’s obviously a disconnect that you need to fix.
With a little extra self-awareness and a dash of self-discipline, you can curb your spending habits and improve your financial situation. Focus on saving and prioritize your bills before impulse purchases, and you’ll already be on track to recovery.