Save money – 4 most common reasons why wages are not enough
The salary is eaten, the balance on the account is close to zero. And the kids need both new overalls and new winter boots. What do you do?
The everyday economy is a tricky chapter for many. Most people get their salary at the end of each month and then it is thought that that money will be enough for all expenses over the next thirty days. For some, this works well, but for others it is almost impossible to get the equation to go together. How’s that for you? Do you have money left at the end of the month or is it the opposite?
There are various reasons why the money may run out long before new ones come in.
Here are the most common:
- The family’s necessary expenses are greater than the income.
- Money is burning in his pocket. When the salary has come, you want to treat yourself and do more than you should.
- You have not calculated how much you can spend per day for the money to last the month.
- It incurs unforeseen expenses during the month.
The solution to the problem
There is, of course, not a single solution that fixes all problems, different causes obviously need different solutions. So the first thing you need to do if you have a blank account at the end of the month is to find out what it is that is messing with it in your particular finances. Once you know it, you can start correcting it.
Here are some suggestions for solutions:
The family’s necessary expenses are greater than the income
This is a tricky situation that often requires quite radical measures. Either you need to find a way to increase your income. Maybe by applying for a new job or taking an extra job? The other way to go is to reduce spending. Find a cheaper accommodation, sell the car and start going municipal? If you have a loan, you can cut costs by collecting them. Also, prioritize paying off the loans as fast as you can; it will help your finances in the long run. Here you can read more about why it is a good idea to collect your loans.
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Money is burning in his pocket
It’s a wonderful feeling to have plenty of money in your account. When the salary has rolled in, you are rich as a troll! Or you have been living on instant noodles for two weeks until the salary and think you should really enjoy and treat yourself now that the money has come in. Absolutely – but if you do, it will be fast noodles again at the end of the month.
Make a budget, before the salary has come and figure out how much you need to live the good month. Then you can see how much you can afford to get rid of on the holiday weekend without being sabotaged for the rest of the month.
Money per day
Making a budget may sound boring – but it can do wonders for the economy so it’s worth it. Find out how big your fixed costs are each month (and remember to include the savings) and think about what larger purchases you will need to make over the next few weeks (those overalls for the kids for example). Calculate how much the fixed costs, savings and purchases will be and then calculate how much money you have left. Divide that sum by 30, so you get how much you have to live on per day. It gives you a good guideline for how much you can shop for in the grocery store, if you can treat yourself to that stylish sweater or if you should skip lunch in town and bring your lunch box to work instead.
No matter how much we plan, we cannot always predict all expenses to come. Suddenly the fridge pies and needs to be replaced immediately. The dog gets sick and has to go to the vet. The car strikes, the boiler shuts off and the zipper on the winter boots breaks.
The best thing we can do to cope with economic cold showers of this kind is to create a buffer, a savings capital that can only be used for large or unforeseen expenses. The easiest way to build a buffer is by saving monthly. Determine a sum to be deducted from your regular account and deposited into a savings account, each month, immediately after pay. Even if you can only deposit a small sum, it will grow over time.