Are you always broke before the month ends? Are you one of those people who has marked the date your salary gets paid on your calendar because your account is already empty by then? Do you start dropping hints to your accountant a week before payday? It might seem like fun and games but that’s no way to live life.
If you’re always broke before the month ends, it’s a big problem. This means that until your salary comes, you basically suspend your life. Can you imagine if you have an emergency at that time? What will you do? Always being broke at the end of the month is a wake-up call for you to get your finances in order. A good place to start is knowing why your account gets red before payday. Here are five possible reasons:
1. You don’t have a budget
Budgeting is basically Personal Finance 101. You need to set a limit for what you will spend during the month and how you will spend it. Refusing to this will most definitely lead to overspending and overspending leads to brokenness.
2. You don’t track your expenses
Even after creating a budget, you must track your expenses to make sure you’re spending your money in the best way. The key to financial responsibility is not just saving but also ensuring that your resources are being effectively utilized.
3. You don’t have financial goals
If you were saving to buy a house or a car, it’s more likely that you’ll conserve your resources for important expenses only. So if you want your salary to count for something, set some financial goals and create a plan to reach them.
4. You are living beyond your means
It’s okay to splurge once in a while, but if you’re struggling to make appearances and compete with someone else, you’re putting yourself in trouble. The quickest way to financial trouble is living beyond your means. Don’t do it.
5. You buy on impulse
Buying on impulse is not a healthy financial habit. You can’t afford to buy everything you see and like. If you find yourself in this situation a lot, open up to a friend to keep you accountable and take her along when you’re shopping. Also, when you want to buy something, take four days to think about whether you really need it or not.
Before you go, here are five habits of the world’s richest people to copy in 2018.
Do you have any personal finance tips to add? Please share them below.