Given the state of the economy, job losses which can result in significant life changes and the inevitable struggle to pay bills are expected.  However, the biggest culprit seems to be overspending and the lack of a financial plan.

Every time someone says: I’m broke… I don’t know how I’ll make it to payday…I need to make more money… I can’t keep living like this…. I ask them so how much did the 6 happy hours this month cost you?  How about the weekend trips to the club or random shopping sprees cluttering your closet with things you don’t need? So let’s think about that for a moment.

What are you doing to sabotage your own financial success?


How much longer will you pretend that you can afford to hang out with your friends?  That you can continue shopping for things you can’t afford to keep yourself occupied, fulfilled and free from boredom?  Meanwhile your bank account is on it’s last dollar?  You can’t, it’s that simple.

If it isn’t necessary then you can’t afford it.

Action items:

  • Pull all of your transactions into and start there.
  • Categorize them and then take a look at how much you are really spending.
  • Get a piece of paper and note your total income.  Create 2 columns, one for bills/necessities and another for unnecessary items.
  • How much are you spending on bills?  Subtract that from your total income.
  • How much are you spending on unnecessary items?  That’s how much you could be saving and/or putting towards debt reduction.

This leads to my next point….


Now that you understand how much money you’re wasting,  redirect your spending to sacrifice in order to get ahead  No one wants to hear this, not even our government, but we have to start some where.   Continuing to hang out with your friends after work and on the weekends sacrifices your financial goals.  Think ahead to whether not the good times now are worth the continued pain of being flat broke with no safety net now.

You can make it to pay day if you get out of your own way and sacrifice to get there.

Action items:

  • Start cutting back on happy hours, eating out and random shopping sprees
  • On payday, pay yourself first to a bank account that you don’t access to.  The amount that you spent on unnecessary items, take at least 50% of that and put it into savings OR debt reduction and allocate the other half to savings, checking account cushion or emergency fund.

Focus on Your Goals

Laser focus.  Everything you spend, consider for a moment whether it is a bill or not?  If it isn’t a bill being paid or a necessity then you don’t need it.  This applies for those of you living paycheck to paycheck with no money 4 days before payday.   Yes, I am talking to you 🙂  You don’t have money for entertainment or frivolous purchases.  Focus.  Look back at the silly purchases made last month and be mindful of the ones you are making this month.

Action items:

  • Once you have all of your transactions loaded into Yodlee, check it every day.  Every day you make a purchase, log in to make sure it has posted.
  • Categorize the transactions
  • Create your budget thresholds
  • Monitor throughout the month, your spending on all categories, paying special attention to the Bills Vs Wants categories.  I wish there was a way to group transactions but I haven’t figured out a way to do this yet.

So what do you think?  What kind of changes can you make to make it to payday and have some leftover?

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