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TICK. TICK. TICK. COUNTING DOWN THE SECONDS UNTIL YOUR NEXT PAYCHECK?

red shoes

And hoping you can get by without pulling out the credit card?
You can do it—here’s how!

Unless you’ve recently won the lottery or are independently wealthy, you have to deal with this thing called a paycheck and the reality that it can be hard to s-t-r-e-t-c-h your pennies from one paycheck to the next.

Sure, you can always pull out a credit card if you get in a pinch, but do that too often and you’ll just create another problem for yourself (check out this post on credit card debt).

What’s the solution? Changing your cash flow so you have more money, more often. Here’s how.

Step 1: Create a schedule of your income and outgo. 

Start by getting a better idea of when your money is coming in and going out, and where it’s going to. Get out a calendar and write down the following:

  • When your bills are due and how much they’re for.
  • When you’re paid and the amount you’re taking home each paycheck.
  • When you tend to grocery shop and run errands and approximately how much you spend each time.

Do your paychecks vary A LOT?

If you’re someone who sees big swings from one paycheck to the next, you’re not alone and you might need more help to get your cash flow on track. Please call Summit to set up a personalized review of your finances.

Step 2:  Analyze the timing

Look at when you earn and spend your money. How often are you paid? Twice a month is common but your pay period could be different. How does paycheck timing line up with your bills? Do all your bills come out of one paycheck? Are you stressing out half the month, then feeling irrationally exuberant and spending too much the other?

Step 3: Change your monthly cash flow

If the timing on your bills is pretty evenly split, improved cash flow is probably a matter of more realistic spending. This post could help you get there.

But if all your bills come due in one pay period, you have two choices:

  1. Contact your utility/service providers and see if you can switch your payment due date to your other pay period.
  2. Create your own artificial due date.

The second route takes a bit more discipline, but we know you can do it with some help from Summit’s online branch.

Step 4: Take advantage of Summit’s online banking

Online banking makes it easy to improve your monthly cash flow. Just do the following:

  • Divide each bill amount in half.
  • Open a sub savings account in online banking.
  • Create an automatic transfer on the days you get paid and put the cash to pay half of each bill into this account. Bam! That money is safely tucked away and you’ll have a more realistic idea of what you can really afford to save and spend each paycheck.
  • Time to pay a bill? The money is already in the sub savings account, just transfer it back into checking.

Sure, it will take a little time to analyze everything and set up these accounts, and it might take a few months to get used to the new system. But once you do, whew! The sense of relief will make it all worth it.