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For the majority of my adult life, I lived paycheck to paycheck. I’d get my paycheck on a Friday and by the time I returned to work on Monday, it was nearly gone. I would use almost all my funds to pay the bills due the following week.
Sometimes, I would even have to play catch up with the bills from the previous week simply because I didn’t have enough money to cover all the bills. I thought I discovered a “hack” to help me get by. If I paid the bill within the 15-day grace period that most companies give before charging a late fee, I was good.
This was very ghetto; I do not recommend at all.
It’s safe to say I was very stressed and did not have financial peace. I was winging it after all and trying to figure out how the upcoming bills would get paid. It was a never-ending cycle.
The solution my family discovered to help stop this madness was to get a month ahead on bills. This was months after I first started budgeting.
I want to share this simple tip with you early on in your journey towards financial freedom to prevent you from making the same mistakes that I did.
Since getting a month ahead, our life, and finances, completely changed. We were able to set a realistic budget month after month, pay off over $18,000 in credit card debt, and save $10,000 towards purchasing a new to us car.
When’s the right time to work towards getting a month ahead?
Setting the goal to get a month ahead should happen early in your journey towards financial freedom. Simply put, this step should take priority over paying off debt.
Dave Ramsey fans hear me out.
Life happens and the only way we can be prepared is by preparing in advance. An unexpected expense can completely throw you off track and could take you even longer to get back in line.
So, once you’ve saved your $1,000 baby emergency fund (yes, I highly recommend this), then it’s time to work towards saving enough money to cover one month of your expenses.
How to break the paycheck to paycheck cycle
If you’re ready to break the paycheck to paycheck cycle once and for all like I did, keep reading to learn four simple ways you can get a month ahead on your living expenses.
Secret: You only have to do the steps below once. After you have a one-month buffer, you’ll continuously have enough money in your account to pay next month’s bills with the previous month’s income. This is a budgeting hack I highly recommend.
Create a budget
The first, and most important, step to getting a month ahead and taking control of your money is to create a budget. A budget is simply a spending plan for your money. It’s very necessary that you know, not guesstimate, how much money you earn monthly and how much your monthly expenses are. Once you have your budget created, you’ll know just how much you’re able to put towards your one-month savings goal.
Trim your expenses
When it comes to getting a month ahead, you should focus on minimizing your expenses.
Consider cutting back in some areas such as cable, canceling the gym membership you aren’t using or eliminating dining out altogether.
Trimming your expenses will help you free up cash and give you an instant raise. It may even bring back a few hundred dollars back into the budget that you can put towards your savings goal.
Save enough to cover your monthly expenses
The simple idea behind getting a month ahead on bills is so that you have enough in savings to cover an entire month’s worth of expenses.
If, after setting a budget, you realize that you don’t have enough cash left over, consider incorporating no spend days to maximize how much you’re able to save in a given month. You can also take on a side hustle or use cashback apps to bring in extra cash.
Remember, saving money isn’t about how much money you make; it’s about how much money you’re able to keep.
Use the current month’s income to pay next month’s expenses
Once you’ve finetuned your budget, you’ll start to see opportunities to build your one-month ahead savings. The amount you need to save will vary based on your monthly expenses and how conservative you want to be.
For us, saving enough to cover all our monthly bills was enough to make us feel secure. We were even able to create a few sinking funds to help us prepare for any large expense we may have in the future.
Benefits of getting a month ahead
Now that you’re well on your way to saving one month of expenses, it’s important for you to understand the benefits of doing so. As I mentioned above, getting a month ahead changed our lives completely.
- You can recognize just how much is coming in and going out monthly. I always knew that we made good money, but I didn’t know exactly how much nor did I know if our income was enough to cover our monthly expenses. I was basically saying a prayer every month and hoping for the best. Getting a month ahead helped us answer these questions and create a realistic budget monthly.
- You can celebrate small wins. Now that we have insight on our finances, we notice every little change that happens even that 3% merit raise that didn’t seem like much before. We use every victory no matter how big or small to help push us even further.
- You can create a realistic budget. At the beginning of our debt-free journey, we used numbers that were not in line with how much we were spending monthly. Then, I would get upset because we would go over in nearly every category. Now we’re able to use realistic numbers, not numbers that represent what we hope we’ll spend. If we have anything left over at the end of the month, we can either roll it to next month or use those funds to help us reach our goals quicker.
- You learn how to save money. Working towards getting a month ahead forces you to save a larger percentage of your income. Surprisingly, you don’t just know how to save money. You must be taught. The concept seems simple: get paid and put a portion away. Getting real with your spending, trimming your expenses, and being intentional helps change your money mindset, which helps you learn not to spend every additional penny you have leftover.
Getting a month ahead was one of the best decisions we could have ever made. It completely changed the way we think about money and the way we budget.
I hope this method helps you as much as it helped us.
As with anything, you must decide to make the decision to take control of your finances and then create an action plan to make it happen. If you do, I hope that you’ll discover what we did – that living off last month’s income changed our life.
My hope is that once you create your action plan, you’ll realize that you have more money than you thought you did to put towards your financial goals.
Are you a month ahead? If not, are you considering using this approach to help you transform your finances?