# Living paycheck to paycheck? Why your pay runs out

Your salary runs out early for one of three reasons: the money for the whole month sits in one account and looks bigger than it is, costs that come once a year arrive as surprises, or your bills are too large for your income. The first is the most common, and the fix is one number: what you can spend per day until you are paid again. Work out yours below.

## Why does a full account feel like more money than it is?

On payday your balance shows the whole month at once. A salary of 3,000 looks like a lot. But if giving, bills, savings and debt take 2,100 of it, the amount you can really spend is 900, and it has to last 30 days.

Without that number, the first week is spent at the speed of 3,000. The last week pays for it.

## What is a daily number?

It is what is left to live on, divided by the days until you are paid again. With 900 and 30 days, that is 30 a day, or 210 a week.

It works because it is small enough to compare with a real purchase:

- **Spend less one day** and the difference carries over to the next.
- **A big day costs several small ones.** A dinner at 120 uses four days. It may be worth it. Now it is a choice.
- **Prefer weeks?** Take 210 every Monday. One check a week is easier to keep up than one a day.

## What do I do when I have overspent?

Count again. Divide what is left by the days that are left, and use the new number.

| Where you are | Left to live on | Days to payday | Per day |
|---|---|---|---|
| Payday | 900 | 30 | 30 |
| Day 10, on track | 600 | 20 | 30 |
| Day 10, after a heavy week | 450 | 20 | 22.50 |
| Day 20, after ten careful days | 300 | 10 | 30 |

A heavy week does not ruin the month. It lowers the number for a while, and a few careful days bring it back.

## What about costs that come once a year?

Insurance, school fees, holiday gifts, repairs. They feel like surprises, but they come every year. They are bills with a longer gap.

List them, add them up and divide by twelve:

| Cost | Per year |
|---|---|
| Insurance | 600 |
| School costs | 900 |
| Holidays and gifts | 600 |
| Repairs | 300 |
| **Total** | **2,400** |

2,400 a year is 200 a month. Set that aside every payday as one more bill, and in the month a large cost arrives, the money is already waiting.

## What if my bills are too large for my income?

Then no daily number will fix it. If very little is left after payday, the problem is the size of the bills, and cutting small pleasures will not close the gap.

Look at your three largest costs first, usually housing, transport and food. One change there is worth more than ten small ones. The other side is income: a raise, extra hours or a second source.

## Should I keep spending money in a separate account?

It helps. When the bills and the savings leave on payday, the balance of your daily account tells the truth: what you see is what you can spend. Some people use a second account, others take out cash for the week.

It is not required. A daily number that you check once a week does the same job.

## Where do I start this month?

1. Write down what you earn.
2. Subtract everything that leaves on payday: giving, bills, savings and debt. The [payday routine](/blog/what-to-do-on-payday) gives you that list.
3. Divide the rest by the days until you are paid again.
4. Check once a week, and count again if you are off.