Are you surviving from paycheck to paycheck ?

“It’s 9th of the month and I have no money in the account. Can you imagine waiting for the next pay check only to make ends meet and for making bill and EMI payments? My mother asked for some money last month and I had to say no. It was embarrassing,” said Anshuman, my ex colleague.

“I can relate to this. The only difference is that I never compromised on ‘paying myself first’. Thus all my monthly savings and SIPs were there for my rescue”, I responded.

“When I was single, I used to live like a king! Look at my condition now”, he said.

I laughed at it but he was serious and asked for help. (not for money but for a solution!)

You are living from paycheck to paycheck when you are constantly asking for money from family & friends or when you are looking for personal loans to pay even your routine expenses and are using credit card for postponing payments.

Either you are not making enough money (which is a common excuse) or are overspending. In the first case, you will obviously have to look for a new job or for additional income sources. If your current financial condition is due to overspending, chances are that you don’t even know about the problem area.

This kind of existence can be quite damaging and detrimental to long term financial health.


You start waiting for the next paycheck from 7th of this month                   majority of the cases can be attributed to overspending.”I don’t know where my money is going” is a common statement, because you never make an effort to find out the reason

Routine bills go unpaid                                 if this continues for 3-4 months; you are in trouble. The debt starts mounting- an immediate action becomes imminent

Credit Card usage goes up                           you know the situation is bad when you start using credit card even for a haircut! Excessive usage gets you into the minimum payment cesspool in no time

No second source of income                      the problem is more pronounced in single income households. Even otherwise, if salary is the only source of regular income, the problem gets aggravated

No emergency fund                                       you always know that this is a great step towards financial security but keep on postponing only to regret later

Debt burden at alarming levels                 you have exhausted all debt sources like personal loan, cash advances and loans from relatives or friends. Essentially the entire paycheck is being utilized for paying off these loans.


Budget                                                 creating a budget is easy – following it is what makes the difference. We generally find it difficult to stick to a budget because the list can be quite comprehensive.

Look for an online budgeting tool or download an app. Account for all current and future expenses-fixed as well as floating (Insurance premiums, AC bills during summers, upcoming family function etc). When you follow a budget, there is always room for adjustment under different heads.

Spending pattern                            track expenses for two-three months, go through your credit card statement (if you are still using one) carefully. You will get a fair idea about your spending pattern and would be amazed at the findings. Your focus should only be on things that really matter.

Forced savings                                  set up an auto debit for a specific amount every month. Initially you won’t notice the difference. Once it builds up to a considerable amount, you would be tempted to enhance the savings rate. This simple step gives you the much required peace of mind.

Cut your expenses                          you need to figure out what works for you and measure its impact. A friend moved last month from a big three bedroom flat to a two bedroom flat, saving INR 8000 per month, which was substantial even after taking into account the one time shifting cost. There are certain seemingly small monthly recurring expenses, which have a major overall impact.

Get out of Debt                                                easier said than done, right? But it is all about the choices we make. A personal loan for an international holiday, EMI on credit card for the latest phone, car loan for the latest launch-everyone thinks that instant gratification is the key to happiness. Do not fall for this trap as it will result in piling on more debt. Pay off all your expensive loans on priority.

Curb that spending habit                             the test that works for me is the one month challenge- If you think there is a requirement for the product on day 30, buy it. Another rule to follow is to have an equivalent amount in your savings account, even if you are making the purchase through credit card. Stop using cards just for earning reward points when you already have converted previous purchases into EMIs.

Behavioral Change                                       there is a difference between things you ‘need’ and things you ‘want’. Spending intelligently and less than what you earn is the right perspective. Sometimes you are using 2-3 credit cards just for transferring balance from one to the other considering it to be an intelligent choice. Your attitude towards money is a major game changer.

Discuss your finances                                    one of my friends had hidden his poor financial situation from his wife for a few months. She later paid all his credit card dues from her savings. Being open about your money mistakes helps, although this is one area where utmost secrecy, even from the spouse has become a norm. Identifying people you are comfortable with, about discussing financial matters proves to be very helpful.

Getting ahead financially is not possible if you are living from paycheck to paycheck. You will have nothing to save and thus wealth creation would remain a dream.

Financial prudence is not about paycheck to paycheck existence but about bringing rigor and discipline, applying controls and bringing a change in mindset.

Assess your current situation and work towards becoming financially savvy.


6 thoughts on “Are you surviving from paycheck to paycheck ?

  1. Well expressed Karunesh. People who are reading and who would be reading it would relate the same.. We can make dual employment need for the hour. So that we can put a check on our expenses and at the same time use as many debt free credit cards…. Cheers! Commendable writing.


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