Research shows more than half of Australians run out of money before their next pay day,  but it is possible to break the pay cheque to pay cheque cycle. Here’s how. 

Data from comparison website Finder shows 52% of Australians  “occasionally or always” spend their pay before their next salary instalment arrives¹.

By any measure it’s a grim statistic.

It doesn’t make for a relaxing lifestyle either.

7 strategies to break the cycle

Fortunately, there are ways to break the pay cheque to pay cheque cycle.

Here are seven strategies to help break the bad habits that could be keeping you from busting out of a high-stress money trap.

1. Tracking spending

If you find yourself scratching for cash several days (or even weeks) before your next pay day, it’s time to stop ‘guestimating’ how much you spend on a regular basis.

Keep a spending diary for a week or a month, or simply look through your everyday account to check the transactions for each period. It can be a real eye opener.

It will show exactly where your money goes – from the essential to nice-but-not-necessary purchases all the way through to impulse buys.

Knowing your own spending patterns is the critical first step to understanding how you can rein in spending without compromising too much on your lifestyle.

2. Create a realistic budget

Budgeting is the foundation of growing savings. It hinges on spending less than you earn with the difference going towards personal savings.

Armed with a realistic budget you are in a much better position to know when to say ‘no’ to various purchases.

Use our expense planner to kick start your budget.

3. Build an emergency fund

An easy alternative to budgeting is the ‘pay yourself first’ method to grow an emergency fund.

You simply decide how much you want to save each pay day, then set up an automatic transfer of funds from your everyday account to a high interest savings account.

The balance in your everyday account is yours to spend as you choose. Just don’t dip into your savings!

You could be surprised at how quickly you can grow emergency savings this way.

The beauty of having a pool of savings is that you have funds available when those inevitable unplanned expenses arise.

That way you won’t need to rely on debt including a high-interest credit card to cope with an emergency bill.

4. Reduce debt

The sooner you can pay down debt, the less you pay in interest.

Makes sense right?

Interest charges just add to the cost of purchases, and this can quickly take the shine off a bargain. Paying interest also caps your ability to grow savings.

An important first step to reducing debt is to be sure you’re not paying more than necessary in fees and interest.

Easy Street makes it easy to get ahead with credit card debt with our 12-month interest-free balance transfer.

Or think about refinancing your home loan or personal loan to Easy Street and enjoy competitive rates and flexible features that can help you clear the slate sooner.

5. Automate savings

In our busy lives, there’s a lot to love about putting savings on auto-pilot.

Use your budget to decide how much you can afford to save each pay day – or how much you need to save from each pay cheque to reach a savings goal.

Then, set up a regular transfer to your Easy Street savings account. Start small to begin with, and save an amount you won’t miss. Then you can increase it from there.

Our generous rates of interest will do a lot of the heavy lifting helping your achieve your goals.

Better still, Easy Street gives you a choice of two online savings accounts – our Bonus Saver and an Easy Savings account, so you can mix and match to suit your savings habits and goals.

6. Avoid lifestyle inflation

Lifestyle inflation, also known as lifestyle creep, happens when we increase personal spending in line with a rise in income.

A simple way to avoid this problem is to increase your regular savings whenever you enjoy a rise in your income. Do it yourself in Internet Banking or ask us about periodical payments.

7. Stay disciplined and review progress regularly

Saving may not be as much fun as spending, but it feels good to have a pool of spare cash behind you.

It can also be a real stress buster as you will no longer have to count down the days until your next pay day.

It can help to set realistic, measurable savings goals to work towards.

Either way, review your progress regularly, and reward yourself for reaching small milestones. You can set a savings goal in the Easy Street app and track your progress each time you login.

Growing savings may not happen overnight. But with dedication and persistence, you can beat the pay day to pay day cycle.   

 

* Credit eligibility criteria, terms and conditions, fees and charges apply.

 

^[1] https://www.finder.com.au/news/aussies-run-out-of-money-before-payday-2024

^[2] https://www.finder.com.au/news/aussies-run-out-of-money-before-payday-2024