2014-04-16 / Columns

Fiscal Fitness

Running Short Of Cash?
by Kara Gunderman
AVP/Sr. Community Bank Associate, OCB

You’re out of both groceries and cash, but payday is a week away. Many people in this situation reach for the credit card, forgetting that all those bills add up. Others turn to a “payday loan,” not always realizing that the fees for these brief loans may equal several hundred percent – and there will be more fees if the loan isn’t paid on time.

There are two strategies for making your cash last until your next paycheck, but neither is really a secret. The first is planning. Make a list of your regular monthly expenses, starting with your rent or mortgage payment and covering everything from utility payments to groceries. Add up those expenses and subtract the total from your take-home pay. The number you get is your “discretionary” income – what’s left over after you meet expenses.

What should you do with that “extra” income? That’s where the second strategy comes in. The better you become at controlling your spending, the more control you’ll maintain over your finances. Most people spend money too freely, buying things they want rather than the things they need. You can only spend money once, so be sure you’re spending carefully. Better yet, take that “extra” income and put it in a savings account for future needs.

No, taking control of your cash isn’t easy – and it may mean giving up some extras. But in the long run, you’ll find that life is a lot less stressful when you’re not always running out of cash.

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