If there’s one thing consumer product researchers have learned about the recession, it’s that many of us have entered a pattern of spending more when we first receive our paychecks. During this so-called “paycheck cycle”, product manufacturers see a jump in sales in tandem with when most people get paid, then a drop-off in sales the further away we get from our most recent payday.
Many product brands have reported higher sales at the beginning of the month, corresponding with the timing of monthly paydays and government payout days for those on such assistance programs as food stamps. This suggests that many lower-income consumers, as well as those living paycheck-to-paycheck, put serious consideration into when they’ll purchase certain items. As a result, some brands have been timing sales and coupon releases around such buying habits.
Products most affected by this trend are value-priced items like frozen dinners and Ragu pasta sauce. However, even premium and subpremium (higher quality but still fairly affordable) items have followed the same trends. This suggests that many of us are smart payday spenders – but some of us could use some help improving our payday spending habits.
How do you budget your paycheck? Here are some tips for making your money last as long as possible:
- Pay all your bills on payday regardless of their due date. This way, you’ll be covered for the whole month, you won’t risk late
fees, and your credit score will improve as you pay all your bills on time.
- Pay yourself – put what you can into savings.
- Buy groceries, gas, toiletries, and other necessities while you have cash to avoid charging them when your account is low.
- Avoid shopping sprees, big dinners out, or other unnecessary purchases that will drain your account immediately after being paid.
- Always budget your money! If you have more than expected left right before the next payday, avoid splurging – put the money into savings instead.
Budgeting your money and spending wisely around payday will help your money last longer. Pay for your necessary items like bills and food first so that you’ll know exactly how much spending money you have left. Remember to follow these easy steps to make sure you’ll never wake up five days before payday with no money in your account and no food left in the fridge.
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