Living from Paycheck to Paycheck? Here’s the Easiest Way to Know How Much You’re Spending (or Overspending!)

how to track spending

Jeff Cuellar



Let’s be straight about one thing – it sucks living from paycheck to paycheck. If you’ve been fortunate enough to have avoided this situation throughout your lifetime, then count yourself lucky.

Because few situations are as stressful as not knowing whether you’ll have enough cash to last until the end of the month. Sadly, it’s a situation that too many Singaporeans live with – but it doesn’t have to be that way.

The first step to getting out of the paycheck to paycheck cycle is to know where your money goes every month. That way, you can know how much you’re spending and what you’re spending (or overspending) on.


Why Do People Live Paycheck to Paycheck?

Nobody wants to live from paycheck to paycheck. So why do so many people have trouble making it from month to month? Well, there’s no concrete answer to that question because everyone has different financial situations.

But one thing most people living paycheck to paycheck have in common is this – for one reason or another, they simply cannot save!

There are also plenty of other contributing factors that keep the paycheck to paycheck cycle going such as:

  • No Savings + Bad Luck: Having no savings is bad enough, but if you throw a financial emergency into the mix, it can turn a bad situation into a complete disaster! If you don’t have the savings (emergency fund) to handle emergencies such as retrenchment or out-of-pocket medical expenses, relying on credit cards or your friendly neighbourhood Ah Long will sap your income.
  • Overspending: Spending your paycheck as soon as you see it credited to your bank account is practically guaranteed to put you on the paycheck to paycheck cycle AND keep you there, especially if you’re an emotional spender.
  • No Budget/Not Following Your Budget: Creating a budget is one of the most important financial moves you can make, because it shows you how much you’re making and how much your expenses are. Unfortunately, some people either never create a budget, so they really don’t know how much they spend. Of course, even if you create a budget but don’t follow it, it’s just as bad as not having a budget at all!


Figuring Out How Much You’re Spending

Is it impossible to get out of the paycheck to paycheck cycle?


Is it easy to get out of it?

Yes and no.

Yes – once you figure out how much you’re spending, it’ll be much easier to escape the reality of living from paycheck to paycheck.

No – it won’t be easy (it won’t be hard either), but with some patience and planning, you can finally get a handle on what you must do to have more cash in your bank account at the end of each month.

Here are four steps you need to take so you can fight your way out of the paycheck to paycheck cycle:


Step 1: Take Stock of Your Financial Statements

Yes, step #1 will be tedious. But it’s something that must be done. You’ll need to start by collecting all of your financial statements. Hopefully, you’ve sorted out your statements and they’re easily accessible.

If you just throw them away though, you might still be able to retrieve your statements electronically.

You’ll need to dig through the following financial statements:

  • Bank Statements
  • Credit Card Statements
  • Utilities Bills (power, water, phone, etc.)
  • Loan Repayments (home loan, car, taxi, etc.)
  • Credit Card Balances

To get a better picture of what you’re earning and spending every month, you’ll need to dig for statements going back at least six month (ideally, you’ll want to go back at least a year).


Step 2: Sort Your Spending into Categories

After you’ve hoarded all of your financial statements going back at least six months, it’s time to sort out all of your spending into different categories.

As you sort out your various statements, some categories will become immediately apparent such as utilities, loan repayments, groceries, dining out, travel (gas, mass transit), etc.

Pay very close attention to how much you spend on maintaining your “lifestyle” especially! Check both your credit card and bank statements to see how much you spend each month on “wants” as opposed to “needs”.


Step 3: Add the Numbers Up

Step #3 is quite easy – all you have to do is add how much you’re spending per month on each category. You’ll need to add up the numbers for at least six months, but the reason for this is so you can see how consistently you spend per month on each category.

Once you add up all of the numbers, you should get the big picture of what you’re spending on and how much per month you’re spending on each category.


Step 4: Get the Big Picture on Why You’re Living Paycheck to Paycheck

Seeing the big picture of how much you’re spending each month will probably be an eye opener. Seeing how much you’ve been spending over the course of several months will immediately show you whether you’ve overspending in a particular category or not.

If you spend too much on dining out every month, it’ll become apparent.

If you spend too much on taxi rides every month, it’ll become apparent.

If you spend too much at Orchard Road, it’ll become apparent.

If you spend too much at Orchard Towers, it’ll become apparent.

Well, I think you get the picture right?

OK, so the point of being shocked by what you’re spending on and how much you’re spending each month is simple – to cut back on categories where you’re overspending.

Of course, not everyone has the same financial situation. One person might live paycheck to paycheck because of bad financial habits, while others live this way (even though they are frugal) because they don’t have the income.

If that’s the case, you might want to check out our Career Learning Center to get tips on how to improve your job situation.



Do you know how much you’re spending each month? Share your experience with us on Facebook! For even more useful information on everything personal finance, visit MoneySmart today!


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Jeff Cuellar

I'm known by many titles: copywriter, published author, literary connoisseur, ex- U.S. Army intelligence analyst, and Champion of Capua.