Living Pay to Pay

Image: Source Unknown

Image: Source Unknown

At the end of January, I made a big contribution to my RRSP (retirement fund), to the point of wiping out my cash savings. My next pay dates were February 6 and 20. For the whole month of February, I played a juggling game with cash flow. I came to realize how much I depended on a “float” of cash savings to get me through cash flow crunches between pay cheques. I talked about it previously here.

I could have contributed less to the RRSP, but I knew my cash flow would improve in a month or two, and I could absorb it.

Only my Internet bill is due mid-month, and the rest of the bills can be paid at month-end, except for ongoing expenses like groceries, and gas for the car. Because I have a high balance mid-month, it appears the money is just sitting there unspent, when in fact, it is completely accounted for, and needed for month-end. It sometimes cries out to me, “Why not order that DVD from Amazon?” or “You should go buy some tall boots at the end-of-season sale!” and I must resist.

The last week of February, I allocated some new planned savings amounts. On February 28, I had paid everything off and was ready to start a new month. I had held back just enough to get me through until my next payday on March 6. I calculated every last dollar. I had $29.75 left and I was going to spend it:

  • $7.00 skating
  • $10.00 parking fees for work meeting
  • $12.75 groceries

I was convinced I had accounted for everything. Well!

Right off the bat I had an expense of $23.15 for my volunteer job. It will be reimbursed to me…in a week or two. It was perhaps fortunate that I couldn’t go to either of my skating sessions this week because of a rearranged work schedule. That left me with $6.60, not enough to cover my parking fees for Tuesday’s meeting. Then, a second off-site meeting was scheduled without notice. My parking fees for both added up to $14.

As you might have guessed, I ended up borrowing against a small stash of cash that was set aside for another purpose. Rather than skipping a weekly grocery shop, we spent $51 on enough essentials to get through a full week (Mar 2-8). It covered fresh produce, dairy, and items for work lunches. Shamefully, I spent another $8 on completely unnecessary, but yummy, snacks. My second work meeting was an important one, so I got a haircut  – at my usual cheap spot, for $20, but still. I was sorely tempted to buy a new sweater for the occasion, but held off. So I arrived at payday today, with a negative balance of $86.40.

Why am I sharing this? As you know, I am not on a mandatory tight budget and I had access to additional funds. But this is the first time in many years of budgeting that I made myself accountable for overspending and truly knew what I would have had to do without. The answer: I would have had to put off my volunteer expense for a week, which would have inconvenienced other people who assumed I was covering it. Or, I would have had to spend a couple of hours taking the bus to my work meetings to save the parking fee, which would have eaten into my work day and created big inefficiencies at work (travel time not being productive). Or, more likely, I should have left myself more of a slush fund for such unexpected expenses, and I would have had to create that earlier in the month by cutting back on groceries or savings.

I am ever-so-lucky that this was a virtual exercise for me and not a real one. But it opened my eyes to the experiences of others who really do live from payday to payday, deciding which bills to pay and which to put off, and going without food to cover a school trip or a birthday card.

So for those who must budget down to the penny, especially the day before payday or at month-end, I salute you.


Spoiled Brat


  1. EcoCatLady

    Oy! I have never lived paycheck to paycheck, but I’ve been in relationships (both romantic and otherwise) with people who did. I personally don’t know how anyone does it without going mad. I seriously would not be able to sleep at night.

    But I firmly believe that living that way is a choice. OK… sometimes hard times hit us all, and I’m not talking about that… nor am I talking about people trying to support a family on minimum wage – what I’m talking about is the general tendency to plan on spending every dime that comes in the door. I mean… even back when I only made about $10K/year I still put money away in savings/emergency fund just because I couldn’t imagine not doing so.

    • I suppose I was thinking about those minimum wage / hard times situations, where you can’t cut your expenses any further, but unexpected expenses still crop up. It’s hard to climb out because you need a “slush fund” to cover all the minor unplanned expenses, without cutting into fixed costs.

    • Lisa

      You are more sympathetic than I, Dar. I was thinking more like Cat – I believe a large portion of Canadians (majority?) are living beyond their means. Take the Canadian debt-to-income ratio; “As of February 2013, Canadians’ debt-to-income ratio spiked above 164 per cent. That means, for every $100 of personal disposable income, Canadians owe $164.” I feel for those struggling to get by on minimum wage, and believe that, at least, the minimum wage should be raised yearly to match inflation (it is not in Ontario, and now falls short). For the rest, I struggle to feel sympathy for them.

      • I feel much more sympathetic toward people who have no money to manage, versus those who should have enough money, but struggle with the discipline to pay bills they should be able to afford! That debt ratio is scary – as Cat said, I couldn’t sleep at night if I had that much debt. It would be equal to someone with a salary of $50,000 having $82,500 in non-mortgage debt.

    • EcoCatLady

      I think my views on this topic are deeply colored by my personal experiences. Back in my 20’s I constantly found myself in the position of lending money to friends, roommates & boyfriends who made 2-3 times the amount of money that I did (more than that in some cases). I mean, here were people who were enjoying a lifestyle that I could never hope to afford – eating out several times per day, driving nice cars, buying new clothes, guitars, televisions, furniture, or what have you, yet they were coming begging to me for money (and I made less than $15K/year at that point). In most cases the money never got paid back, and I very quickly learned that lending money to friends and lovers is a BAD idea, and made a rule of never doing it again.

      But I’ve just always lived beneath my means. When I quit my job back in 2006 to set out on my own, several people at work made comments about how I didn’t have to worry about money. Apparently because I never seemed to be in any sort of a money crunch, a rumor had been circulating for many years that I was some sort of a “trust fund baby.” It still makes me laugh because nothing could be further from the truth. I came from a lower middle class background, got my first job at age 12, and aside from some help with college tuition and a few one-time nice gifts, I never got any financial support from my parents.

      Anyhow, I’m not trying to toot my own horn or anything like that, I just think that in general people have ridiculous expectations about the kind of lifestyle that they should be able to afford. People seem to take it as a given that they should be able to have a nice place of their own, drive a nice car, buy new clothing, eat out on a regular basis, and a whole host of other things that I would classify as luxuries rather than necessities.

      OK… I’m sorry to rant. I guess this topic sorta strikes a nerve with me.

      • Since I read so many “frugal living” blogs, I kinda forget there are still people like that…not so much in my world, I guess! In Nova Scotia we are known for being thrifty, kinda like our namesake, Scotland.

  2. I remember being a new mother and going to the supermarket with a calculator because I needed to stay within a very tight budget. Though I no longer need to be so rigid with budgeting I’m happy to have had the experience because I believe the discipline of living within your means to be very applicable throughout your life. I’m surprised at how many folks have never learned the skill.

    • I think the more common approach to not having enough money is skipping an expense – for example, buy enough groceries, but don’t pay the cell phone bill this month. Which means you are constantly playing catch-up, but I can understand the tendency to set priorities: “I need to eat, but I can do without calling my friends for two weeks.”

    • I have to agree Gam Kau – living on a small stipend as a student set me on my way of being thoughtful about things cost, and what were priorities!

      • For me it was paying off my first credit card debt, which had drifted up to 15-20% of my annual salary, and I thought that was outrageous and shameful at the time!

  3. Bless you for your understanding. I enjoy ‘pretend’ squeezes like you do too – and of course have the access to credit cards, which I use responsibly. I just hate eating into deep savings, and will use the credit card between pays, and pay it off instantaneously on being paid. Hate it when things don’t work out with the cash situation though, can seem so ‘un adult’

    • I knew you would understand – and I feel the same – if I can’t do it, with considerable effort, how much harder must it be for those without experience or skills? I try not to dip into savings most of the time too, but this was calculated (better to put more in RRSP before the deadline and make it up later),

  4. Fiona

    One of my best friends became a single parent when her husband left her for another woman, leaving her with a 4 month old and a 17 month old (and no family support; her mother had passed away.) She’s lived “week to week” for ten years, struggling to work, juggling child care etc. For years she had $14 per week “excess” in the budget…unless something ‘unexpected’ hit, which it always did. If the kids lost a school hat or glue stick at school, it was a financial disaster for the week. I know a number of other single parents at school in the same boat, although most have at least some family support.

    My BFF’s story has a happy ending, though. She and each of her kids were unexpectedly left a really large inheritance from a distant relative about 2 years ago. I’ve never known anyone who’s worked as hard or been under as much stress for a decade…everyone just said, “that was meant to be” when the inheritance happened.

    • That’s quite a story! Do you read the Girl Called Jack blog; I like her story. I’ve known a lot of people who lived like your friend and were very conscientious.

      • I have visited the Girl Called Jack blog before, but I mustn’t have added it to my feed reader. I just checked back then and it’s a great read!

  5. Good post! Even though we dont budget too tightly and always have money to fall back on if a big or unexpected purchase comes up, it is a good reminder that others may not have that option. I might try to make a formal budget and REALLY stick to it next month just for the exercise/discipline of it!

  6. Luckily I’ve never had this kind of experience (and I’m glad yours was not a serious hardship). But a few years back, my husband’s debit card was stolen, all the money in his checking account was drained within minutes. The bank froze the account and had to conduct an investigation before he could be reimbursed, so he was flat broke and unable to move money into the account for about a week. His parents covered 2 crucial bills for him – but what if they hadn’t? Very stressful! Hopefully we’ll never have to deal with another situation like that.

    • Wow! That reminds me of a co-worker who was paying bills online and accidentally sent $800 to her cell phone provider instead of $80. They agreed to straighten it out, but it took a week, and meanwhile she couldn’t pay her rent!

    • EcoCatLady

      Hey Amanda – don’t know if you’ll get this note or not, but I had a scare like that once – fortunately I only had credit cards, not debit cards in my purse at the time, but I did have a checkbook, and the checking account was set up to automatically deposit and withdraw EVERYTHING so it was a major disaster when I had to freeze the account and then reopen it with a new number, yadda yadda yadda.

      ANYHOW – as a result I decided to set up two checking accounts – one is the “main account” where everything gets funneled through. It has no bank card and the checkbook never leaves my house. The other is a “spending account” that has a debit card. I only keep a few hundred bucks in that account, and just transfer money into it as needed. Fortunately it’s never been stolen (I’m a lot more careful now) but if it ever was, the most I could lose would be a few hundred bucks and it would be a simple matter to close the account. It was pretty easy to set up and the peace of mind is HUGE.

  7. Sounds like me 😦 living pay to pay. Poor you though!

    • I only had to dip into my savings one week and pay myself back – not much of a hardship! But I would like to think I could stay on budget if I “really” needed to!

  8. I have certainly been there when I had my two kids and I was a stay at home mum and my better half was still studying on his 7 year course. However, with good budgeting we never got in debt although things were quite tight. I see a different side of things in my job where I have to assess peoples eligibility and when I see their bank statements I want to give them some sound financial advice – some people seem to be very poor money managers!! As they say it is not how much you earn but how you spend what you earn and this is so true.

  9. First time caller here. Thanks for following my blog. I was scrolling through various posts and found this one of interest. Here in the states, we have a huge poverty problem that does not get talked about enough. We have many who are living in poverty or paycheck to paycheck. In my volunteer work, we help homeless families, who all work, but have lost their home. All it took was reduced hours at work, a healthcare crisis, a loss of job, a car issue, domestic violence situation and the family lost their home. We help them climb the ladder back to self sufficiency. Unfortunately, our polarized politics get in the way of doing things to help in a productive way, so we have many at risk. Canada does more things right than we do to help people keep their head above water. Thanks again, BTG

    • Hi, thanks for stopping by! We like to think our social safety net is better in Canada but I’m sure that’s not always the case. However, the compulsory mortgage insurance program for home buyers probably helps. I am not a fan of our current administration. But the political parties are more alike than different!

  10. Thanks. From south of the border, I agree with your have a better safety net. On the political front, the major press we get here about your leadership is the sensational since you have an American style politician as mayor in Toronto. He would fit right in here with some of our narcissistic leaders who fail to realize they are the constant in every story.

    • My kid lives in Toronto and I am begging them to vote that guy out! I am hoping he’ll be convicted of something so he can’t re-run. The worst part is that if he is allowed to stand as a candidate, he may win, because he keeps taxes low and purports to represent the common doofus.

  11. I guess the question that is hard to quantify, but is very real, is how much does his tarnishing Toronto’s brand cost the area in lost business. In Charlotte, our mayor (who is a figurehead) resigned after being arrested by the FBI for peddling influence. Even though, his position does not run things, it was a blow to our city’s psyche.

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