When All Your Money Goes to Bills…

By Ashley Kilroy · November 14, 2022 · 9 minute read

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When All Your Money Goes to Bills…

Do you pay all of your bills and then feel as if the amount of money you have left over for your financial goals is a big zero? Unfortunately, many Americans live paycheck to paycheck (61% of us, according to a June 2022 PYMNTS study) , and economic trends such as inflation can strain even the most financially stable households.

It’s a frustrating feeling not to have cash to put towards longer-term goals like, say, buying a house or retirement. While every person’s financial circumstances differ, your budget should allow room for important goals, such as building an investment account or padding out an emergency fund.

So if you’re wondering, “How much extra money should I have after bills?” the answer is definitely not nothing. Saving money after paying for your expenses can be challenging, but it’s critical for financial wellness.

This guide will help you understand and answer the question how much extra money I should have after bills and how to save every month even if you’re strapped for cash.

What Is a Good Amount of Money to Have After Paying Bills?

How much money should you have after paying bills? There’s no one answer; it really depends.

Everyone’s financial circumstances are different, so it’s hard to pinpoint a good amount of leftover money after bills. For example, you might have a medical bill weighing down your otherwise healthy budget. Or you could have limited income as a student or retiree.

In most cases, it’s vital to prioritize spending on your needs and stay motivated when paying off debt. You can also begin stashing away cash for other goals.

With this perspective in mind, the 50/30/20 rule represents a good way to allocate money. The numbers act as a guide: 50 percent of your income pays for necessary expenses like food, housing, and debts (like a student loan). Unnecessary expenses, like entertainment or dining out, are considered wants, not needs, and they account for the next 30 percent. Finally, 20 percent of your income goes toward investments and savings.

As a result, it’s recommended to have at least 20 percent of your income left after paying bills, which will allow you to save for a comfortable retirement. If your employer offers matching 401(k) contributions, take advantage so you can maximize your investment dollars.

Otherwise, you can start your own individual retirement account (IRA) and make similar contributions to fund your lifestyle later in life.

Recommended: Check out the monthly 50/30/20 budget calculator to see the breakdown of your money.

Tips for Managing Your Bills

Sometimes, though, putting aside 20 percent (as noted above) can be a real challenge. Paying your bills in full, on time each month, can be challenging. Use the following techniques to ensure you can comfortably afford your monthly obligations:

Getting to the Root Cause

If you often scramble to make it to payday, there’s likely a problem lurking in how your income and expenses are aligning. Fortunately, dozens of apps and bank services are available to help you see where each dollar goes every month. Of course, you could also keep paper receipts and bill statements the old-fashioned way. In any case, these tools can show you if you’re spending too much at restaurants or if you should up your income through a new job or a low-cost side hustle.

Organizing Your Bills

Everyone has monthly obligations. One thing that can help you get on top of those living expenses: taking the time to organize your bills? Depending on when certain bills arrive and what they pay for, you may want to shift around when and how you pay them.

For example, it might help to set up automatic bill payment for utilities or student loan payments so you make sure those important expenses definitely get taken care of on time. Focus on paying for only the most necessary expenses. By cutting down on impulsive buys, you can help put more money in your pocket.

What Are the Bills That Are Necessary to Pay?

The following bills are essential for the average American household:

•   Rent or mortgage for housing

•   Food and toiletries

•   Utilities such as gas, water, and electricity, as well as WiFi

•   Transportation expenses, such as a car, vehicle upkeep, or bus pass

•   Minimum debt payments on student loans or credit cards

•   Premiums for health coverage, car insurance, and renters/homeowners insurance

Identifying these bills as top priority and knowing how much of your paycheck they account for can help you budget better. It can help you answer the question “How much extra money should I have after bills?” and hopefully tweak your spending to make sure you can save.

Quick Money Tip:Typically, checking accounts don’t earn interest. However, some accounts will pay you a bit and help your money grow. Online banks are more likely than brick-and-mortar banks to offer you the best rates.

Which Bills Are Expenses That Can Potentially Be Canceled?

Cutting back on luxuries and treats can be painful, but there’s no feeling quite as rewarding as ending the month with your bills paid and a substantial deposit to your retirement account with money to spare. If you need to make room in your budget, consider canceling the following expenses:

•   Cable television or streaming subscriptions (you may have more of them than you realize)

•   Smartphone upgrades and high data plans

•   Gym or workout memberships

•   Amazon Prime and other shopping-related memberships

•   Digital cloud services

•   Overly expensive gifts for holidays and birthdays

•   Dining out and takeout

•   Cigarettes, vapes, and alcohol

•   Items that you can buy used instead of new, such as clothing, books, and more

Budgeting All Expenses

While ​​it’s critical to create financial goals and commit to eliminating unnecessary expenses, your budget is how you’ll accomplish the feat. A budget will act as a spending and saving plan to help you stay on track.

Reviewing the expenses you automatically fulfill through bill pay can help you understand how to construct your budget and make sure you aren’t overlooking any expenditures. Looking at upcoming expenses (whether that means new tires or a long weekend away) can also help you prepare better and not get thrown off track.

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Getting Another Job or Side Hustle

If you reduce your bills to a minimum but still experience financial challenges, a side hustle can help make ends meet. Whether you find a part-time job with an employer or work independently for a company like Uber or DoorDash, an extra 10 to 15 hours weekly can make a substantial difference in your budget. On the other hand, if your day job meets all your expenses, a second job can help you beef up your retirement account or pay for an expensive hobby.

Tracking Your Spending

Coffees and checkout impulse purchases at the grocery store can stealthily ding your budget. Luckily, there are more apps and tools than ever for tracking every expense. You can ditch pens, paper, and envelopes for a spending tracker on your phone or an Excel budget spreadsheet. Your bank might provide a free financial management app to help as well. Use these tools to help maximize how much money you should have leftover after bills.

Being Frugal for a Temporary Time

If you have lingering debts or want to save up a specific amount of money, being thrifty for several months can propel you into financial wellness. For example, you could make grocery shopping lists based on the coupons you clip each week. Or, if online shopping is your Achilles’ heel, you may want to unsubscribe from sales email lists for a while.

Some people enjoy monthly challenges. One month, you might say you are not going to spend any money on movies or music and put the savings towards your emergency fund. The next month, you might order takeout only twice and deposit the money you saved versus your usual habits into your travel fund.

Downsizing Your Possessions

Just as some monthly payments are unnecessary, you may have toys, gadgets, unused appliances, and more lying around that you don’t use regularly. You can pad your wallet by selling your stuff through Facebook Marketplace, eBay, or ThredUp. If selling online doesn’t appeal to you, a garage sale could be an option. These moves can help you have more money after bills.

Why Money Management Is Important

Life gets expensive, and making the most of your hard-earned dollars is crucial. Here are some principles to consider:

•   Failing to manage your money could cost you hundreds or thousands of dollars annually. Solid financial management can transform your spending habits, quality of life, and retirement income.

•   Also, money management will help you become more financially disciplined, which can be a key characteristic of successful people. The fortitude you build from sticking to a budget will increase your overall stability in life.

•   You’ll likely be better able to achieve your goals as well. For example, managing your money is vital for saving for your child’s education, affording a down payment for a house, or creating an emergency fund.

•   In addition, you’ll probably make more intelligent financial decisions when you actively manage your money. For example, you might have goals such as building an emergency fund and repaying debts. However, you might only have enough income for one of the two. You can analyze your finances to understand whether it’s wiser to save or pay off debt.

•   Lastly, you can reduce stress when your finances are under control. Constantly worrying about money can present mental and physical health challenges. Getting a grip on your money is an excellent way to improve your life circumstances and create a bright future for you and your family

The Takeaway

So, how much money should you have after paying bills?

Your financial situation will help determine the right amount of leftover money after bills. However, it’s an excellent idea to put a portion of your income into your retirement, savings, and investment accounts so your money can grow. In doing so, you can help build up an emergency fund and your future wealth.

If you’re struggling to find leftover money at the end of the month, managing your bills can help. By paying necessary expenses only and eliminating nonessential items from your budget, you can increase how much money you have after paying your bills. Picking up a side hustle is another option to help boost your income.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.


How do I avoid living paycheck to paycheck?

You can avoid living paycheck to paycheck by tracking your spending, following a budget, and stopping unnecessary expenses such as subscription services and eating out.

How do I get a second job when I do not have the time?

You might find a second job that fits into your off-hours, like walking dogs when you have free time on the weekend. You can also prevent a second job from being overly time-consuming by finding a gig that pays well enough to reduce how much you’ll have to work. Additionally, map out a schedule to help divide work from leisure and maintain a healthy work-life balance.

Is the 50/30/20 budget the only good rule of thumb?

The 50/30/20 budget rule is helpful, but other techniques can also organize your finances well. The 80/20 rule similarly helps you save 20 percent of your income. Others like the 70/20/10 budget. Additionally, your unique financial situation might require a custom budget to help you take control of your money.

Photo credit: iStock/RichVintage

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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