What would be the best way to pay your bills each month? We have read a lot about budgeting tips and we even have already practiced those. They are just as simple and straightforward as money-saving tips. One thing that poses a challenge though is to live on what you have earned last month.
The idea is that this month’s spending depends on your last month’s earnings. How do you go about this? Firstly, assign every dollar you earned to each expense category. In this way, no waste and every cent are accounted for. Then, take extra care of all ‘extra’ money you can get.
The extra money you could get from your quarterly bonus, tax refund, sale proceeds on your personal properties if any. Just simply stick to your monthly budget and the extra money you get is all you need to get a month ahead.
Secondly, make an effort to save while doing your purchases. You would normally purchase anyway, so why not save money while doing it. A lot of retail businesses now offer cashback options. Grocery shopping nowadays offers savings on bulk purchases.
Thirdly, consider having an emergency fund. This serves as a safety net for those unexpected and unwanted expenses that may pop up at any time for you. This gives you a buffer that prevents you from going into debt when unplanned expenses come up. Having a one-month buffer could essentially get you a month ahead on your bills.
Fourth, cut down on your low-value expenses. Do some lifestyle adjustments to avoid those costly spending habits like impulsive shopping, dining out, and credit card purchases. Consider canceling gym memberships and subscription services. Add up all these low-value expenses and they get a big chunk from your budget. Better cut down.
Fifth, hustle for side jobs to earn extra. If you are on a tight budget and have no wiggle space, try to look for ways to get extra money. Babysitting, selling stuff you don’t need, or a freelance job to let you earn that much-needed funds. It all depends on how much free time you have, the effort you are willing to put in, and your field of expertise.
Sixth, set goals for your money. Those saving goals drive you more to work hard, earn more, and save more. Save for your retirement, a down payment for a new house, or an investment for your schooling. Just set your priorities, know your purpose, and you would have the drive to save for the rainy days.
And, to top it all, you are definitely on the brighter side of your financial planning when you practice all those strategies. You would enjoy a stress-free life with no worries about making both ends meet. Spending less than you earn is the guiding principle. And similarly, this goes to say that you are a month ahead on your bills and other expenses. You are actively ‘living within your means.’ It gives you a lot of peace of mind. Get rid of your old financial habits to embrace change.