Year 2020, the year that was! Year 2020 had made us witnessed massive layoffs, furloughs, skeletal work scheduling, pay cuts, and all other dreaded labor issues. For any employed individual, he/she must be prepared for these adversities as no business, big or small, cannot guarantee continuous employment especially in times of global crisis.
Looking it at, another perspective of this financial struggle is when you find yourself almost too often running out of cash way before your next paycheck would come. Or, you are always glued staring at the calendar and counting the days when would be the next paycheck arrive. You hardly make both ends meet, as the saying goes!
Living paycheck to paycheck is definitely not a welcome thought in handling your personal finances. You need to stop the cycle once and for all. Let me show you some ways to do it!
Work on a Budget. Nothing beats planning. Plan out your expenses against your earnings. You may consider classifying your expenses as those recurring and essentials, and those that are not. In this way, it enables you to prioritize and program on where does your earnings go.
Your goal in this budgeting process is that there should be a certain percentage of your income that you should set aside as savings. The amount saved would serve as buffer cash for a certain period of time. Only you could determine how much and how long to maintain your savings.
Focus on the Essentials. Our basic needs for survival are your essentials and this includes food, house, transportation, utilities, and medicines. Effective budgeting would mean that these essentials are properly allocated. If all things fail, these essentials should always remain the priorities in terms of spending.
Do Not Rely on Debt. Borrowing money for your essentials or just any of your expenses is courting financial disaster. Though hard as it may seem to most individuals, debts and credit cards had become scapegoats and a standby relief. Though, on a positive note, availing of credit is a relief at times when you need it most.
But, bear in mind that borrowing money should never be viewed as a permanent go-to way of paying your bills and other expenses. Debt servicing or paying interest for debt would gobble up your paycheck over time.
Hunt for Sources of Side Income. If you are trapped in the cycle of living paycheck to paycheck, you may consider looking for other sources of income. When, after thorough budgeting, you cannot trim down your expenses, then, it’s time to boost up the income side. Hustling for a side job is the wise move.
Assess your skills and capabilities, your interests, and how much extra time you have for a side job. Work-from-home and remote jobs have become a byword in this time of pandemic and take it to your advantage.
To sum it all, live below your means. It doesn’t make sense how much money you make if you’re spending it all. What matters most is sticking to your budget no matter how big the bump in your pay. Let that bump stay in your wallet and watch it grow. In the end, you will experience a sense of fulfillment in managing your personal finances.