Most of the employees are no strangers to payday excitement. It is now time to pay some bills, top up the gas tank, replenish stocks, and maybe hire a research paper writer to complete your pending school work.
This trend results in dwindling finances during the month and subsequent hustle to cater to monthly expenses until another salary comes. Sadly, this is true for nearly four-fifths of the labor force, who live from hand to mouth.
It’s a dangerous way to live, especially in an unpredictable job market where a potential job loss could prove fatal to your financial future. Economic instability is on the horizon, and talks of a potential recession heating up, the need to break free from this cycle has never been more urgent.
Budget! Budget! Budget!
Starting your journey to financial freedom without a budget is like a cross-country marathon without a map. You’re driving yourself into oblivion. If you don’t have a budget yet, don’t worry!
Start by divulging all your income and monthly expenses, entailing all income from your main job and other revenue streams like side hustles. The main intent is to understand what you’re bringing in every month.
Afterward, identify your monthly bills and obligations: rent, water bill, internet, telephone bill, subscriptions, and more. Gain a deeper understanding of where most of your funds go and find areas to cut back on.
Needs vs. Wants
Is that Netflix subscription a must to pay for during these thick times, or can you do away with your morning cup of iced white mocha with caramel and salted cold foam? Your financial obligations include identifying needs and wants in your monthly expenditure.
Needs represent priorities that need to be covered before anything else. It ranks food, utilities, shelter, and transport in order of priority. Other wants can become needs depending on your situation. For example, a remote worker writing a researchpaperwriter review needs a monthly subscription to services like Grammarly.
After caring for these needs, it’s time to settle some wants, depending on their importance in your daily life. For example, dining out, movie tickets, concerts, gym memberships, or streaming services fall under this umbrella. Prioritize options that make your life easier without straining your budget.
Avoid Debt
Raking up thousands of student loans, car payments, and credit card debt only sinks you deep into an endless vicious cycle of debt. Also, these debts accrue high interest rates and dent your credit score.
Fortunately, there’s a way out. Use your budget to calculate how much you can afford to repay your debt. Put in little savings monthly to cater for these loans based on the order of priority, interest rate accrued, and due dates.
In practice, it might mean sacrificing dining out on the weekend or attending your favorite artist’s concert – you can take the intended money to knock off your debt.
Track Expenses
The concept of putting together a budget is detailed and uncovers each corner of your personal financial plan. It allows you to create a snapshot of your expenses. This analyzes your monthly spending and checks what you spent from the credit card statements along with receipts.
Or perhaps you missed the beautiful new pair of open-toed Birkenstocks that were among your Black Friday hauls at the mall without trying them on?
We recommend connecting all your accounts through a budgeting app. This automatically pulls in all your transactions for evaluation during your monthly review. Break each expenditure into categories and ensure all expenses are tagged correctly to get an accurate picture of your finances.
Live Per Your Means
Make it a philosophy to live according to what your budget allows you to. If your salary isn’t enough to allow for a vacation in the Bahamas, then live like it. Don’t feed into social media pressures of living large on a small budget. It only ends with maxed-out credit cards and debt schemes to maintain an unstable lifestyle.
If retail therapy is your Achilles heel, adopt healthier alternatives to keep your mind busy, such as exercising, painting, or exploring nature. Understand triggers to your spending monster and learn to control it.
It doesn’t mean giving up your pleasures but practicing gratitude for your available things and focusing on the intangible things in life that make you happy.
Find Alternative Income Options
If the retail therapy gets out of hand, it’s time to meditate on the problem. Instead of suppressing your need to buy new things, why not find another revenue stream that caters to your compulsive spending?
Owning multiple income streams allows you to diversify cash flow sources. In the event one source dries up, there are other sources to cushion the blow. Moreover, these other streams can tend to your worldly pleasures.
Some top ideas are becoming a tutor, coaching, freelancing, dog walking, podcasting, babysitting, and food delivery.
Emergency Fund
What happens when your car gets damaged on the road, or unemployment, medical treatment, or a family emergency occurs? How will you sort these unplanned bills or payments that are not part of your monthly expense routine?
An emergency fund is a crucial tool to add to your financial arsenal. The essence of this fund is that it allows users to pay for life’s necessities without racking up a balance on their credit card or taking a short-term loan.
Some expenses this fund can sort out include home repairs, job loss, medical or dental bills, or debt repayment.
Get Professional Advice
If you’re struggling to cope with all these expenses, it’s time to call in an expert. Multiple financial advisors offer budgeting services. Also, there are experts in different parts of your budgeting process.
For example, you can get help understanding and organizing your comprehensive financial picture. Other services include investment advising that suits your style, goals, and risk tolerance. Also, they can provide strategies to create budgets that align with your short-term and long-term goals.
Key Takeaway
Finding yourself broke after payday is a common occurrence we think of. It’s a representation of poor planning and budgeting on your part. Luckily, advocating for a financial advisor to cater to these services can make a great difference in achieving your financial freedom.
