In these tough economic times that we live in, it is important to be as savvy as possible with your money and your financial behaviour to ensure that you don’t end up in debt or struggling to make ends meet. Most people find that by the end of the money there is still plenty of month left to go, but that isn’t the case for everyone. And the reality is that making it to the end of the month with cash in reserve is less about how much you earn and more about what you do with the money that you earn. Here are some tips to help with the process.
Consolidate your debt
If you owe money on lots of credit cards or to lots of stores, try to consolidate these into one single debt. There are plenty of outfits that offer fast personal loans and it is well worth enquiring about these. Unless you have a terrible credit record you should qualify to receive a cash injection with a structured repayment plan. You then need to take the cash to pay off all your debts allowing you to move forward with one manageable payment a month.
It might sound like a very obvious thing to say, but it is surprising how many people don’t actually do this. Budgeting is very importantand it is a critical factor in making sure that you make it to the end of each month in the black. Making a budget means that you are thinking about what you are spending on and being conscious of the allocation. Obviously it is imperative that you don’t just compile the budget, but that you stick to it as well – or at the very least that you keep the budget in mind when you purchase.
As soon as you are paid and your budget is made, ensure that you do the transfers and payments that are absolutely critical. We are talking about things like debt repayments, insurance, utilities and savings. Whatever is left is your disposable income and it is that money that needs to be made to last for the remainder of the month. Critically now you need to work out what is left and what that allows you to spend on a daily basis. But be smart about this, don’t just take the available disposable income and divide it by the number of days in the month. Keep a little bit aside for use at the end of the month, in recognition of the fact that there is a tendency to spend more than allowed along the way.
Be aware of big ticket items
You always need to have a contingency plan in place to cover off unforeseen expenses or inevitable big ticket items. There are a lot of things that you cannot get away from and that you need to plan for. We are talking about things like new tyres for your car, a holiday, replacing a major appliance or just shopping for Christmas gifts for your family. If you save a little each month towards these costs, you will be covered when the time to spend rolls around and you won’t have to make a solution out of your monthly income alone.