Living paycheck-to-paycheck can be a real drag. All it takes is one emergency to precipitate a personal finance catastrophe, and when you’re counting on every penny to be there it can be a disaster when you’ve got to miss a couple of days of work because you’ve got to deal with an unforeseen situation.
1. Make it a Habit to Plan for the Future
The best way to counteract such an issue is to plan for the future. This is easier said than done, but there are a number of things you can do to build up a financial cushion to get you through future uncertainty — and, for the most part, they’re things you can do on a monthly basis. Here are six things you can do to bank more cash for the future every month.
2. Revise, and Review, Your Regular Bills
It’s no coincidence that most of the bills we have to pay come in once a month. Whether it’s rent, utilities, payments on personal loans, or even just the credit card bill, these monthly payments come in regularly enough that you can examine and compare them every month.
Did your electricity bill go up? Time to start turning off lights when you leave a room. Is your cable bill through the roof? Look into switching providers. This will free up more cash going forward, giving you more resources going into next month.
3. Tighten the Belt on Needless Spending Habits
Nobody likes having to cut back on their spending, but let’s face it: you’ll have more money left over by the end of the month if you don’t spend as much as you usually do. You can’t skimp on necessities, but you can cut back on needless spending.
The occasional splurge is fine and even does much to keep your sanity but making it a habit can destroy your budget. Rent a movie instead of going to the theater. Make coffee at home instead of hitting the Starbucks on your way to work. Shop at thrift stores for clothes instead of paying full retail price. Every penny counts!
4. Increase Your Take-Home Pay
Of course, another way to have more money left over at the end of the month is to bring home more money in the first place. Working hard to land a new position at work, one that comes with a pay bump, can help take some pressure off that monthly grind.
Likewise, picking up a second part-time job, or any other type of side hustle, can also give you the financial boost you need to start saving a little extra cash every month to go into that rainy-day fund.
5. Put Aside Whatever You Can For the Future
Speaking of rainy day funds, if you don’t have one yet it’s time to establish one. If you’ve got any cash left over before payday, consider depositing some of it into a bank account that you can add to, little by little, whenever you have the resources to spare.
This might not be much at all at first, but if you follow the tips we’ve got here the amount you can contribute will grow over time. If you do this consistently every month, you can build up a very strong safety net for an emergency in the future.
6. Pay Down Your Debt Where You Can
There’s nothing more crippling in the long-term than bad credit. If you’re making monthly minimum payments on personal loans or other types of debt you might feel like you’re saving money in the short term, but this stretches how long it’s going to take to pay off the debt in total.
In fact, most of those payments will be applied to your interest, not the principal on the loan. So if you want to have less debt next month than you do today, strive to pay even just a little more than that minimum. You’ll have more money at your disposal in the long term as a result.
7. Be As Consistent As Possible
Finally, it’s important to realize that building a personal finance cushion for yourself requires consistent action. No, it won’t totally derail your plans if you have a bad month and have to dip into what little savings you’ve amassed so far, but don’t feel defeated by this! Go back to your saving whenever you can, however you can, and you’ll see that cushion build back up.
Consistency in your month-to-month savings adds up over time, removing the sting of living paycheck-to-paycheck. Not only that, but the peace of mind you’ll gain from knowing you’ve got more money this month than the last, and that you’re prepared for any financial emergency that comes your way, is even more worth it.