Wouldn’t it be nice to have a month’s worth of bill payments tucked neatly aside? It certainly would.
But how does one get started? Is it even possible? Living paycheck to paycheck has worked thus far, it isn’t ideal and you know there are better ways to take control of your financial situation. But how?
Creating a budget that allows you to save enough money to put aside for next month’s bills is a great way to jump start taking control of your financial future.
It will take a lot of stress and anxiety off your shoulders and allows you to become a little more organized with your money, which has huge and positive implications for your (and your family’s) future.
Below I have listed 7 steps to get you started.
1. Determine What to Save
In order to start saving enough money to get one month ahead in your bills, you will have to figure out how much money you need to put aside.
So, take out your bank statements and write down all of your fixed expenses for the month, like rent, utilities, car insurance, cell phone bill etc.
Also make a list of your variable expenses that are still necessary each month, like groceries, gas, toiletries etc.
Add them all up and this is the amount you need to save in order to get a month ahead.
I need to stress an important point before we continue and that is your expenses should not be greater than your income, ever.
Otherwise, you will increase the amount of debt you already own and will never be able to build a solid financial foundation that will give you security and a back up when you need it.
2. Cut Expenses
So, let’s focus on cutting expenses.
You have added up all of your monthly expenses and decided that (a) there is room to save money and (b) you don’t need all the services you are paying for.
Good for you!
Cancel those audio book subscriptions you haven’t used in the last 5 months. Carpool with your colleague and neighbor to work. Make your coffee at home and bring it with you in a travel mug (you have no idea how much money it’ll save you without even trying that hard).
Stop shopping for books on your lunch (I know, I love bookshops, too, but it’s a real money grab) and instead use your local library. Most libraries nowadays have a well-designed website database that lets you browse their catalog and put books on hold to pick up later.
And cut your cable TV. I have been mentioning this point in many articles I have written and I will continue to do so. Cable TV has become obsolete. It doesn’t give you control over what you can watch and puts you on a schedule.
Instead sign up for online streaming services like Amazon Prime, Netflix, Brit Box etc. this will cut your bill from $100 or more to a more manageable amount of $20.
3. Save The Extra Money
Do you love those extra paychecks you get as much as me? Excellent.
Once in a while a month will yield that great third paycheck that is oh so welcomed.
And what about those tax return cheques, bonuses you get from work, maybe even a raise! Sometimes the money gods just really smile down on us, so let’s be smart about this extra money.
Put it aside, save it and it’ll automatically turn into that emergency fund or the amount you need to get ahead in your bill that one month.
There are times it is just that easy.
4. Focus on Debt Payments
And then there are times when things aren’t that easy.
If you have debt to pay off, it is wise to do so first. It won’t make much sense having an amount of money saved up to get ahead in your bill payments when your debt repayments aren’t part of your financial plan.
That debt will keep collecting interest fees and that will make it impossible to ever get away from it.
Instead make debt part of your monthly payments. Make it your plan and goal to pay off that debt.
This may not happen in a few months, wouldn’t that be nice? But taking control of your debt situation will make it easier to work towards a stable financial future.
5. Make a Budget
This brings me to another very important step to take when you want to get ahead in your bill payments: you need a budget.
A budget that is written down in black on white on a sheet of paper that is always at your disposal.
Or maybe you prefer the digital version of a spreadsheet.
Whichever version you decide on using, use it. Make yourself accountable for your goals and plans and that budget that will give you control of your finances.
And, of course, make debt payments part of your budget. Also, take the opportunity while making a budget to decide where and how you can cut unnecessary expenses.
6. Side Hustle
Whatever you do, sometimes it just isn’t enough. Your basic living expenses are still higher than your income. It happens, unfortunately.
Now it’s time to get creative and think outside the box for money-making opportunities.
Maybe you have a skill set you can turn into a second job such as graphic design, proofreading, writing articles for websites. Maybe you just really like working in gardens and decide to offer your services to keep up your elderly neighbors yards for a reasonable price (the fresh air is certainly a plus when you work in an office all week).
The possibilities are endless.
7. Smart Shopping
I used to love going shopping. I used to love going to the mall. But the older I get the more I dislike it. I started going really early in the day to avoid the crowds of people and make it home in time for lunch, because I can’t stand the thought of having to pay for my lunch.
I know I sound like a grumpy old lady, but I assure you I’m not, my priorities just shifted.
So, if you are like me (not grumpy, just focused) and would rather avoid the mall, but still need to get your shopping done, try online shopping with the use of a cashback app such as Rakuten.
You can sign up for free, then use the search function to find the online store you want to shop from, click on the link and make your purchases like you normally would.
Rakuten will give you a percentage of the total amount you spent on that online site, which is then mailed to you via a cheque every three months.
It is as easy as that and easier. You save money on gas or bus fare, probably save money on lunch or coffee you would have been reluctant to buy and you can shop any time. Just make sure your adblock function is paused when using Rakuten.
Living paycheck to paycheck can be stressful and the thought of having the money in your account to pay those bills as soon as they come in can be a gloriously freeing feeling.
Finding a way to make it happen can be challenging and overwhelming, but with the steps I have outlined above getting a start on behind ahead a month in your payments will become a lot easier.
Taking control of your finances is no longer just a dream you have, but can very soon be a reality that can give you the peace of mind and independence in your financial matters.
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