A Few Tweaks to Your Cash Flow Can Make a World of Difference
If you are living pay-check to pay-check then you know it is an incredibly stressful way to live. And chances are, some months you have to go into debt to manage your expenses. This debt can snowball and before you know it you are in over your head.
It will be pleasant surprise to know that a few tweaks to your cash flow can make a huge difference in your life.
- Make a Budget with Dates and Deadlines
If you do not have a budget, make one. Right now. Today. A budget will quickly show you where you are spending your money and where you might be able to save.
And instead of making a traditional budget, create one that lists when your income is received (when do you get paid) and when are your bills due. This simple step will help you see when you have money coming in and when it is going out.
- Change Payment Dates
Using the dates on your budget, you can begin to see when you often have money in your account and when you do not. This is important and it can help you save.
For example, imagine your salary comes at first day of the month and your bills are not due until the twentieth.
That leaves you twenty days to spend your money and by the time the twentieth rolls around you do not have enough to cover your bills.
Change your dates to better match your payment dates. If you get paid on the first, set your bills to be paid on the fifth. And if you can’t change your payment dates, pay the bill ahead of time or set the money aside in a separate account so you do not spend it.
- Cut out Luxuries Just for a Little While
If you are often over budget, cut out your luxuries for a few months. This accomplishes two things. It helps you see what luxuries are really worth your money and which ones are not. It also helps you get caught up with your debt. When you are back in the black, you can begin to add a few important luxuries back into your budget.
Finally, create an emergency fund. Do this before you pay down any debt. Your emergency fund may take months to create. Do it anyway. If you can save only ten dollars a week, that is absolutely fine, if that is all you can save under the circumstances.
The goal is to set aside a thousand dollars in a separate account. This account should not be too easy to access. It is for emergencies. Now, whenever you unintentionally exceed your budget you don’t have to panic or go into debt. You can borrow from your emergency fund to make up the difference.
Someone said: “Try to save something while your salary is small; it’s impossible to save after you begin to earn more.” : )