Even when the economy isn't unstable, there will always be people who don't have a steady income and find themselves living from paycheck to paycheck. This is also a problem if you're unemployed or have to take a break from your job for health or personal reasons.
Fortunately, it's possible to rise above the desperation and make a solid plan for your expenses and your needs even when you're reliant on getting that next paycheck. Even when unexpected things happen, like an emergency dental procedure or weather damage to your house, you can find a way to keep your accounts balanced and your mind at ease.
Consider applying these 5 tips to your immediate future:
1. Set up an emergency fund: Let's say that, with each paycheck, you start putting away a small amount each month. This money you're putting aside can go into creating an emergency fund for when you can't find work or you have a major expense to pay, like a missed mortgage payment or a utilities bill. Making this a habit will also teach you to be wiser with your money and give you a sense of financial security.
2. Cut back unnecessary expenses: When you look over everything you spend money on, ask yourself, "Do I really need this?" This can include cutting anything from an unused gym membership to fast food purchases to impulse buys at the electronics store.
3. Resist the temptation of credit cards: If you have one or two credit cards in your wallet, it's far too easy to keep buying things you don't need and putting yourself deeper into debt. If you have absolutely have to carry a credit card, keep only one in your wallet to use for emergencies or major essential purchases.
4. Prioritize your bills: Having a home is far more important than keeping up payments on your third credit card. Your payment priority should be focused on major bills like mortgages and utilities, with less important expenses left waiting or cut out entirely.
5. Learn new basic skills: So much of the money that we spend usually goes toward paying other people for their services, like auto repair or food preparation. If you're willing to take some initiative, you can learn to do some of these things on your own. This can involve simple activities like basic auto maintenance (e.g., changing the oil, fixing your brakes), cooking meals at home, and sewing up old clothes instead of buying new ones.
Image by Sylvia Giacinta on Flickr