How to Balance Your Budget Before the Next Pay Check

Having a clear monthly budget is the first step towards regaining control over your personal finance. By allocating portions of your income to certain needs, you can be more meticulous in managing your expenses and keeping your monthly spending in check. It is also easier to keep track of your progress when you have a predetermined budget, especially now that there are plenty of apps to help you.

Even with the best plan in hand, however, things can still fall apart. You may be faced with an unexpected expense or an emergency that leaves a big gap in your budget. More often than not, this happens well before your next pay check, making it more difficult to maintain a healthy cash flow.

When not dealt with properly, a gap in your monthly budget can quickly turn into a vicious circle. You’ll start falling behind on your credit card payments or other bills. Those late payments will result in additional fees, which will leave an even bigger gap in your monthly budget. So, what can you do to stop a simple emergency from turning into a bigger problem?

Work on Your Expenses

As soon as you know that there is an unexpected bill that needs to be paid, do a quick review of your expenses. This is the time when you need to be ruthless when it comes to cutting unnecessary expenses. Forget about getting a cup of coffee on your way to work and make one yourself at home. Cancel unnecessary subscriptions and delay getting a new phone until you are back on track.

No amount is too small to save; like I said, now is the time to be ruthless and cut unnecessary expenses immediately. You can always find ways to save money and cover a portion of that emergency expense and ease the blow a little bit.

In most cases (usually when the emergency expense is sizeable) you may need to avoid some expenses for several month. There is nothing wrong with that. Make the necessary adjustments and budget for the following month differently. You will return to a healthy cash flow sooner than you think and you can start spending money on non-essential things again.

Check Your Savings

Withdrawing money from your savings account or your emergency fund is the second step to take, and it is in no. 2 for a good reason. Even when you can cover the unexpected expense immediately with the money you have saved, you still need to get your savings or emergency fund back to its ideal level, which is why you still want to save more and make adjustment to your monthly budget as needed.

Covering the emergency expense is the easy part when you already have an emergency fund or savings set aside all these months. You can also keep up with other bills until the next pay check without running into issues either.

Know Your Options

What if you don’t have the money to deal with the emergency expense? If this is the case, it is time to review your options. If the emergency expense is not something you can delay, then that expense is priority. You now have different financing options to turn to in this situation.

Don’t just apply for any loan. You still want to be smart with the decision you make even when you are in a rush. Take some time to compare loans and other quick financing options so that you can use one that costs the least. Don’t worry, you have the internet on your side.

Using comparison tools and web apps, it is easy to get quotes from multiple lenders with just one search. You can also visit the websites of lenders directly in order to get quotes, all while reviewing the available financing options. After finding the right loan to use, do a quick calculation on repaying the loan based on the changes you made to the monthly budget earlier.

The actual task of applying for the loan (and getting the money you need) can be completed in minutes. Some lenders will review your personal information and decide whether to grant you the financing within a couple of hours, and you can get the money deposited into your account soon after the loan is approved.

Sticking with the Plan

The biggest challenge of them all is sticking to the plan you have created so far. You now have an extra loan to repay, so it is important that you stick with the adjusted monthly budget and continue saving money on non-essential expenses. The more you can save, the sooner you can return to your old budget.

Dealing with financial emergencies is always a hurdle, but these tips will help you face the situation better. By knowing exactly what to do, you can continue making sound financial decisions and maintain control over your personal finance.

Smart Ways to Save Money on Your Regular Expenses

There are basically two things you can do to regain control over your personal finance: you can either increase your income or reduce your expenses. When you are dealing with a series of bad debts and struggling to make ends meet, it is necessary to make these changes in order to balance your monthly budget and take back control gradually.

Controlling your expenses is usually the easier of the two. You can review your current expenses and start making cuts to expenses that aren’t absolutely necessary. You can take further steps to reduce the expenses you cannot afford to cut as well. The tips and tricks we are about to discuss in this article will help you save on the regular expenses you cannot completely eliminate.

Be Smart with Your Energy Bills

Your energy bills can be reduced through some simple changes. You can start by gradually switching to LED bulbs to reduce the electricity you consume. Remember that no amount is too small to save and the amount you save with each LED bulb you install makes the investment well worth making.

LED bulbs are not the only way you can save too. You can also be more frugal with your appliances. Rather than leaving them on standby, unplug the devices you don’t use. Even when they are not in use, electronic devices still consume a small amount of electricity. Those small consumptions add up; you’ll be surprised by how much you can save every month with this tip alone.

Other small changes are just as valuable. You can, for example, lower the target temperature of your water heater. Adjusting your thermostat by one or two degrees also help lower the cost of heating (or cooling) your house by a substantial margin. The more of these small changes you make, the bigger the impact will be at the end of each month.

Reorganize Your Loans

Debt repayments can be difficult to manage when you have more than you can afford to pay. Your debts come with costs and failure to meet the payment deadlines means more costs to cope with. This is a vicious cycle that needs to be broken.

You can ask your lenders to freeze your loans and turn them into fixed monthly payments; you may even negotiate for interest waiver if you can show that you are in a bad shape financially. That said, not all lenders will agree to the terms you have in mind.

Another alternative is consolidating high-cost loans into one debt that can be managed easily. You are not only making your debts easier to deal with, but also saving a lot on interest and other fees. On top of that, you can work towards finding a consolidation loan you can afford.

Other options are worth considering too. Individual Voluntary Arrangement or IVA, for instance, can help you repay most – if not all – of your loans without hurting your personal finance more. However, these options come with additional consequences, so make sure you use them only as the last resort.

Eliminate Unused Subscriptions

Are you subscribed to both Hulu and Netflix? Do you really need that Amazon Prime subscription? Subscription services are great because they offer a more cost-efficient way of getting the services you need. Rather than paying for shipping, you can actually save with a well-used Amazon Prime account.

The subscriptions that you don’t use are the ones you need to start managing. £2 here and £3 there still add up to a substantial amount at the end of the month; remember, no amount is too small to make. Rather than paying for the services you don’t need, eliminate the unused subscriptions and save the money instead.

This tip applies to your cable TV, the newspaper you seldom read, and other services that come with a monthly charge. In some cases, you may not realize that you are paying for extras that you don’t even use, hence the need for a complete review of all the subscriptions you pay for.

Don’t Forget Your Insurance

The one thing you don’t want to eliminate is insurance. The insurance coverage you have actually protect you from additional financial risks. That doesn’t mean you cannot take active steps towards saving on your insurance premiums.

Bundling several insurance policies and getting multiple coverage types from the same insurance company are some of the ways you can save on your insurance bills. You can also compare insurance deals and even ask for a better quote the next time you need to renew a policy. Make sure you are getting the best coverage for your money and saving the maximum amount.

The more of these small savings you make, the more money you can allocate towards repaying your debts, and the sooner you can improve your personal financial state. It will not be long before you start saving money, investing more, earning additional income, and regaining control over your personal finance.