The end of month budget struggle is REAL and can be avoided!
Posted in: LIFE AND HOME
Cars break down, appliances catch on fire, and cell phone upgrades are expensive. What's more expensive is paying for these everyday events without and emergency fund. One-way to avoid racking up debt is to start an emergency fund.
So how do you start? It takes time, dedication, and a strict plan, but yes you can do it! Just a few steps and you can be on your way to a rainy day fund, vacation fund and retirement plan.
Take a hard look at your current financial situation.
Measure your debt, look at your expenses, and take into account recurring expenses. You don't need to be a financial expert to do any of this. All you need is 1 notebook, 1 pen and a budgeting app that comes highly recommended. Mint is an excellent budgeting app that helps you to see your full financial picture. You can input all of your bank accounts, loans, and other investments in one place. It tracks your spending and it even gives you a chart of where your money is going. When you are planning for an emergency fund you need to know where you are over spending, where you can reduce, and most importantly where all of your money is going. Once you have seen a full financial picture you are ready for the next step.
Reduce, Reuse, and Reduce again.
Now that you have taken the time to go over your financial picture it's time to make cuts. Over spending on brunch is out of the question now. The round you bought for the group the night before, you are going to have to ask for the, to chip in. Cutting back on the non-necessities is as easy as just saying no. No to more drinks, no to the new shoes, and yes to £40 of extra savings a week from not eating out for lunch everyday. Once you have reduced. See what you can reuse. Can you send old clothes to consignment for money? Can you repurpose some of those old jam jars? See where you can stretch and reuse to eliminate costs. Lastly, try and reduce one more time. Are you still spending too much on your fitness membership? Is there a more inexpensive grocery store you could be using? It may be difficult but one more reduction in your budget can make a world of difference.
Save, save, and save some more.
Once you have made these changes this step will be relatively easy. The money that you would have spent on the "extras" you now can neatly tuck away in your savings. £30 here and £10 there will start to accumulate quickly, and you won't even notice it. Soon you will be saving an extra £100+ per month and that can do wonders in an emergency situation. This is help stop accumulating debt and over time you can stretch these funds far beyond to something even more fun down the road!
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