Balancing your finances is not easy. It is often said that you should be able to cover your expenses with your income and still have 10% left over to put into some form of savings account. Unfortunately, for some people this simply isn’t possible.
If you are one of the people struggling to make ends meet, there are a couple of things you can do.
The first thing you should look at doing is increasing your income. There are a number of ways in which you can do this. Ways in which you can increase your income include:
- Asking for a pay rise – this is the first thing you could do to increase your income and it’s something that many people overlook. Whilst I’m not suggesting meeting with your boss and demanding a pay rise, if you take some time to consider how you could justify a pay rise and present this to your manager at your annual appraisal then your manager may be willing to negotiate. You should mention your achievements and talk about any extra responsibilities that you have taken on. A couple of points to consider here is the timing and tone of your request. Be sensitive to your managers workload and pick a time when your request for a pay rise will not be seen as an unwelcome distraction. When it comes to the tone of your message, you should avoid pleading with your manager or being aggressive and you certainly shouldn’t issue any pay rise ultimatums.
- Requesting overtime – Some job roles may not allow or be suited to working overtime, others will allow employees to request extra hours that will lead to extra income. This can be a good way of increasing income as you are already familiar with the job and your overtime hourly rate may be more than your standard rate of pay. One thing to note when it comes to overtime is to not become too dependent on it as overtime may not always be available, especially if your job has peak and non-peak seasons.
- Getting a second job – if your current job leaves you with time to work a second job then its worth considering as this is a good way of increasing your income. There are plenty of jobs in bars, restaurants and supermarkets that are suited to people looking for work in the evenings or at weekends.
- Getting a new job – if a pay rise or overtime is out of the question, it may be worth looking at other jobs outside of the company you currently work for. You can check for vacancies in newspapers and online. It’s often said that’s it easier to look for a job when are already employed than it is when you are unemployed and this is certainly the case. You can be more selective than you might be if you were unemployed and there isn’t the same pressure to find a job as there is when you are not working. A couple of points to consider are that it’s better to keep it quiet at your workplace if you are looking at other job opportunities and it isn’t guaranteed that you will be happier in another job so you should carefully consider everything before leaving your current employers to work elsewhere.
- Selling items that you don’t use – most people have items at home that they don’t use that are taking up space. If this is the case, you should look to turn these items into cash by selling them on sites such as eBay. Just because you don’t have a use for these items doesn’t mean that someone else won’t and you might be surprised at how much someone is willing to pay for an item that you never use. Not only will selling your unused items bring in extra cash, it will also de-clutter your house and create space for other items that you do want to keep.
Having looked at ways in which you can increase your income, you now need to look at ways in which you can reduce your expenditure. Most people, no matter how careful they are with their finances, could bring down the amount they spend each month. Reducing your expenditure doesn’t necessarily mean giving up all luxury items, you just need to plan for these expenses so that they have as little impact on your outgoings as possible. Ways in which you can reduce your outgoings include:
- Saving on groceries – one of the biggest expenses people face is for the groceries they purchase week after week all year round. It is possible to reduce the amount you spend each week on groceries by following a few easy tips. The first is to prepare a list before you visit the grocery store. The main benefit of this is that it helps you avoid buying things that you don’t need. Creating a list will also ensure that you don’t forget anything that you need to buy. Another thing you should do is avoid grocery shopping on an empty stomach. It sounds silly but you are much more likely to be tempted by special offers and discounts on food when you are hungry! You can also save a significant amount by using coupons and this coupon tutorial can help you on your way! A final point to consider is purchasing own brand rather than ‘known’ brand products. On many occasions there is very little difference in taste between the two but the own brand products are significantly cheaper than the ‘known’ brand equivalents.
- Saving on monthly outgoings and financial services – monthly outgoings such as gas and electricity bills, insurance, loan payments and mobile phone contracts can also account for a significant amount of your income. Whilst these costs are mostly unavoidable, it is possible to bring these costs down by ensuring you shop around for the best deal. Costs can vary significantly from one provider to the next so it’s important that you retrieve quotes from as many suppliers as possible. A good way of doing this it through the use of price comparison sites. These sites allow you to fill in one form and then retrieve quotes from most if not all of the major providers. You can compare the major insurance companies here.
- Transportation – purchasing a used car and keeping it for a long period of time is a good way of reducing your lifetime transportation outgoings. As well as doing this, there are certain habits that can help you save money. The first is walking or cycling short journeys instead of using your vehicle. This will help you cut back on the amount of fuel you use and will also help you stay fit and healthy. If you do keep up this habit, it is likely that you will reduce the number of miles you drive in your vehicle each year which can in turn reduce the cost of your auto insurance. Driving steadily and avoiding sudden acceleration and braking is another good way of reducing the amount of fuel you use. The more sensibly you drive, the better your fuel consumption will be. A couple of other tips that can help you save money on your transportation are avoiding carrying excess weight in your vehicle and ensuring that your tires are pumped up to their recommended pressure.
- Shopping – whenever you are shopping and considering buying an item, it’s important that you think about whether or not the purchase is necessary. On many occasions, after careful thought you will decide that the purchase isn’t actually needed and that you would be better saving your money. When you do decide that a purchase is necessary, you shouldn’t always pay the first price you see. Shopping online is a good way of saving money as you are able to avoid travel and parking costs and many online retailers are now offering free delivery on their goods. A final point to consider is that many people buy things, decide they are unsuitable or don’t fit properly and then never return that item. If this is something you do then you are basically throwing money away. Whatever the reason, if you decide that an item isn’t suitable you should return it to the shop as soon as possible to ensure you get a refund.
- Hobbies and holidays – cutting back on expenses need not mean giving up on hobbies and holidays but it is possible to make significant savings with a bit of careful consideration. When it comes to hobbies, it’s worth looking at ways of reducing the costs of these hobbies without having to give up the things you enjoy most. If you are a member of a gym, why not consider canceling your membership and take advantage of the great outdoors instead. It’s possible to keep fit and healthy without the use of the expensive exercise machines in the gym. Jogging and cycling are both free and there are a number of exercises that you can do without the use of a machine to work all muscle groups. When it comes to vacations, there are a number of things to consider. Whether it’s short breaks or all-inclusive holidays you are looking at, there are things to bear in mind both before and during your trip. The first tip is to book accommodation that is 5/10 minutes away from the main tourist area. Doing so can mean significantly cheaper accommodation and if you book somewhere that has a good public transport network you will be able to get into the main tourist area with very little hassle. A second way to save money is to avoid expensive restaurants aimed at tourists. Instead, ask locals where they recommend. It’s likely that they will be able to recommend restaurants that are popular with locals which will offer tasty local cuisine at a lower price than those restaurants targeting tourists.
By increasing your income and reducing your expenses you will no doubt be in a stronger financial position than you were. Ideally this will help your finances so that you can now save even more than the suggested 10% of your income each month. If you are still struggling to cover your expenses after spending time examining your finances then it’s important that you look to address this issue as soon as possible. It may be that you are not living within your means and you need to reduce your spending to a level that reflects how much you are earning. If you still don’t think you can cut back on your spending or increase your income then it may be worth seeking professional advice as continually spending more than you are earning will more than likely lead to debt issues.