Savings with low income or irregular monthly paycheque is not an easy task, especially during this pandemic where uncertainty in our jobs, lives, and incomes are there. It all makes us realize us think about that. Covid-19 has impacted almost everyone in one way or the other. In the U.S, more than one-third of the consumers who lost their income were getting financial support from their government in May 2020.
On average, 36% of those working in a country prior to COVID19 stopped working during April-July, and 62% of households reported a reduction in total income, according to the report.
In such a situation, when you have to pay the mortgage or credit card bills, then seeking help from the government may push you into trouble at the last moment or due date. Therefore, instant loan options are available in the market. Numerous apps like MoneyLion are there where you can get the money from 100 dollar loan to millions based on your eligibility & requirement.
Herein we’ve compiled the top budgeting tips no matter in which criteria you may have fallen.
Let’s get a kick start with tip #1.
1. Know your in & out
Calculating your monthly income is equally important as your monthly expenses. Use the 50/30/20 formula, Where 50% of your income will be a part of your essentials, 30% will be your daily needs & balance 20% you can keep in your savings. Make a list of your essential & daily needs.
- Electricity bill
- Mobile phone bill
- Commute cost
- Eatery items
While listing your essential and daily needs, you need to identify the fixed & variable items. For example, rent & debt are considered as fixed expenses, on the other hand, bills, commute costs, and eatery can be managed. This way helps you to understand to use In (Total Income) – Out (Total Expenses) = saving amount.
2. Contingency savings
Bifurcate your savings for good and bad times. Once you head up compromising with your daily expenses, shocking & unplanned expenses may wash your savings. Few portions from your 20% saving save for emergencies. Fixed debts should be clear on time to avoid paying penalty charges on late submission.
Planning & prioritization to be made for fixed expenses. To determine a time frame of your earning & match it with your debts. Let’s take an example, you are earning between 1 to 15 & 25 to 30 as per calendar days plan to pay your debts in the same time frame deciding your priorities. Selling old & not essential household things will help you in your leaner time. When you get a bonus or leave pay invest in the share market where you can earn profits.
3. Think for additional revenue
It is not easy to put yourself in the market unless knowing your ability and skills with limited hours. Take a long breath! You need to step out from your routine work, explore the ideas, and search out for part-time jobs as per your ability. No matter how much you have started earning, it may be a few bucks or higher than your regular income. It always boosts your confidence and helps to keep positive in all financial situations.
Many different ways for extra income and side hustle listed here:
- Tuition and Coaching is a better option for offline & online mode
- Farming, if you have space in your backyard with help of online videos you can start
- Register yourself in on-demand applications like food delivery apps, Taxi booking apps, etc where you can earn extra.
- Data entry jobs can help you to earn more via freelancing web portals.
- Selling the products through eCommerce websites like Amazon, eBay is a good option if you have any self-crafted items.
4. Zero debt plan
You may have heard a lot of the phrase “debt is bad” but that is not true. Since buying a home or gaining a degree comes under productive debts; however, we generally take a diverse range of loans to fulfil our wishlists. Now, we need to differentiate the type of debts based on our priorities. Taking an example of two types of debts: 1) Mortgage 2) Credit Cards. If we skip paying either of the loans, the chances are you can lose your house and you’ll lose all your EMIs on that. On the other hand, a credit card may only affect your civil scores only, which you can afford and improve later.
The bottom line is: prioritize your debts based on the risks. Once you’ll get rid of any of the impactful cases the most, you will be stressed free to make this practice, while managing your budget without spending a fortune.
5. Find out a plan for extra cash
If you’ve kept all the above-mentioned tips in your mind, then you should have extra money left to spend. It’s always a smart idea to keep your extra fund for an emergency. Bear in mind, when your savings will start to give you a decent amount, you’ll have extra money to spend idly.
As we’ve already mentioned that it’s always good to speed up your journey out of debt. All you need to figure out how much money you’re accumulating after a few months. Start putting those funds in debt repayment in your zero-budget instead.
6. Relax your mind & body
After a long day or week with your hectic work schedule, your body & mind want to relax to release work pressure. Over time and late working may impact your overall health. Let your mind & body keep fresh and fit without paying for your entertainment.
- Hiking is the best option to keep fit your body and mind.
- Explore different cooking recipe at home instead to go out to the restaurant
- Read the books based on your interests.
- Watch the movies or TV shows at your home.
- Practise Yoga & meditation with your friends or family members.
Saving money with Irreregular or Low income can be tough but not impossible. Take time to think about your financial condition and future goals. Start with proper planning & execution. Once you start and accomplish your goals you will get motivated for new assignments to enhance your financial situation.
How does your budget on fluctuating incomes? Have you ever tried the zero-budget technique? Do share your thoughts below in the comment sections.