When you don’t have enough income coming in to cover your household expenses, it can be very difficult to make ends meet. And if you’re living paycheck-to-paycheck without any kind of safety net or plan, then it’s easy to fall into the trap of overspending and dig yourself further into debt. But with the right budgeting and financial planning tools, you can still make sure you have enough money to pay your rent and utilities while avoiding credit card debt or bankruptcy proceedings. Use these seven steps to effectively manage your household finances in the face of insufficient income.
1) Create a budget
Step one of managing your household finances is understanding what comes in and goes out. Figure out how much you spend on bills, food, entertainment, and anything else—and estimate how much those untracked expenses cost —like buying a coffee when you go to town, etc. This will give you a rough idea of how much money you have coming in versus going out; based on those numbers, you can create a budget that will help keep your finances afloat.
2) Seek Compensation Where It Is Due
If you find yourself out of work following an injury that occurs in the workplace or unfair dismissal, you want may need a workers’ comp attorney on your side. Indeed, most states have guidelines for how much you should be paid for a work injury if your employer doesn’t cover your medical bills. In cases like these, some employers can make it difficult for workers to receive the compensation they are due.
3) Protect Your Rights
As a freelancer, you may not always be receiving payments on time for your work. It is important to create easy paths for clients to pay you and keep communication open with them. If a client still refuses to pay, you can try to re-initiate contact via other methods or even try an attorney’s letter to start a legal procedure.
4) Re-Evaluate Household Expenses
Before jumping into a new career or new job, make sure you’re re-evaluating your household expenses. A good way to do so is by creating a budget that accounts for all of your monthly costs (such as car payments, rent or mortgage payments, and so on). Don’t forget about fixed costs like insurance—it’s easy to forget about them in times of financial uncertainty. Could you remove or decrease some of these costs, such as switching providers or canceling a service?
5) Seek New Income Sources
A side hustle is often one of your best income sources. This can take many forms and should be tailored based on your strengths and interests. You can use a side hustle to create a secondary source of income that can complement your existing household income.
6) Find Supportive People To Help
Finding a good support system of family, friends, and financial advisers can go a long way in getting you back on your feet. The key is to find people who understand and respect you as a person. They should have enough experience to provide sound advice without resorting to judgment.
7) Get Better At Managing Money – Set Goals
It helps when you have something specific in mind that you’re trying to achieve. Whatever your goal, make it an objective and stick with it.
Is your household income not enough to support your needs? Hopefully, these tips can help you recover from income uncertainty.