Changing Your Spending According To Your Circumstances
Your personal circumstances can often change for the better or worse. Getting married, having a family, starting a new job, getting divorced. These are all life events that can have a positive or negative impact on your finances, which is why you need to learn how to adjust your spending habits accordingly.
How to Adjust When You Get an Income Boost
Sometimes an income increase can be problematic because you’re suddenly tempted to start spending more money. This can often lead to overspending and suddenly all the money is gone. That’s why you need to adjust your spending accordingly so your extra income can be incorporated in a sensible way.
Create an emergency fund
Now that you’ve got extra cash coming in, it’s a good idea to stash some away in the case of an emergency, for example, you need car repairs, or you have medical bills to pay.
Pay off high-interest debts
Pay off those credit cards with a high APR. Have the payment deducted automatically so you can clear your debts as quickly as possible.
Save for a high ticket item
Save some money for a treat for yourself, such as a vacation, a deposit on a new car or a flat-screen TV.
How to Adjust When Your Income Plummets
When you have to take a sudden drop in income, whatever the reason, it’s very easy to feel that you’re stuck in a rut and can’t do anything about it. But you can. You must stay positive and learn how to adjust.
Adjust your outlook
Don’t panic. Although it’s a tough adjustment to make when you lose your income, it is possible to get by. Just don’t do anything rash. If you feel really overwhelmed you may want to consider assistance with settling debt.
Streamline your budget
Cut out any expenses you can. For example, take a sack lunch to work instead of going to the café. Get used to not being able to always have the things you previously took for granted.
Automate your financial transactions
Set up your bank account to make automatic bill payments and savings, that way you will not be tempted to spend the money.
Reassess your bills and belongings
It’s time now to see what cutbacks you can make at home. Do you really need all those cable channels? What about all that stuff piling up in the garage and the spare room? Perhaps it’s time for a yard sale.
Start looking for work
Right now you should be prepared to consider just about any job to get money coming in again. If you’re struggling to find work outside of your home, think about starting up your own business from home.
If your income suddenly changes either for the better or the worse. Make sure that you adjust for it accordingly so you don’t make any rash decisions and you don’t end up losing your shirt.