Your salary may not always be sufficient to cover all of your needs.
Perhaps you were promoted to an excellent position that looks good on your resume, but your lucrative overtime bonus is no longer available.
You may have been offered benefits such as medical insurance, for example, and while everything appears to be in order on paper, you may not have enough money in your wallet.
This is where the “B” word, Budget, comes in handy.
All the experts begin with an honest evaluation of where your money is currently being spent.
How can you control the flow of money if you don’t know where it is currently going? Make a list of all the unpleasant realities so you can face them head-on.
A higher salary does not automatically solve the problem; it is solved by controlling how you spend what you earn.
This can be seen in the sad tale of many lottery winners who lose large sums of money in a matter of years or in the way even high earners go bankrupt. This means you have hope because you can control your cash flow by working with real numbers rather than dream numbers.
Here are a few tips to help solve this issue
Begin saving: Save a portion of every dollar you earn. Begin with 1% and gradually increase it by 1% each month for a year.
Yes, you guessed it correctly: by the end of the year, you will have saved approximately 12% of your primary income.
Now, add the previous 2-3 months’ living expenses to create a cash reserve. Don’t let your spending outstrip your income. Set up an automatic transfer to your savings account for every salary increase or end-of-year bonus.
Invest wisely: Once you’ve regained control of your finances and have a cash reserve, you can consider investing in the stock market or unit trusts.
Review your expenses: For the first 2-3 months, cut your spending by 10% and stick to it.
It will be difficult at first but do not give up.
When you’re satisfied with your existing condition, increase it by 10% and repeat the process every 2-3 months.
If you’re serious about your finances, you’ll have lowered your spending by at least 30% over the course of a year.
Keep a visual reminder of your plan and your objectives in mind.
You are not “trapped” with that pay; you choose to remain in that employment for a reason. Is your justification still sound? Is it possible to request a performance evaluation and a raise?
Are you getting the most out of your benefits? You may need to sit down and crunch figures with those engaged in your financial decisions, but the time and effort it takes to get everyone on the same page will be well worth it!