However much you might want to avoid it, there may be occasions when a gap emerges in your earnings. What exactly do I mean? I’m referring to a disparity between what you spend and what you earn. Should the former outweigh the latter, you are obviously on the road to financial problems… unless you know how to handle this gap effectively.
The mantra that “bad times don’t last” applies as much to finance as it does to other aspects of life. So, how can you prevent your financial situation going off the rails while you wait for your earnings to pick up again? Here are some ways that you can relieve the struggle.
Aim to spend less than you earn
It’s a simple principle: if there is less going out than there is going in, you can create the right kind of earnings gap – one that leaves a little surplus money in your pocket. However, struggles can obviously arise if you lose your job or a family member suffers a major health crisis.
Therefore, you can benefit from stripping out unnecessary expenses; looking more closely at your spending habits could assist you in doing that. You could also endeavour to grow your income, though this is the harder option; ESI Money notes that “earning more requires time and extended effort with sometimes no guarantee of the payoff.”
This risk could draw you towards simply living more frugally – so, how can you do that?
Exercise “moderate and selective frugality”
This term comes from ESI Money, which also provides a definition. Moderate frugality means keeping spending relatively restrained, but not to the extent of purchasing something simply on account of its price being the best. Instead, you would seek value – weighing up both cost and benefit. So, you could sometimes pay a higher price for something that seems genuinely worth it.
Meanwhile, selective frugality is about not extending the cost-cutting to all areas of life. This approach means not necessarily forgoing a new car or trip away – though, if you do opt for either of these, you should still aim to obtain it at the best possible price.
Develop supplementary income
You might still be in a job but have recently seen your level of necessary expenditure skyrocket. This can happen if, for instance, you need to pay for someone’s health problem a cure for which cannot be funded by any other sources you have access to.
In this situation, you could still weather the storm by developing a side business. With freelance writing or blogging, you might be able to dip in and out of it as your financial needs dictate. Alternatively, you could obtain a second job.
When you seek to bolster your career returns in any of these ways, reading career advice on job listings site CV-Library could really help. Of course, that advice is also worth considering should you have fallen completely into unemployment – a bad spell to which you could soon bring an end.