When we talk about budgeting, its often in the context of how you should spend a fixed monthly income. Apportioning money to categories such as bills, debt repayments and savings is easy when you know how much is going to be coming in each month.
But if your finances are less certain – perhaps because you are self-employed, or because your employment has been affected by the pandemic – then there are things you can do to get back in control.
Prioritise your short-term goals
Short-term goals are all about making sure that you can handle an emergency situation, without worrying too much about the bigger picture. This means building a savings pot that could cover an unexpected bill such as a car repair, or a sudden redundancy. A good size saving pot can prevent you from resorting to high cost short term credit like quick loans in case of a financial emergency. Most experts suggest that you should aim to build up around three months of outgoings and keep it in an easy access savings account.
This is particularly important if you currently have an income coming in but are uncertain about your future employment. Many advisers recommend cutting your expenses as much as you can (whether that means eating more frugally or cancelling subscriptions like Netflix) to funnel as much as you can into the emergency account, until you reach your savings goal.
Look for a second source of income
Having an additional stream of income can help to provide a safety net for the future. You may be able to monetise your hobby, whether that means freelance design work or setting up an Etsy shop to sell your crafts. There is a lot of guidance online to help you set up a side gig, and although it’s unlikely to replace your full-time work, it can help boost your savings and give a little piece of mind.
You could also consider picking up weekend or out-of-hours work, perhaps through a temping agency. This can help if you’re struggling, but do try and make sure that you’re leaving yourself with enough time to recharge your batteries and focus on your own wellbeing. Also remember that many contracts state that you must get permission from your employer before picking up additional work.
Review your career options
People often feel uncertain about their future when they’re not in control of their career. Perhaps you’ve fallen into a job that you’re not particularly passionate about. Or maybe your career seems to have stalled and you’re being passed over for promotions.
Consider what opportunities there are in your current field – could you consider moving into a better paid or more stable role in a new company? Alternatively, you may be able to improve your position by making a sideways move into another industry. Simply making a list of your skills and strengths is a great start, as it allows you to consider which roles you would perform well in. It’s also an opportunity to identify gaps in your experience and consider how you might be able to fill them.
Even the best-laid plans can fall through, but having short term goals and ideas for boosting your income can help to relieve a lot of stress and give you more stability.