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How to Make the Money You Have Last Longer

How to Budget if You Don't Know When You'll Be Paid Again - Part 5

We can’t change the fact that you don’t know exactly when or how much money you'll bring in this month, but we can teach you to be in total control of the money you do have right now, and stress a little less about it. This eight-part series will teach you exactly how to budget successfully and make your money stretch, unpredictable income and all.

If you missed them, get caught up, we'll just wait here…

So you are asking the right questions, resisting the urge to forecast and thinking through your monthly expenses a little bit differently.

Preparing for irregular bills by treating them as monthly expenses seems easy enough when it comes to something like an insurance payment. After all, there’s no mystery to when it is coming or how much it will cost. Just break it down, budget for it each month, and it’s done. When it is time, you are ready—zero stress.

But what about unexpected expenses? Things you don’t even want to begin thinking about? When the car breaks down or medical expense comes up? Or there's a global pandemic and your predictable income gets flipped on its head? Sure, you just hope upon hope upon hope that they will never happen: but they do, and here you are—so what happens now? What are you going to do?

Well, actually quite a bit. Here's how to take the money you have and make it last longer, using all the skills we've learned so far.

1. Do You Have That Budget Yet?

Don't have a budget yet? You need one. Specifically, a zero-based budget (aka one where you give every dollar a job and you only budget the money you have).

This kind of budget shows you how long the money you have will last (and that popular app that rhymes with shmint isn’t set up to tell you this). When you know how far your current money will go, it helps you make informed decisions about what financial levers to pull (and how hard to pull them) now.

Already have a budget and wondering how to set it up to handle uncertain times? Watch now.

2. List Out Monthly Expenses

Add up all the things that typically require your cash (yep, including the impulse Target runs, and definitely including all those non-monthly expenses like car insurance or Amazon Prime). You’re trying to get to a number: how much cash does a month of your life cost?

3. Separate "Needs" from "Wants"

Take your list of expenses and sort them into needs and wants. Needs at the top, wants at the bottom. Try not to overthink this one: do you need it? Can you live without it?

4. Budget as Far as Your Money Will Go

Take the money that you have right now and go down the line of your needs and wants, assigning specific jobs to the dollars you have. Go through this exercise as far as your money will go: budget this month, budget next month if you can. See how far your money will go.

Run a few scenarios: what if you only budget for the essentials? What if you budget for the essentials + a few extras?

You’ll arrive at the reality of your financial situation by the end of this step. It might be a little harsher than you wanted, but in this moment you’re taking back control. (Do you see it?! You’ve already started making decisions…”oh, I can cut this. I can live without this”). It’s not being forced on you, you’re just seeing your situation and you’re the one calling the shots.

5. Pull Levers to Stretch Your Money

Now here’s the really empowering part. You know where you stand, and knowledge is power. Your brain will unleash its own creativity to fill in the gaps. If you need more room in your budget so your dollars last longer, here’s where you go to town.

  • Trim your own budget (cancel subscriptions, spend less on food, cut down on "wants")
  • Reduce cash required for "needs" (negotiate your interest payments, pause on aggressive debt repayment, request deferment or delayed payment in rent)
  • Bring in more cash (pick up odd jobs, freelance, apply for unemployment)

Now you know where you stand, so decide what levers you need to pull and how hard you need to pull them.

6. Let the Budget Guide Your Way

Now that you’ve created a slim, trim plan for your money, now you follow it! Use your budget to guide your spending, not your bank account. 

We don’t know what’s going to happen next any more than you do. But, the closer you can follow these steps, the further out your money will build a bridge in front of you.

Next up, Part 6: Things Change, Your Budget Can Too!

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