Is Budgeting Possible with a Part time Income?March 9, 2022
Budgeting is undoubtedly a very big challenge, and it becomes more complicated for those who have a part-time income source. As the name suggests, you will have money to get by.
Many of you do not bother budgeting because part-time income seems impossible. When unexpected expenses catch you up, you try to meet them with taking payday loans on benefits.
Experts suggest that you should not ignore budgeting even if you are on a part-time job. Budgeting requires constantly monitoring your expenses to have more money set aside as emergency corpus.
If your side hustle is only a source of income, you cannot make the most of your money. Budgeting is genuinely possible even if you are on a part-time job. This blog discusses some tips you should follow to make it happen.
Budgeting tips when you have part-time income
Here are the budgeting tips you should follow to ensure that you do not run out of money during your tough times.
- Track your expenses
Budgeting makes sense when you are able to save money for a rainy day, and before that, you need to figure out how much money you particularly spend every month. First off, you should make a report of everyday expenses. The bank statement will let you know how much amount you spend each month approximately.
If you use apps, you will get this information right there if it is linked to your account. This removes the need of preparing a manual spreadsheet. You can quickly see how much you can set by every month when you have an idea of it.
You may be left with a few amount of money to save based on your expenses. In such a scenario, you will have to find out ways to trim down your expenses. Jot down your expenses and then give them a category – essential and inessential.
Essential expenses will be more or less the same, but you can control inessential expenses. These expenses include but are not limited to travelling, dining out, night out, and the like.
- Maximise your contribution to savings
By cutting back on your inessential expenses, you will be able to transfer some of your money to your savings account. However, this is not enough. Sometimes unexpected expenses occur, and you may also need a lot of money for significant expenses.
You may have to plan around them from now. For instance, if you are thinking of starting your own business, you will need some savings to get it off the ground. You may also need to take out business startup loans for bad credit in the UK.
If you manage to borrow money, you will have to ensure that your business makes enough profits to pay it back. However, sometimes lenders do not get convinced with your startup business plan, and they disapprove of your loan application.
In this scenario, you will have to rely on your savings entirely. This is why it is crucial to maximizing your savings. In order to do so, you should trim down inessential expenses as well. If you can further pare down, you should.
Try to figure out how to do it. For instance, you should try to rent a house in a location that is more affordable than the current location. You should use public transport instead of your own vehicle.
Avoid using your car to cover short distances. You will have to figure out the ways to maximise your contribution to savings. You can also consider relying on a lean budget that thoroughly scrapes discretionary expenses.
You will spend money on all of your essential expenses, and the rest of the money you will throw at your savings account, which you can dip into for planned expenses or unexpected expenses.
- Manage credit cards carefully.
You have a credit card, which seems to be more manageable than cash. You do not have a fear of being mugged up when you do not have cash. However, other problems are associated with a credit card.
While using a credit card, you do not realise how much money you have spent on a particular time and when the bill is generated, you eventually realise that you do not have enough money to pay it back.
It is not meant to discourage you from using your credit card, but it means you should be careful when you use it. Try to make small transactions, so you do not suffer at the time of paying off the balance.
If you settle the balance on time, your credit score will improve. Using cash will be more convenient as you will not mount up debt.
- Maximise your working ability
As you are doing a part-time job, you must have enough time to do another job. If you can utilise those hours for another job, you should. You should try to get more projects so you can make more money. If you are unable to get more projects, you should try to look for different work.
For instance, you should look for a job like babysitting, walking a dog, freelancing, etc. Earning extra money means extra savings. Of course, some of your money will go toward your regular expenses, but a particular portion of those earnings can go toward your savings. You do not need to live off a lean budget and downsize your lifestyle if you grab more work.
The final word
Budgeting can be a serious problem when you have a part-time job, but this is important to ensure that you do not run out of money during emergencies. Try to maximise your earning potential.
Analyse your expenses and make sure that you do not overspend. Use cash if you can. If you use a credit card to make a payment, make sure that you have money to pay off the bill after the bill is generated. Use apps to track spending.