Are you living paycheck to paycheck and want to know how to get a month ahead on your finances? If so, keep reading.
My husband and I have been living on last month’s income for a few years for various reasons.
The first reason is that I used to get paid on the last day of every month. The second reason is that we’ve been using YNAB as our budgeting software since the beginning of our debt-free journey.
Being a month ahead makes it easy to get your bills paid all at once and not worry about budgeting every week.
Another benefit is that you will know in advance if you have enough money to cover the next month’s expenses.
You have time to prepare, get a side hustle, or sell a few things to make up the difference.
So, let’s talk about how to save money in order to get a month ahead on your finances.
Add up your expenses
The first thing that you want to do to get a month ahead is add up all of your expenses.
Add up everything that you pay in a single month. Don’t forget to include your rent/mortgage, the electric bill, phone bill, gas, groceries, anything that you pay during the month. Add these up and keep a running total.
It may be beneficial for you to do this over the span of a couple of months. You want to have a good picture of what you’re spending each month, and you’ll have a more accurate total.
For my household, we need $3,500 every month. That covers all of our expenses.
Anything that we make in a month over the $3,500 goes strictly towards debt or our savings goals.
Create a budget
The next thing that you need to do is to create a budget. If you’re going to get a month ahead on your expenses, this is important.
Include all of your monthly expenses in your budget and create a category for a buffer.
The buffer category gives you a place to hold your money while you’re saving up for next month’s expenses.
Track all of your expenses and add any extra money to the buffer category for the next month.
On the first of each month, zero out the buffer category and budget for your month.
It feels great to go down your budget and know that everything is covered.
Next, it’s time to cut expenses. It’s not fun to cut expenses, but this is an effortless way to get a month ahead.
Cancel any subscriptions that you’re not using. You might even find some that you are using, but you could do without.
Do you need a gym membership when you could watch free workout videos on YouTube?
If you really want to get frugal, you can get rid of Hulu and Netflix as well.
The more expenses that you cut, the more money you’ll have to get a month ahead.
Get a side hustle
The next thing you can do is get a side hustle.
There are a couple of rules for side hustles when you’re using them for a specific purpose. First, you want to make sure you find a side hustle that pays regularly and quickly.
The next rule is to find a side hustle that you enjoy. The worst thing you can do is work your regular job and come home to do side hustles that you hate.
Once you find the perfect side hustle, save the money to build your buffer.
Build a buffer
The last thing to do to get a month ahead on your finances is to add any extra money you receive to your buffer category.
Bonuses from work, extra paychecks, stimulus checks, and tax refunds are great options.
Take the extra money and add it directly to your buffer category until you’ve built it up to the amount of your expenses.
It may take you a couple of months or even a year to build up your budget, depending on your situation.
Once you build it up, it’s easy to maintain. Just make sure to send the money you’re making in the current month to the buffer category.
The bottom line
Getting a month ahead is one of the best things you can do for your finances, especially during these uncertain times.
It takes the guesswork out of your budget for the next month. It also gives you a bit of financial security knowing that next month is already covered.
Figure out a strategy that works for you and build up your buffer to start living on last month’s income and break the paycheck-to-paycheck cycle.
Now, I want to hear from you. What is keeping you from getting a month ahead on your finances? Are you going to try any of the tips listed here? Let me know in the comments below.