surviving the recession

So many people who try to budget start off with their income and then work backwards to see what they can spend. You really need to work the other way around.

Go through all your expenditure, from rent to clothes to entertainment. Don’t leave anything out, and always include annual items such as the yearly car service (with the annual items, simply divide by 12 and then add to the monthly budget). Once you have got your figure, this is the Big Number - what it takes to live reasonably comfortably. The key thing to note is that it has nothing whatsoever to do with what you earn. Don’t increase spending when you get a payrise, and don’t live paycheque to paycheque. Instead, if you earn more than your Big Number, save it (set up a standing order so the money is transferred automatically to a savings account).

If you earn less than your Big Number, then you will obviously have to cut back on expenditure and deal with the discomfort. But it should be an eyeopener that you need to somehow earn a bit more.  So head to the categories in the sidebar labelled earning money and earning money online, to pick up tips on how to raise extra cash.