What is six months of living expenses? It’s an average amount of money that most household budgets don’t cover. This money is what’s left after all the bills are paid and the monthly living expenses have been taken from the monthly income. If you can only manage to have three months of expenses covered, then that’s just great! Don’t even try to hit that number if you think you can! It will be difficult for you to survive on only three month’s income!
The best way to do this is to keep as much of your income as possible. This includes all the money you bring home from work, any bonus checks you get, and any unexpected money you might have received. Keep as much of your income as possible until the first month’s expenses have been taken care of. Then, when the new month begins, take just five or six percent of that money and put it in a savings account. That will give you more financial freedom than ever before.
The important thing about Have a Minimum of Six Months of Living Expenses Tucked Away this money is that at the end of the month, you will have some money left over. This will allow you to have more expendable income. You will be able to have more things to do and to enjoy once your finances get back in order. When you have more expendable income, you will be able to pay for your living expenses more easily.
Saving is something that will continue to benefit you throughout your life. Even when you have your budget all figured out and know exactly what you have left over each month, it still benefits you to save as much as you can. It’s easy to go on a spending spree once you have the money. It’s much harder to have it all at the end of the month when you need it most. Therefore, saving is really important.
So how do you save money? There are several ways that you can do this. First, if you have the money, it’s always better to put it into a savings account then simply putting it in a spending account. You want to build up your savings to have a minimum of six months of living expenses. That way, when the month ends, you will have enough money to pay all of your bills, save for your emergencies, and be able to pay off your debts.
Another way is to only use one credit card for your expenses. You never know when you might run into debt and you need to get your bills paid. However, if you spread out your spending across several cards, then you don’t have to worry about keeping track of which card has what and where it’s going. Also, if you have one card, then it’s easy to forget about it when it comes time to pay it off. It’s far more convenient and easier to just pay all of your expenses with one card.