Frugal Friday: Living on the Edge Financially

I know a lot of folks that have been hit by hard times financially. And who knows how soon that will start to change. It makes me sad to see people that struggle to make it month by month by month with an almost insurmountable task to make every penny stretch as far as it can go. That's tough. Really tough. Maybe they've lost a job. Maybe they've had some major medical expense. Maybe for some other reason. These are folks who live on the edge of their incomes, not by choice, but really because they have no other choice. If you're in that boat and are making it work, I applaud you! Good for you! That's amazing. I hope along with you that this is only temporary for you.

But I know a lot of folks who may think they're in that same boat, but they're not. Maybe they blame it on a financial crisis, but really there's always a financial crisis with these kinds of people. No matter what they make, every month's income is spent. Completely. If the income rises, so do the expenses. These people think they are being financially responsible because they try not to accrue much debt. But they also leave no cushion. They are much like a toddler trying to walk a balance beam that's narrow and rickety. Can they do it? Yes they are capable as long as the balance remains. But what happens if one toe steps off? Or in the case of finances, one extra expense comes up that was unexpected? It's so easy to fall off when you are living on the edge.

Living on the edge financially means spending all or more of your income every month. 

So how do you stop living on the edge? You start to build up a safety cushion. You SAVE. Not just later. Not just when you're life will get easier in the bright, far off future. You save now. You set aside money each month before expenses. Not after. After expenses there will be nothing. So count on that. You will always have expenses. So you save first.

How much do you save? Sit down with a budget and plan out your necessary expenses. Notice I said necessary. You have to be careful with this and you might want to read my post on luxuries vs. necessities before you do it. Then determine how much you can possibly save each month. Be honest with yourself, realizing that this is your key to financial freedom and stability. Save as much as you possibly can.

Once you've figured out how much to save, then you need to apply it. As soon as you are paid you transfer the amount you decided on to savings. You can do a transfer yourself or even have it done automatically - there's lots of jobs that will let you transfer $ to savings automatically through direct deposit. However you choose to do it, do it religiously. Especially if you've fallen into the habit of always spending what you have.

Each month, as you save a little more and a little more, your safety cushion will grow. If you do happen to fall off the edge a little, you'll have a cushion built up so that you won't fall so far and it's easy to step right back on.

Now I'd like to hear from you...Have you ever struggled with living on the edge of your income? In what ways have you found to cut expenses so that you could save even more?

Happy Frugal Friday everyone. I hope you have a lovely day.

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