5 Tips to Budget After a Pay Cut
In Dubai, and elsewhere, quite a few of us have had to undergo a cut in our work hours, pay, or both due to the pandemic. Read on to find out some great budgeting tips to help you get through a pay cut.
People around the world are having anything but an easy year. The COVID-19 pandemic has caused many companies to decrease their working hours, cut pay or both. Either way, a growing number of people have experienced pay cuts, making it difficult for them to survive.
Let’s face it: an unexpected dip in your income can transform your day-to-day life, especially if you aren’t sure of how long it will last or if it will impact your ability to meet expenses. However, with a little budgeting and adjusting, you might be able to pull through these tough times.
Here are a few tips to help budget after a pay cut.
Determine Your Essential Costs
The first step to budgeting is estimating the absolute minimum amount of money you need to cover your essential living expenses. Food, utilities, shelter, and transportation are some significant costs you need to consider. If you’re currently under debt, making sure to include debt payments in your necessary living costs, too.
Cancel Useless Subscriptions or Memberships
You need to start focusing more on necessary costs rather than luxury expenses. If you aren’t use any subscriptions and memberships, there’s no better time than now to cancel them. After all, there’s no point in paying for something that you’re not using. If you take a closer look at your monthly bills, you will surely find at least once subscription that you’re not using.
Cut Back on Restaurant Spending
Spending on food makes up a rather large chunk of any home’s monthly budget. Eating out might seem like a short-term negligible expense, but when accumulated, it can be quite a big amount. Once you start saving money by eating at home, only then you will realize how much money you were spending on eating out.
There are three main ways to cut back on restaurant spending. Firstly, you should try to make meal planning a habit, whereby you weekly stock up groceries to cook. Secondly, you should choose pickup over delivery to save delivery charges. Lastly, try to look up on local restaurant deals to see if you can get your favorite food at a promotional price.
Save Money on Utilities
Utilities often make up a huge portion of your monthly expenses. When you experience a drop in our monthly revenue, every bit counts when you’re trying to lower your living costs. It’s important to keep your monthly household expenses no more than 50% of your net income.