Ways to Make a Lean Month Easier
Have you ever tried squeezing money out of a rock? I have and no, it does not work.
So what are you to do when you have a lean month and you need some more cash to pay your bills?
As a sign language interpreter my business is cyclical. During the spring and fall semesters I earn the majority of my income. These good months are offset by the 3-4 slow months over summer and winter.
Lean months can happen from other causes. You could have several months of unexpected expenses just bombard you one right after another without a chance to recover. It could be a pay cut or a job loss. You could be on commission. Lean months can happen to anyone and probably will happen to you at some point. To my knowledge, there is not a way to avoid all financial stressors, but we can certainly prepare for as many as we can to lesson the impact.
Rainy Day Fund
The first way I prepare for lean months is to acknowledge they are coming. I know when my lean months happen, usually June, July, August and December. You are much more prepared to handle a lean month when you can see it is coming a couple months ahead and then slow time does not catch you by surprise.
Secondly, I discipline myself by following a strict budget when I am having a good month and there is substantially more income than expenses. The extra amount above all the expenses will get put directly into savings to cover expenses when it is a slow month. Call it a rainy day fund or a slow period fund or whatever you want, just save!
This rainy day fund is separate from your emergency fund and should only be dipped into when your income does not cover your expenses for the month. When your income is variable or you know a slow month is coming, it is not an emergency! Once you experience another good month, you continue to put the extra money aside for the next time you will need it.
Having rainy day money in savings does not mean you can go buy a new computer because it is on sale or go on a vacation. A better idea to save up separately for those items.
I divide out my savings account into specific categories (I have around twenty sub savings accounts!). Using Quicken makes it easy to see all my sub savings accounts at a glance. I will save until there is enough money to purchase what I want or until the money is needed for a life event.
Another thing I will do on lean months is to start cutting the non-essentials from the month's budget. One example is clothing. I do not go shopping during my slow months. I choose not to tempt myself by even going into the store. If the clothing envelope has no cash in it, I do not go shopping. Period.
If I can not cut the entire line item out of the budget, I will reduce it instead. Groceries can lend itself nicely to spending less. I have food in my cupboard and freezer I can use up rather than spending so much money at the store.
Planning your spending is another way to cut costs. Looking in my freezer allows me to forecast when I will need to stock up on meat again and can make the shopping trip land on a better month. This allows me to cut back my groceries by not needing to spend as much when money is tight but ensuring I will still have food in the house.
Bring in More Money
Besides cutting expenses, I will work as hard as I can in the few weeks prior to a slump picking up additional hours with specific times of day or interpreting assignments I would normally turn down. I may be tired from working late (or going in early or working on the weekends) and not care for the type of jobs, but hey, it is all worth it when my following slow month is not quite as low as projected.
You can always have a garage sale and earn some extra money by selling something. Bringing more income into your month is always a very nice way to handle the low periods and can be done a myriad of ways. If your profession always has a slow period during a certain time of the year, get a temporary job during those months.
Can I tell you something? I think I am addicted to selling. I get such a thrill out of cleaning out my house and then being able to sell the item for cash. Granted, I know I will not be able to quit my day job selling used household items, but handing over something I do not want and receiving cash for it is a great feeling. However, keeping it real, there are times where I post ads on Craigslist or take a bag of clothes to the consignment store and come up empty handed since no one wants to buy my stuff.
Watch Your Budget
Following your budget is critical to surviving a lean month. As you look at your budget, you will easily be able to see what categories you can cut or reduce temporarily. Only spending what you have budgeted will help alleviate the stress of the limited finances.
During the slow times, you may need to say no to going out with friends and tell yourself no on several things you want to purchase (just blame it on the budget, 'oh I would love to go out, but my budget will not let me').
Pressure to Spend vs. Winning with Money
The pressure to do everything friends/family are doing and spend money in the same ways is real and it used to really bother me. We all, at some level, want to fit in and be liked without being singled out as being different.
I have made an interesting observation in my five years of being debt free and continuing to live on a budget. The longer I go without payments, the less I care about impressing people with how I spend my money (or do not spend it). I need to make financial decisions for my family to benefit us the most both now and long term. Family and friends do not know what my financial goals are or how I need to provide for my family.
Going out to dinner every weekend or buying the newest tablet will not ensure the financial stability and success of my goals. If friends decide to delete you from their friends' list because you are not going to dinner with them, then they probably are not your true friends anyways.
Plus there are plenty of ways to still enjoy hanging out with your friends without spending money, go to a park, have them over to watch a movie and cook dinner at home.
You do not need to spend money to develop relationships and have some fun. Do you need permission to stand up and say no to the pressure everyone else puts on you to spend more than you can afford? I have your back and I give you full permission to tell your friends and family 'No'.
Now is the time to start making money decisions which cause you to win.
I know what winning with money looks like, it is getting and staying out of debt, paying cash for college, and saving for a rainy day. Last time I checked, I win with money every day, so there is no reason big enough to cause me to succumb to the pressure of spending money in ways that do not line up with my budget or financial goals.
Instead of trying to squeeze money out of a rock, tell me how you can win with money the next time you have a lean month.
Like this post? Check out all the rest in this Budgeting When Money is Tight Series
Hi! I’m Charissa. I’m on a mission to help hardworking women overcome money struggles and gain financial peace with a Biblical perspective so they can have the freedom to impact their families and communities. Ready to make some changes that will impact your finances in 2020? Click here to get a free worksheet to help you make it happen!