February is one of those odd months that many don’t know what to do with. From Groundhog Day to Valentine’s Day to the intermittent leap year celebrations and other bank holidays, it can be a weird way to come out financially from the first month of the year.
Plus, it’s a shorter month that can wreak havoc on the finances of hourly workers or anyone else who will get paid less this month while having the same monthly expenses. If you’re in this situation, check out these tips to help you during a shorter working month.
Calculate Your Budget for the Month
If you haven’t already, write down a list of your monthly expenses and their due dates. This will help you understand your financial obligations and exactly when you need to pay them. You may even find that some of your regular bill due dates are shifted due to the shorter month.
Either way, this information will equip you to plan out your month from a financial perspective.
[Read: How to Make a Budget — and Stick to It.]
Calculate Your Income for the Month
Just as you did with your expenses, calculate your expected income for the month. Review your schedule or past pay stubs to estimate how much you will bring home during February. If your hours are reduced due to the shorter month, note how this will impact your earnings.
Here’s How to Handle a Gap
If you notice a gap between your expected expenses and income, begin planning to cover the shortfall. Here are five strategies to help:
1. Pick up Extra Work
“Seek out extra hours or shifts during the shorter months. If you work in caregiving, you will probably find opportunities to add on extra shifts, especially during the weekend or holiday times when you might get premium rates because the need is so great,” says Neal K. Shah, CEO of CareYaya Health Technologies.
2. Reduce Expenses
If you have any discretionary expenses that you can adjust this month, think about reducing them. For example, you might be able to cut back on your food and entertainment budget to ensure that essential payments like rent, utilities and transportation are covered.
[Read: How to Save Money When Grocery Shopping on a Budget]
3. Explore Payment Flexibility
Reach out to your service providers or creditors to see if there’s any flexibility in your bill schedules. Some companies may allow payment extensions or offer alternative arrangements that can help stretch your budget during economic hardship. It’s always worth asking, especially if this move will preserve your good payment history.
[What to Do if You Fall Behind on Bills]
4. Add Extra Sources of Income
If possible, look for opportunities to bring in additional income. This could include offering freelance services, selling used items online or even participating in gig work like food delivery or ride-sharing. Even small amounts of extra cash can help fill the gap during a tighter month.
[16 Best Apps for Buying and Selling Used Stuff]
5. Set Aside Savings in Advance
If you know a shorter month is approaching, consider setting aside some savings in the months leading up to it.
Creating a small financial cushion can help reduce stress and cover any unexpected expenses that may come up. Start with whatever amount you can afford, even if it’s just a small sum, and gradually increase your savings over time.
Make a Long-term Plan for Financial Emergencies
Fortunately, February only comes around once a year, but financial emergencies may crop up year-round. That’s why creating a financial buffer for all occasions is a good idea.
For instance, you can start a savings habit by automating your savings with recurring transfers into your savings accounts. Additionally, you can track your spending to identify areas where you can cut back and redirect those funds into your savings.
In other words, you should aim to plan for unexpected expenses on a regular basis. Because, let’s face it, as you hone your budgeting skills, you can easily forget some expenses and even underestimate them.
If you’re unsure of how much to save, consider planning for an extended time period so that you can better predict your financial needs.
“When you look at a weekly or monthly budget, it can be too easily thrown off by the variability of your hours. While it’s still important to do your best with monthly budgets, quarterly or yearly budgets can be more predictable and help you plan out your expenses and savings. The variations you’ll see on a weekly or monthly basis will get smoothed out when you zoom out a bit,” says Mike Kern, a certified public accountant and founder of the FreeBudget website.
[How Much Should You Save In an Emergency Fund?]
5. Consider Getting Professional Financial Guidance
If you continually find yourself in a financial bind as an hourly worker or someone who earns variable income, there’s help for you. Although you may not feel you earn enough money to hire professional financial help, it could be a great investment.
No matter your income or financial status, having a clear financial plan helps you create strategies tailored to your unique financial situation. A financial advisor or coach can offer helpful insights into managing fluctuating income and prioritizing goals like saving for emergencies, reducing debt or retirement planning.
The good news is that many organizations and companies also offer free or low-cost financial counseling services, making them accessible even to those on a tight budget. If those options are still outside your budget, starting with books and instructional video content on personal financial topics can also be a great first step on the right path.
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How Hourly Employees Can Plan for a Shorter Working Month in February originally appeared on usnews.com
