Saving up a buffer to get you through quieter work periods can help take some pressure off. Here’s how to prepare for bridging the income gap when you’re between jobs.
1. Review your current budget
The time to prepare is while you’re working. If you haven’t already got a budget, have a look at your bank statements and highlight any unnecessary spending. A living budget can help you figure out how much you need to get by every month, so you’ve got more of an idea about “essential” and “non-essential” spending.
You don’t have to be ruthless – there’s no point being miserable if you can afford the things you want – but you might find some miscellaneous outgoings that would be easy to give up, freeing up some cash to divert into savings.
2. Set up a saving goal
The money you’ve saved will effectively become your income while you’re between jobs, so it’s more of a working savings pot rather than a rainy day fund. Keep this separate to any other savings you may have, e.g. for holidays or Christmas, so you don’t accidentally dip into the wrong pot.
You could set up a savings Goal in your Yolt app to hold onto the money you’re transferring from your current budget. This will help you keep track of things by showing you exactly how much you’ve got saved towards each Goal, and helping you stay motivated.
3. Create a between-jobs budget
Use your living budget to see what you’ll need to cover if you have a gap between jobs, and create a new budget based on your savings rather than your income. This will give you an idea of how far your savings will stretch when you don’t have any money coming in. It can also make sure you’ve got all the essential things sorted, like rent/mortgage and bills, so that’s one less thing to worry about.
The time to prepare is while you’re working, so as soon as you start a new contract, repeat the process of reviewing and saving again, to top up anything you may have used. If you haven’t used any savings, you can continue building up your backup fund to make sure you’re covered for any eventuality – or to fund time off if you need a longer break.
Budgeting and saving go hand in hand, and the Yolt app means you don’t have to fiddle about with spreadsheets and lists. Track your spending and saving, with visual charts to help you stay motivated, and celebrate your progress.