Wisdom Wednesday: How to Budget When You Don’t Make Enough Money

You lose your job. You get sick. Your husband loses his job. You are going through a divorce.

These are huge life-altering challenges with relational, emotional and financial implications. Often, the result is a situation where you don’t have enough money to pay the bills. Talk about things that keep you up at night… we’ve been there. To describe the situation as ‘unfortunate’ is quite the understatement. More like “drowning without a life vest”. Over 25 million Americans are living paycheck-to-paycheck today, and just one event could cause a financial panic.

Or maybe there was no single event that resulted in your financial situation – it’s just been the accumulation of increasing bills and a paycheck that hasn’t kept pace.

Whatever the reason – not making enough money to pay your bills is a HUGE problem facing many Americans today – so what can you do to keep it from becoming an all-out financial crisis?

Here are our 5 tips:

Keep a positive mindset

This is the hardest one, but also the most important. Negativity is attacking you from every direction. Thoughts like:

  • You will never get out of this mess
  • You will never find a job
  • You will lose your home

These thoughts will become a self-fulfilling prophesy if you give into them. And I’m saying this as a person who struggles with negative self-talk – it is a KILLER. You have to find what works for you. If you are able to stay positive and focused on what you need to do to get out of your situation, then reality will follow that positivity.

Recognize that it is temporary

Yes, this is bullet number 2, and you might be thinking ‘2 points in, and nothing actionable?’ This is on purpose. The actionable items below won’t stick if you don’t keep your head in the game. You need to act knowing that your financial situation will not last forever, and that it is simply a challenge that you have to overcome. Do not let this become your lifestyle – choose to be an overcomer instead of a casualty.

You are in a sprint right now because you need to be. But just like running, you can’t sprint forever. So make your sprint count!

Cut, cut, cut

Are you paying for cable? Cancel it. Do you have smartphones? Sell them and reduce your wireless bill. Do you meal plan and use coupons? Do you still go out to eat often?

I remember a time when we couldn’t pay our bills, I thought “well, what’s the point of budgeting?” That line of thinking was a huge mistake. Budgeting is more important than ever when you are running a deficit – you’ve got to drill down and figure out every single place that you can save money.

At this time in your life, you’ve got to get CRAZY (or is it more crazy to be paying for a 300+ channel cable package when you can’t pay your bills?) You are in survival mode – if you don’t need to be spending money on it, then you simply cannot afford to spend money on it.

Get More Money!

When you are running a monthly deficit in your budget, you have to attack this from both sides. Cut expenses and make more money. Yes, yes, I know. Easier said than done. But there are some things you can do from home that you might not have thought of. What if you were able to cut $300 from your monthly bills, and then also make an extra $300 through odd jobs or working from home? That’s $600 more in your pocket.

Can you work more hours at your job? Can your spouse go out and get another job? When you are in survival mode, no job should be beneath you, and any sacrifices you make are temporary because you are digging yourself out. If you had been laid off from a good paying white collar desk job, it’s ok to deliver pizza for a while before you land that next job.

Prioritize your bills

When there isn’t enough money to go around, how do you decide who gets paid and who doesn’t? Since we’ve been using the term “survival”, think of the things you would need to survive – food, shelter, clothing, transportation, energy… you’re first payments have to be the ones that keep you in your warm home, keep food on the table, and allow you to get to work.

After that, you need to figure out what creditors get paid, and which don’t. If you don’t have enough to pay some creditors, make sure to communicate with them. There are ways to negotiate with creditors, and this might be the time to do it. There are implications when settling debt, so be careful and make sure to do your research.

Here’s why I made the first 2 points mental rather than actionable – would you be willing to work those extra hours, to get rid of your smartphone, to take a job that might seem embarrassing, if you didn’t have a positive mindset?

The question we have for you today is what are you willing to do to make this happen?

Author: Mark Greutman

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