The Family Finances is pleased to be participating in a $100 giveaway raffle for our readers! The contest runs from December 17th to 29th, and you enter via any of the methods shown in the rafflecopter widget at the bottom of this post.
Have you ever experienced this situation: You have one week left in the month, but your money is all gone. You still need to buy groceries, get a couple prescriptions filled, and pay for a couple of school activities for your kids. Your faced with the choice to either scrape by without these things, go ahead and put them on the credit card, or rearrange your bill payments so that you can get by until your next paycheck. Sound familiar? Sometimes when you’re trying your hardest to make ends meet, it seems like somebody is moving one of the ends!
Unfortunately, there is no magic solution to this problem. The underlying issue is one of two things:
- Your monthly expenses are too high; or
- Your monthly income is too low
So, what do you do about the situation? How can you break the cycle and reach the point where you aren’t going into the red each and every month? I know for a lot of people it is anything but easy. The fact is, the larger your debt load, the more difficult the journey will be.
Step 1: Determine Your Monthly Expenses
Before you can attempt to fix your monthly cash situation, you need to first determine where your money is going. Even if you know you’re spending more than you have coming in, get it in writing. List out all of your monthly bills. List out all of your irregular bills (like the car insurance bill that comes every six months). List out everything that you pay for with cash. Look through your list and see if there is anything you can either cut down on or cut out completely. Maybe you’re paying for a landline phone that you haven’t used in six months. Maybe you’re paying for some memberships that you never use. The point is to take a look at absolutely everything that you’re spending money on.
Step 2: Decide Whether You Have an Expense or an Income Problem
Sometimes the problem is that we’re spending too much money on too many things. When you add up the mortgage, a car payment (or two), a student loan payment, cable/satellite bills, monthly utility bills, and everything else it’s easy to see why you’re spending more money than you’re bringing in. Sometimes spending isn’t really the problem. There are certain things like housing, food, and medical care that have to be provided. They are not optional. If you’re making minimum wage, or are only working part-time, you simply aren’t going to be able to get by (especially if you have other people living on your income).
Step 3: Spend Less, Make More, or Some Combination of Both
If you’ve gone through steps one and two, here is where the rubber meets the road. If your spending is too high, you need to cut some things. Look into the possibility of changing your homeowners and auto insurance policies. If you’re renting a house or apartment, look into places with more reasonable rent. If your income is too low, see about getting an additional part-time job or if any overtime is available at your current job. Maybe you can turn a skill of hobby of yours into a profitable side-hustle to bring in a bit more money each month. If your house is full of unused things, try selling them. Have a garage sale or list things on ebay or Craiglist.
The Bottom Line
Making ends meet in today’s economy is a challenge for many people, so don’t feel bad or beat yourself up if you’re having a hard time. The best thing you can do is be honest with yourself about your situation and commit to doing whatever it takes to making things better. It will be difficult at first, but the sooner you get started the better you’ll be down the road.