Budgeting & Solutions

How to Do a Budget

Budgeting your money or “doing a budget” is critical for your “financial health” It’s a simple process. Take your monthly income (from all sources) jot it down in one column. Then take your monthly expenses, jot it down in another column. Add up your income, and then add up your expenses. Subtract your expenses from your income. That’s the amount you have left over every month once you have paid all your bills.

How to Balance a Budget

When you subtracted your expenses from your income how much did you have left over? Is the number lower than what you want it to be? Or worse was the number in the negative? Are you spending more than your making?

If you answered yes to anyone of those questions your in trouble right? The good news is there’s a fix. There is a solution. The bad news is you may not like the solution.

Budget Solutions

If you are having trouble making your monthly payments on-time the solution is simple. You must decrease your spending or increase your income or a combination of the two. If you were thinking there is a “magic bullet” there isn’t one. The solution is, spend less money or make more money.

Easier said than done of course, but it can be done. No matter how far behind you are you can get out of yourself out of the “RED” every month. You just have to decide your going to do it, make a plan and stick with it.

First of all, don’t expect a “panacea” As Americans we tend to want instant gratification. There’s nothing wrong with that, just accept that not everything can be fixed over-night. With debt problems and budget problems the fix is usually more long term.

Start with doing a budget. Know exactly where you are. Know exactly how much you make and account for all your spending. Make absolutely sure you know where all your money is going. When you have an accurate picture of your income and your expenses, determine how much extra money you need every month to cover your bills. Knowing exactly what that number is is really important. Once you know how much extra you need every month you have a place to start. It won’t be so scary once you know exactly how much you need to have a “balanced budget”

Implement Solutions

Once you have done a budget and you know how much of a “short fall” you have, it’s time to implement solutions. Start with easiest solution, which is to cut any “unnecessary spending” It’s important that you define what “necessary” is. I know this may sound like “heresy” in this day and age, but Smart Phones, I pads, Cable TV, High Speed Internet and lots of other things are not really necessary for most people.

Make an honest assessment of your expenses. Decide what you can do without. Depending on what type of debt you have, many times budget cuts are “short term” For example; if you have Credit Card debt, whatever budget cuts you make may only be necessary until the debt is paid.

Cut everything you can cut back on. Once you have done that evaluate where you are. Have you made enough cuts to balance the budget? If not, make more cuts if possible. Once you have cut everything you possibly can, if you still in the red then you need to increase income.

Tips On Lowering Expenses

Car-Pool, Use Coupons, Check with Utility Companies Budget Plans, Unplug Electrical Devices, Use Programmable Thermostat, Use Compact Florissant Light Bulbs, Automobile Refinancing Mortgage Re-Financing, Consolidate your student loans, Request % Rate reduction from Credit Card Company, Get Quote’s from Local Insurance Agents on Car Insurance

Do some research on lowering expenses. Read some forums of success stories from other people. There are lots of great ideas out there.

Increasing Income

If you’ve done everything you can do to reduce your budget and your still in the red, then you have to increase your income. You can ask for raise at your current job, get a second job, or get a new job making more money. Take on a roommate or rent a room in your home could be a solution. Sell an asset, or property you have that can help pay off debt.

None of those things are going to be fun, but you have to do what you have to do. The most important thing is don’t do “nothing” if you do that things will only get worse.

Do a budget, cut expenses, and increase income if necessary. That’s the answer. Make a plan and stick to it. If your drowning it debt, it’s likely causing stress, sleepless nights, and more. If you do budget, and know exactly where you are, and what the amount is you need to cut in expenses, increase income and pay-off in debt you are at very least going to know the exact “number” of the short-fall or debt. It might not seem like that would do anything to alleviate the stress, but there are few things scary than the un-known. Know your enemy, your enemy is debt. Once you know your enemy you will figure out the ways to defeat your enemy. Do what you need to do.

Final Thoughts

There are debt solutions like Debt Management Plans for Credit Card Debt that could be helpful, or Debt Settlement if you are really upside down with Credit Card Debt. If you need help with that call the number at the top the page. A certified Credit Counselor at DelrayCC will assist you.