Do you start to get tense around the end of the month, wondering if you’re going to have enough cash to pay all your bills? Are you counting down the days until your next paycheck, calculating how many meals you can make with ramen noodles because you don’t want to overdraw your checking account by getting groceries?
Have you ever had an unexpected emergency come up that forced you to use your credit card because you didn’t have any savings available to cover it? Do you skip dental cleanings and or vet check ups for your pet because you can’t afford it?
This, my friends, is called living from paycheck to paycheck.
If these scenarios are familiar to you, you’re not alone. Lots of your friends and neighbors are feeling the same way, and it’s no fun: That nagging worry about what will happen if you can’t make ends meet can definitely keep a person up at night, to the point that stress about money can affect your overall health and wellbeing.
Keep Calm and Get Out a Pencil
The first step to overcoming your money worries is to stay calm. That panicky feeling you get is because you feel powerless, so the number one way to overcome your fear is to take control of your finances. The first step?
You need a budget.
At its most basic, a budget is just a list of your income and expenses. That’s it. So make a paper with two columns. On the left, list all your paychecks for a month — the amount you actually got, not the pre-tax amount. That’s your income column.
On the right, list your spending categories. It can take a while to round up these numbers because you need to dig out your bills. Looking at bank and credit card statements can be helpful to figure out where your money is going. List everything: rent, food, cable, cell phone, bar tabs, tuition and so on. That’s your expenditures column.
Now do the math. If your total expenditures exceed your total income, you have some more work to do.
What’s Your Problem?
When it comes down to it, if your expenditures are greater than your income, you have to fix it. You can do this in one of three ways:
- Increase your income.
- Decrease your expenditures.
- Do both at the same time.
While most people find working on both sides of their budget gets the quickest results, you have to pick one to start with. Do you have an earning problem or a spending problem? Most Americans have a spending problem, so let’s start there.
Slash Your Spending
If you’re biting your nails at the end of each month, there are definitely ways to cut back on your spending to balance your budget. Try these for starters:
- Cut back on your spending in the grocery store. Instead of buying expensive prepared foods (rotisserie chicken, anyone?), stick to fruits, veggies and ingredients to make healthy meals from scratch. Cutting back on sweets will also help you slash your grocery budget, and you’ll be in better health to boot.
- Avoid impulse purchases. Make a list when you go shopping, and stick to it. This works in the grocery store to keep those sneaky ice cream cartons and end-cap items at bay, but it also works for anything you need to get. Just say no to extras at the hardware store or Target. Stick to your list, and get out of the store as quickly as you can to avoid temptation.
- Shop around for better deals. Almost everything you buy, from food to cell phone service, can be had for cheaper. Take the initiative to research prices online and get the best deals. Try calling your utility providers to ask for better deals on phone and cable, or cut back to a more basic plan.
Increase Your Income
If you’re slogging away at a minimum-wage job, it’s time to look for more lucrative employment — especially if you have a college degree. Polish up that resume and tell everyone you know you’re in the market for a change. Networking and hitting the pavement with a no-holds-barred job search should land you something better, especially if you’re flexible about location.
If you like your job and it offers you decent advancement potential, consider picking up a side gig. The Internet offers lots of work-from-home opportunities, so start making good use of your free tine instead of binge-watching The Walking Dead. Here are some ideas to make some extra cash:
- Tutor struggling students.
- Sell things you don’t need on eBay.
- Sign up to be a secret shopper.
- Pick up seasonal work in retail.
- Moonlight as a freelancer in your field.
The Bottom Line
Just as you shouldn’t panic about your budget shortfalls, you also shouldn’t beat yourself up over past mistakes. Your future starts today, and you should feel more confident and in control of your new financial picture. To help you stay on track, consider joining a support group to keep you honest and provide accountability when you feel like falling off the budgeting wagon.
Finally, keep a goal or source of motivation in mind when the going gets tough. Do you want to increase your savings to take a vacation? Buy a house? Pay off your student loans? If you have a clear picture of your goal in your head, you can repeat it like a mantra when you feel tempted to blow some of that paycheck on an impulse buy. You may make a mistake now and then, but if you stay focused on your goal, your financial future will be a whole lot brighter.
Image credit: IM Creator