Let’s just say you are on board with the idea of a debt free lifestyle. You’ve drunk the Kool-Aid and bought the t-shirt (paid for in cash). However, sometimes your income just does not cover the outgo. What should you do?
Easier said then done. I know. However, better decisions are made when you can calmly assess your situation and set priorities. As much as the Debt Free Divas urge you to budget and pay your bills (at least the minimum) on time, we acknowledge that no one can squeeze blood from a turnip.
If you have more expenses than income, break your situation into the following manageable parts:
- Prioritize necessities. Make sure you can cover housing, food, transportation, and utilities. At this point, good credit is a lower priority so you’ll have to ignore all other requests until you’re in a better position. Re-evaluate necessities to ensure those expenses are reasonable. You may need a car; you don’t need a Lexus rx 450h.
- Create a budget. Obviously, this step is vital to any household’s financial success. However, when money is tight, a monthly budget highlights exactly how much excess you have to commit to bill payment and debt elimination. In this situation, every little bit can make all the difference.
- Cut expenses. With your financial life in black and white, look for opportunities to reduce your outflow. Be creative and remember these cutbacks are temporary.
- Plan for success. Develop a strategy for improving your financial condition. Do you need help developing that strategy? Contact the Debt Free Divas.
- Increase your income. Additional dollars can help you attack any outstanding bills and regain control of your financial life. If your schedule permits, consider these ideas to add income and alleviate your income deficiency.
Too little income to cover expenses is never comfortable. Don’t allow bill collectors to set your financial priorities. Step back and reasonably evaluate your options; making the best decisions for your household. The above steps can help you take control of an otherwise stressful situation.