Breaking even where your budget is concerned is one thing, but what happens if each month your expenses seem to be totalling more than your income? If you are going further and further into debt each month, there’s only so long you can financially sustain this downward trend before drastic measures need to be taken. But what can you do to balance things back out? How do you prevent adding to your debt?
Well the good news is that there are a variety of steps you can take immediately that will stop the bleeding, and help you to bounce back, balance your budget, and then allow you to start paying off the debt that has accumulated. Here we’ll take a look at six steps that can act as a great starting point.
The most obvious tip just so happens to be one of the most logical as well. If you aren’t making enough money to pay your bills each month, then making more money can solve the problem. This could mean finding a new job, asking for a raise, applying for a job promotion, or doing some work on the side to provide you with a supplemental income. If your goal is to find a new job that pays more but you find yourself “stuck” where you are, it can help to do some networking, update your CV to ensure it is eye-catching and up-to-date, and start applying for roles that both fit your skillset and pay well.
One big expense that people often have is their car and car insurance payment. These two items alone could be what is putting you over the edge and into the red. It may be wise to downsize your car and trade it in for something smaller, more affordable, and more fuel-efficient. But even if you stick with the same car, you can shop around for a more competitive car insurance quote when you head over to Quotezone. The comparison site allows you to get a list of quotes from top car insurance providers, which is perfect for those looking to find cheaper insurance.
Another area you can downsize is your home. Sometimes that doesn’t actually mean looking for a smaller home, rather it means moving outside a city-centre or to a less expensive neighbourhood. Ideally, your rent or mortgage shouldn’t be more than 30% of your monthly income. If it is any higher than 30%, it’ll make it rather difficult to pay all the rest of the expenses.
Now is also the time to get cutthroat with your budget and look for areas you can save money. Keep in mind each individual area doesn’t have to equate to much – it’s more about cuts across the board and how much of an impact they will have. Some of the best ways to cut back on what you’re spending is to slash your clothing, entertainment, dining out, and miscellaneous spending. Even the grocery bill offers room for savings, as you can start buying items in-season, looking for dishes that stretch your ingredients further, and purchase only what you will eat and need that week.
If you have a lot of debt owed to various creditors, you may also want to think about credit consolidation. This combines all your credit lines into one single debt, which can sometimes reduce the interest rate you have to pay. If you’re unsure of whether or not this could help you, make an appointment with a financial advisor at your bank and have them give you some advice.
Finally, you want to be sure that you are finding a way to pay all your bills on time each and every month. Late payments or missed payments will only result in a late fee charge and interest, which just adds to your growing pile of debt. If you have a hard time organising your bills and making sure things are paid on time each month, then a personal budgeting app complete with bill reminder tools could be of use.
By using all of these tips and making some really drastic and often cutthroat decisions, you’ll be able to ease yourself out of the red and into the black where your finances are concerned. Once you are able to get a handle on your debt, and your expenses no longer exceed your income, it’s also wise to start putting money aside for those “just in case” times.
How do you balance your budget? Do you try and follow a strict budget?
*This is a guest post