When you’re already counting the pennies to pay for things like bills, insurance, and food every month, it can seem like budgeting is something that belongs in a world outside of yours. After all, how can you look for ways to cut back your spending, when you’re already stretching every dollar?
The truth is that although it can take some commitment, creativity and time, almost anyone can find some extra cash in their budget with the right strategy. All you need to do is figure out where to start. If you’re struggling to make ends meet, then you need to work even harder to find every penny in your income and make it count. Here are some tips to help.
1. Know Every Detail of Your Financial Situation
Budgeting when you’re broke means accounting for every penny, from the couple of cents you have left over when you finish topping up at the fuel pump, to the money you don’t spend by taking a packed lunch to work. The goal of a good budget is to make sure that you’ve got more money coming in than you have going out, so start by figuring out how much money you spend and earn each month.
Once you’ve got an overview of your financial situation, you can begin categorizing your expenses into a “needs” section, and a “wants” section. This might be hard to do at first, but it will help you to get your priorities in check.
2. Know Your Problem Areas
When you’re sat at your desk working through your incoming and outgoing expenses, you might begin to notice a couple of trends in your spending habits. Perhaps you’re great at sticking to the target you give yourself for grocery shopping each month, but when it comes to entertainment costs, you always go over the mark.
We all have our “trigger” areas when it comes to spending and knowing yours will help you to avoid unwanted temptation. Over time, the things that once convinced you to spend money that you didn’t have will lose their power over you. However, to begin with, you may just need to avoid those problem areas.
3. Look for Places to Cut Back
Budgeting isn’t just about crossing all of the “wants” off your lists of needs and wants and reaping the benefits. Although it would be great to eliminate all luxury spending, as you’d be able to reach your financial goals faster, you’ll also find that you’re more likely to fall off the wagon if you’re never doing anything fun with your money.
Look for places to cut back that don’t require you to get rid of everything that you enjoy. For instance, can you switch to a different cell phone provider? Would it be possible to consolidate some of your debts and find a better deal for your interest rates? You could even get rid of things you don’t use, like a home phone, or a gym membership.
4. Develop Frugal Habits
The chances are that if you’ve been struggling to make ends meet for some time now, you already have some frugal habits – like making sure that you check for voucher codes before you buy anything online, or clipping coupons for the grocery store. However, there are some other ways to cut back on costs that you may not have thought about too. For instance, can you learn how to fix problems yourself, rather than paying for someone else to do them? Painting and decorating jobs are easy to accomplish on your own most of the time.
Another idea is to look for ways that you can stretch your meals. Would bulk-buying certain foods like pasta, and finding ways to use them in creative meals help you to cut back on your monthly expenses?
5. Check Your Priorities
When it comes to adjusting their spending habits, a lot of people find themselves wondering whether they should focus on savings or debts first. Ultimately, the answer will depend on your situation. While it’s essential to get rid of debt so that you’re not paying interest, it’s helpful to have an emergency savings section in your bank that you can turn to when things go wrong.
Ask yourself which option is going to make you feel better in the long-term.
6. Take Advantage of Earning Opportunities
Finally, one of the easiest ways to get more out of your money when you’re broke is to look for additional ways to earn. You might be able to work a couple of extra hours on weekends or find a side job through the internet. Although these solutions aren’t available for everyone, it’s a good idea to keep your eyes open for anything you can do to make your life a little easier.