Not enough money? What to do

 

Times are hard for many households. The loss of a job, high cost of groceries, energy and other services, can lead to times when your budget is really tight. There are a few tips you can use to get more breathing room.

Cut the fat

We all have things we can’t live without. A roof, food, heating, clothing… But other things that aren’t necessary need to go if you are struggling to make ends meet. Cable TV, magazine subscriptions, gym memberships come to mind. Try to make a list of your daily expenses for a month or two, and review them. You might be amazed at how much you spend on dining out, gas for your car and other little pleasures. There is unfortunately no room for them anymore.

If you buy lunch at work every day for $10, 20 days per month, you are spending $2,400 per year on lunches only. I try to limit food waste in my house as much as possible, and the previous day’s dinner is recycled into lunch for the next day. If you had steak or chicken breast, make a sandwich. Bringing a Tupperware with pasta or a salad to work will only cost you a dollar or two.

Can you walk, cycle or carpool to work? It would save a lot in gas and car maintenance. Turn off the lights when you are not in the room, the tap when you are brushing your teeth and reduce your utility bills. Still not enough? Consider your housing costs. If you have one or more empty rooms in the house it may be time to move to a smaller, more affordable house.

Reduce your debt payments

Another item that takes a big part in your budget are debt payments. You can look into a debt management plan to reduce your monthly debt payments. The principle is straightforward. One company buys your debt from different creditors and bundles all your loans and consumer debt together to come out with a cheaper monthly payment. Make sure the interest rate on this new plan is cheaper than the average weighted interest rate on your debt.

If you have one debt for $1,000 at 10% and one debt for $500 at 12%, your average weighted interest rate is not 11%, it is 10.6% because you have more debt at 10% than you have at 12%. Calculate this average weighted interest rate with the amount owed on each debt and determine if the rate on the debt management plan is better.

If you can, try to make the same payments you made before. Since the interest rate is lower, you will get rid of your debt much faster.

Learn to do without

There are a few things that I don’t pay for. And so can you. The library can provide books, DVD and even free classes for self improvement. You can barter your skills if you know how to fix a leak for the skills of a neighbor that knows how to fix your computer.

The Internet is a wonderful source of learning and you can check a Youtube tutorial to learn how to perform the oil change on your car or a website to learn a new language.

Plant a garden so you have fresh vegetables and fruits during the summer.

When you go out, do without a second round of drinks or desert.

Wake up five minutes earlier so you have time to make coffee and not buy it on your way to work.

All those little things won’t make you rich but will certainly save you money if you need to reduce your monthly budget.