How to manage your budget?

Budget is most important factor. And there are countless stories of people experiencing financial hardships and ending up in a rough place, financially speaking. It could be anything. A loss of a job, medical bills, cut hours at work, etc. What happens is that people who were previously just managing their budgets are now very much unable to do so due to a sudden decrease in income or a sudden increase in expenses.If you end up in a situation like this, the first step is to try to revamp your budget based on your new income and expenses. Basically, you need to minimize your financial damage as much as possible while you get yourself back on your feet. This may result in some credit damage but if you have a plan and some decent budget tips, it can really help you turn things around.

One of the most important things to do (and I’ve talked about this before) with budget is to prioritize your expenses. I know I’ve gone over this in detail not too long ago, so I’ll just quickly touch on the basics. When prioritizing bills, you’re considering two things. What you need for survival and what bills are secured (i.e have an asset attached that can be seized on non-payment). To survive, you need somewhere to live, you need utilities, you need food and possibly a car, depending on where you work and what your job is. Most of these things (apart from food) are also secured by assets. Pay these bills, if your house/car/electricity, etc is taken away, you’re going to be in an even worse place. If there is a way to reduce your budgets, that’s also an option to consider. For instance, you could downsize your living situation or find somewhere with cheaper rent, you could take public transit instead of driving everywhere (leaving the car for necessities but saving gas money), all kinds of things.

After you’ve prioritized, look at what you’re spending on things that aren’t necessary and either cut them out or reduce them. That manage your budget. And things like your cable can be downsized or even eradicated without having a significant impact on your survival. As can little luxuries like eating out, going to movies, alcohol, etc. Try to look at everything with the view of ‘do I need this to survive?.’ If you don’t, put it on a list of things that you can cut. We tend to think of a lot of things as ‘needs’ these days. For instance ‘needing’ the latest smartphone and paying a high monthly fee in order to have this or ‘needing’ television or the internet. In fact, utilizing the internet can actually help you perform the functions of both cell phones and television. You can send SMS messages or make phone calls using the internet and you can watch TV on the internet as well, often for free or a lot cheaper than a cable subscription. If you don’t need to be able to scan Twitter or Facebook while in line at the grocery store, consider downsizing to a really basic phone on a basic prepaid plan (for emergencies) and wean yourself off the things that are not necessary to your survival.
Talking to your creditors is something else that can help. Often, if you explain your situation, they will give you extensions on your payments. In addition, you can ask to have interest rates and certain fees reduced; often, all it takes is just for you to ask. This can cut you some much-needed slack when it comes to making your necessary payments.

Consider looking at different ways to add to your income – you can sell items that you don’t need anymore; such as games consoles or that smartphone, you can do odd jobs around your community, you can take a part-time job to get you through a rough patch or you can even do things like sell your plasma or semen (if you’re a guy) in order to earn some extra bucks. The latter is something that students often do in order to help supplement their incomes while they study. Basically, take a look around and see what opportunities might be available in order to help you get as much cash together as possible.

Finally, look at what your community can give back to you – most communities have soup kitchens, thrift stores, food pantries, etc to help the disadvantaged. Use coupons in those leaflets everyone ignores to save money on certain food items and shop at discount retailers for those ‘necessity items’. If you make yourself a budget and a plan, you can often find that the means are all around you in terms of being able to reduce your outgoing expenses and this can ultimately help you manage your budget better and swing yourself back up onto your feet.
If you’re in a position where things have gone too far and these tips aren’t enough to dig you out of your hole, there are still other debt relief options – debt negotiation is one of these options and, if your interest is getting rid of your debt for less than you owe, as well as damaging your credit rating for the least amount of time, it could be exactly what you need. Debt negotiation basically involves you detouring your unsecured bill payments into a lump sum fund, aiming to save a certain amount of money (usually about half of what you owe). Debt negotiators will speak to your creditors and get them to accept this lump sum as payment in full. After this, your debt is considered cleared and, although your credit will be damaged, it won’t be damaged for as long as any other debt relief option, allowing you to climb out of that hole as quickly and efficiently as possible.