Home Budgeting How To Manage Your Money When You Are Broke

How To Manage Your Money When You Are Broke

by Tara Robinson

Budgeting money is rarely easy, but it’s especially difficult when you don’t have enough of it to even pay all of your bills. You might be between jobs or simply have a job that doesn’t pay well enough to address all of your expenses. Either way, it’s important to change how you spend your money when you’re so short on funds.

Follow these steps to learn more about how to save money when you are broke.

Be Proactive 🏃

Don’t wait until the collection agencies begin calling. They tend to be relentless and are not known for being considerate. They only get paid only when you pay, so you can see their priorities.

Call your creditors as soon as you see that you can’t make a payment. You might be able to work out some sort of an extension or get reduced payments for a while.

Cut Back On Your Savings Plan 📅

This could be the only time to stop saving part of your paycheck. The risk and repercussions of not paying your bills may be too high to cut yourself any shorter to account for your savings.

You’ve always heard to pay yourself first, but sometimes that’s not appropriate.

Prioritize 👁️

Life is all about priorities. Look at how much money you have available and then prioritize your bills accordingly. Your mortgage, insurance, food and basic utilities normally come first. Credit cards are usually the last ones.

Consider the ramifications of not paying any bills and make a decision.

Do this step after you’ve contacted your creditors. Your decisions may be different, depending on their reactions. Now is the time to cut all your unnecessary costs mercilessly. Austerity has its time and place, and now is the time.

Avoid Relying On Credit 💳

If cash is short, it is common practice to start using credit cards to cover for a paycheck. The cost of this money may be extremely high, so it is difficult to remove this debt later on. Don’t fall into the trap of viewing credit as a viable solution.

Consider how much you’re normally able to save and then project how long it would take to pay off this new debt. You already have more debt than you can handle. It doesn’t make sense to add even more to the equation.

Create More Income 💵

If you don’t have a job, take anything you can get for the time being. If you do have a job, consider adding a second job or getting some overtime. If you have stuff lying around the house that you don’t need, it might be wise to sell it.

The less you fall behind now, the easier it will be to catch up later.

Make A New Budget 📋

This might be the last thing you’re in the mood to do, but either your financial circumstances have changed or your current budget isn’t working. Both reasons suggest that a new budget is required. Take a look at your income and expenses and make some wise decisions. Remember, it’s all about saving money and smart prioritization.

Final Thoughts

In stressful times like these, it’s easy to succumb to your anxiety and not take action, but understand that this course of action will only make your challenges greater in the future. This, in turn, will teach you how to not be broke.

Take a deep breath and do everything you can to get yourself back on track financially. You’ll be surprised how much you can accomplish when you really focus your intention and energy on solutions.

Prioritize your bills, increase your income, and make a new budget. Things will be better before you know it.

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