How to budget when you don’t earn enough money

How to budget when you don't earn enough money


Despite our best intentions, life doesn’t always go as planned.  Sickness happens, jobs can be lost and relationships can break down, putting us in tricky financial situations.  If you ever find yourself in a tough spot, you might be wondering how to budget when you don’t earn enough money, after all you till need to eat and pay bills.  Don’t think just because your income has reduced you don’t need a budget, this is the time you need one the most!  The following tips will help you make it through these (hopefully temporary) tough times.


Know that it’s temporary

Before you get to work on sorting out your budget, keep in mind that it is temporary.  While you might have to cut back on expenses that you would rather not, a little short term pain is going to help you in the long term, after all the last thing you want after going through a financially touch patch is to come out the other end with a huge debt because you weren’t willing to temporarily cut back on a few expenses.


Keep a positive mindset

While it’s hard, the best thing you can do is keep a positive mindset.  Negative self-talk will not get you anywhere, so keep telling yourself things will get better, and you will work your way into a better place!


Cut your expenses

It’s time to cut any unnecessary expenses, no matter how big or small, it’s all going to help.  Cut your pay tv, newspaper and magazine subscriptions, eating out, basically anything you can survive without.  There is not much point continuously paying for pay tv if you can’t even pay your utility bills.


Likewise, go through all of those important expenses as see if you can cut them in any way.  Do some online insurance quote and see if you can get a better deal elsewhere, and get on the phone to your utility providers, such as phone and electricity, and ask if they can put you on a better plan.



Find more money

Do whatever you can to find more money to boost your income.  Work more overtime if you can in your current position, or take on a second job.  Put some time aside to have a clean out at home and sell anything you no longer want or need.  You might only make a few hundred dollars, but that’s a few hundred more than you had before, and every dollar counts.


Prioritise your bills

Once you have reduced your expenses as much as possible, you need to prioritise your bills in order from most important to least.  The highest priority bills will be paid first, working down the list as you free up more money.  The most important thing is to get in contact with all providers and let them know your situation.  Be sure to do this as soon as you become unsure that you will be able to pay your bills, as companies will be more likely to help out before payments start to fall behind.  You may be offered a payment plan, which could help with any large bills that would have otherwise been due in one hit.


If you feel as though your finances are getting out of hand and you need some extra, outside help, get in touch with a free financial counsellor before you resort to payday loans or companies that manage your money for you, taking a large cut of your income in the process.



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