Many people believe that there is no way to stick to a budget because they are too poor. The numbers don’t add up, and on paper – they show in red no matter how much you cut back. In these cases, it can be daunting and frustrating to try to budget, because it seems there is no way to fix things. But in reality, these are the times when it is essential to budget and track your money.
Prioritizing Spending
A budget can help you prioritize your spending when you don’t have enough money to pay all your bills. It can help you avoid running out of money before the end of the month. When times are tight, it is important to keep your priorities in mind. The essentials are having a roof over your head, food to eat, and basic services like water and electricity. The next priority should be your means of transportation to work. Depending on where you live, that could mean a car, a bus ticket, or a bike.
Think about how you can be as frugal as possible with housing, food, and transportation while you work on organizing your budget.
Knowing Where to Cut
A budget can also show you the areas where you can really cut back. If you write down everything you spend, you might be surprised by where and how some costs stack up every day. Even though you might think you’re only spending money on necessities, a budget can reveal many small, unnecessary expenses that add up each month.
A Budget is a Concrete Reality
Sometimes, a budget shows you that your problem isn’t spending – it’s income. It’s helpful to have a specific amount in mind when considering taking on a second job, looking for a new job, or asking for a raise. Creating a budget will clearly show you exactly what you need to bring in every month to meet your needs, so you can determine the best course of action.
For instance, if you are short by $100-200 a month, working a part-time job a few nights a week may be enough to solve your problem. However, if you are short by $1000 a month, you may need to take more drastic measures. This might mean working overtime or looking for a new job that pays more.
A Budget Gives You a Spending Plan
A budget is essentially a spending plan. Even when you feel you are too poor to budget, it is important to have a solid plan in place. If you feel like you should be able to meet your needs but things don’t add up on paper, it might help to have someone else take a look at your expenses and give suggestions on things you can cut back on. They can’t provide real suggestions if they don’t have any idea how you’re actually spending your money.
Working Towards a Better Situation
If your income is below the poverty level, you may be struggling to cover your basic expenses without any extras at all. It can be very frustrating because you might be working multiple jobs and still can’t meet your needs. When you are in this situation, you should look at every expense you have and make sure it is as low as possible.
Instead of renting your own apartment, consider living with a roommate. Sell your current car and use the cash to buy an older car that will help you get around. Living frugally in this situation is not a choice, and it may take you several years after improving your income situation to fully recover. If you can limit the amount you borrow and avoid using credit cards altogether, you can give yourself a little breathing room to work toward earning more income. Even though you are struggling and facing poverty, you can make progress.
Source:
https://www.thebalancemoney.com/budgeting-tips-when-money-is-tight-2385681
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