If you’re consistently struggling to make ends meet by the end of the month, you may be facing a range of issues. It can be frustrating to feel trapped in a financial situation with no way out. You might believe you’re earning a decent amount of money, but you may find it difficult every month. You could be overspending, or perhaps you’re not earning enough money, or maybe both.
1. You use credit cards every month
One of the biggest signs of an income problem is using credit cards at the end of the month to cover all your expenses. If you run out of money during the month, or if you’re using credit cards to help manage things between paychecks, you’re likely facing an income issue. At first, this may not seem like a big problem, but as your outstanding balance increases and your credit card payment rises, the situation will worsen.
Solution: Stop using credit cards
It may seem tough to stop using credit cards when you feel you don’t have enough to cover basic needs. However, switching to cash for everyday purchases can help you limit your spending.
2. You can’t cover your bills
If you’re choosing which bills to pay each month, you are definitely facing an income crisis. It’s important to take action regarding this situation as soon as possible. Look for ways to reduce your bills, such as moving to a less expensive rental area or selling your car.
Solution: Downsize your lifestyle
Downsizing your lifestyle means cutting down on luxury by half. This could mean reducing your mobile phone plan to the minimum and canceling cable TV. Instead of dining out, cook at home and stick to a tight grocery budget. Watching a movie at home instead of going to the theater could be the solution. You can enjoy life on a limited budget, but you need to be careful about how you spend your money.
3. You run out of money at the start of the month
It’s normal to have a bad month every now and then. However, if you find it difficult to cover the end of the month after the fifth, you are likely experiencing an income crisis. This clearly indicates that overspending may not be the issue. If you can barely pay your essential bills, you’re not earning enough money. You may feel like your paycheck is spent before you even receive it.
Getting a new job might be the best way to increase your income. However, working a side job or taking on side projects can help you pay off debt and build an emergency fund so you can do more than just survive. If this problem persists for an extended period, you may want to consider going back to school to qualify for a higher-paying job.
4. There is nothing else to cut
When you look at your budget to find extra money, you can’t find anything else to cut. You’re already living without cable TV, you don’t have a gym membership, and you never eat out. If you’ve cut everything you can, yet still can’t make ends meet by the end of the month, you have a serious income problem.
Solution: Create a bare-bones budget
A bare-bones budget goes beyond trimming lifestyle patterns. It means you’re only spending on necessities and completely stopping spending on luxuries. This means instead of buying steak at the grocery store, you opt for ground beef. It means no dining out and that you don’t buy anything new unless you absolutely need it, no matter how good the deal is. Generally, this is a short-term budget that can help you get through the situation until you take action to improve your circumstances.
5.
You Can’t Handle an Emergency
When you’re financially tight every month, it’s hard to set aside money for an emergency fund. But this leads to a cascading effect. If you can’t handle an emergency, you may end up resorting to your credit cards. Eventually, your credit card payments will grow enough to further disrupt you. If you don’t have any extra money to save for an emergency fund each month, even when you’ve cut back on expenses, you’re not earning enough money.
Solution: Set Up an Emergency Fund
It may seem strange to set aside a certain amount of money each month if you’re struggling to make ends meet, but having money to cover emergencies can bring peace of mind and allow you to focus on other goals and issues. You can start with a small additional amount like $50 extra in each paycheck and gradually increase it. Aim to have between $1,000 and the equivalent of one month’s income in your emergency fund.
6. You’re Constantly Worried About Money
There’s a difference between worrying about how to pay for unexpected car repairs and feeling intense anxiety thinking about paying grocery bills or covering rent. If constant worry about money keeps you awake at night, you’re likely not earning enough money. Use some of that anxiety to start devising a plan that will turn your situation around.
Solution: Stop Handling Your Finances in Crisis Mode
Budgeting allows you to plan your purchases in advance. An emergency fund lets you cover unexpected expenses. Increasing your income creates more flexibility in your budget. If you’re bouncing from one financial crisis to another, you’re not making progress toward your goals. Using these tools will actually make it possible to create and stick to a financial plan.
7. You’re Not Achieving Your Financial Goals
If you’re barely staying afloat and not making any progress in paying off your debts or saving money, you’re probably not earning enough money. This issue may not be as severe as the other signs mentioned above, but it’s enough to make you want to take steps to change your current situation. You should address this before it becomes a more permanent problem.
Solution: Ensure Your Goals Are Achievable
Setting a goal to completely eliminate debt in a year is a great goal, but if you have nearly $30,000 in debt and only earn $40,000, that may be impossible. Make sure the goals you set are realistic and specific. It might be about paying off one credit card by the end of the year, or it could be about sticking to your budget while working on paying down your debt. You can start making real changes to your financial situation step by step.
Frequently Asked Questions
Should I tell my boss that I’m not earning enough money?
Before you ask for a raise, do some salary research to find out what people in your field are earning in your area. If you find that your salary lags behind the earnings range for others in your field, you may be able to use that information to request a raise.
What if I don’t earn enough money to cover all my credit card bills?
You might consider getting a low-interest debt consolidation loan or a balance transfer credit card with low or no interest for a specific period. This can help reduce your payments to a manageable level, but it only works if you don’t pile on more debt.
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Source: https://www.thebalancemoney.com/signs-you-dont-make-enough-money-2385518
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