Like any huge emergency, this year probably blew your budget right out of the water, and you had to scramble to make ends meet. In fact, you might’ve scrapped your budget altogether because what used to work simply didn’t work anymore and still doesn’t. But just because your circumstances change doesn’t mean you abandon your money plan. You need to retool it to match your current financial position and adjust it as necessary, with your eye on the future.
It’s true you can’t prepare your budget for everything life throws your way, but you can lessen the blows by accepting that a budget is fluid and changing it with the tides.
Looking At Your Budget
If you already have a budget, it’s time to revisit the numbers and adjust them to your current financial state. Keep in mind; you should change your financial plan every few months to keep it relevant and working at an optimal level for you and your family. On the other hand, if you don’t have a budget at all, now is the time to create one. No matter how much or how little money you have, working from a personal budget is the only reasonable way to track your cash and make the most of your cash flow.
You could use a paper budget, but a spreadsheet allows for easy adjustments and calculations, so playing with the numbers is a lot more efficient on a computer.
Adjusting Your Income
The first thing you want to do with your budget is to look at your income and adjust it to what you currently bring into the home. If your income includes unemployment protections you’ll lose at the end of the year, take those out now, so you’re prepared to live without those funds.
Is your income more than your expenses? If not, you’re probably using credit cards or other loans to make ends meet, but this way of living is not sustainable. Not only that, but the amount of debt you’ll accumulate by doing so will keep you in a debt cycle that is hard to escape.
Instead, add to your income by getting a second job, moving into a better paying position in your current job, or switching careers altogether. If you can’t increase your income right now, there is another option — your expenses.
Decreasing Your Expenses
Look at each expense in your budget and decide if that service is essential. If it’s not, then consider getting rid of that cost or adjusting your service to a lower tier to save money. Remember, it doesn’t have to be permanent, but it can help bridge the gap between your income and expenses in the short term.
You could also contact your creditors and see if they are willing to lower your bill. Some companies will work with you to save money and keep you as a customer, so it’s worth a phone call.
One expense that you must eliminate in order to see your wealth grow and free up money for more productive purposes is credit card debts. When you make minimum payments on your credit cards, most of that amount goes to interest and barely skims your bottom line. Instead of making multiple payments to various companies, a smart thing to do is to use a debt consolidation loan.
Consolidate and Eliminate
Johnson Funding can help you take your outstanding credit card debts and roll them into one personal loan with a single payment and interest rate. You’ll probably pay less each month than you are now, and it will open up money in your budget that you could use to save, invest, or pay down your debt quicker.
Above all, a consolidation loan gives you a clear path to living debt-free, as long as you don’t continue to use your credit cards. Plus, it will help you keep your budget in line with where it’s supposed to be.