Working with a tight budget is a tough financial situation to be in. One wrong move and you can end up debt. This further complicates your budget as you try and stretch your income to get from one paycheck to another. If this is you, you are not alone. A lot of Americans are trying to make do with a shoestring budget.
In fact, a recent CareerBuilder study showed that about 78% of American consumers are trying to make do with a paycheck to paycheck budget. This is quite surprising with how reports have been coming in with how the economy is getting better. There are still a great number of consumers working with a very tight financial budget.
One reason for this could be the fact that CNBC reported how the cost of living is outpacing the increase in household income. It does not matter how big the income jumps year to year if the cost of living is still way out of reach for consumers. This could lead to uncontrolled borrowing just to cover all the expenses and eventually lead to debt.
If you are currently having a hard time making ends meet, here are a couple of things to consider to make your budget work.
Review your budget and adjust accordingly
It is important to follow your budget so you can stay on track. However, as you navigate through a tight budget, one of the primary things you need to look into is carefully assessing your present household budget. For one, it can help you understand your spending pattern. What this does is provide you better insight as you endeavor to make changes in the way you manage your funds.
As you do this, you can start making adjustments to your budget. The important takeaway from this is the fact that you are making informed decisions. You are not relying on hunches and impulsive decision-making. Doing so will only put you in a far worse situation than you already are.
Be creative in increasing your income
To start off, one of the biggest changes that you have to make is to look for ways to increase your income. This is something which a lot of people aspire to do. However, the challenge remains to be in the execution stage. It is a challenge for those that are already trying to hold onto a 9 to 5-day job.
However, if you are trying to work around a tight budget, you simply have to make it work. The most common scenario for a lot of people is taking on a second job. Oftentimes, these are the types that provide great tips. The problem is that these are labor-intensive types of job such as bartending or even waiting tables.
There are some people who choose to bank on their hobbies and interests in order to bring in some extra cash. These are called income-positive hobbies where they get to practice their skills and earn in the process. Some people bake food and sell them to family and friends. There are those that take photography gigs during weekends as well.
Look for ways to cut down on costs
Now that you have already started looking for ways to increase your income, it is a good idea to start lowering your expenses. There are times that this is even a lot easier to do than taking on a second job. However, the works well together especially if you are trying to manage a tight budget.
As you look at your budget, start to identify things you can do without. These are the unnecessary expenses you can take out of your budget. It can be that signature coffee multiple times in a day or take out food every single night. If you go deeper, you might find out that you are paying avoidable fees and charges on your credit card by simply sending the minimum amount. These are just some of the things that you can take out to free up more funds in your budget.
Explore changes in lifestyle to get through a tight budget
Cutting down costs is easier said than done and one thing that can help you is making some serious lifestyle changes. Just like the sample above, you could already be used to having coffee at various times of the day to keep you up. You do not have to give that up but try to find alternative ways around it to lower down your cost. For one, you can start brewing your own coffee at home in the morning before leaving for work. This can do wonders especially when you are on a tight budget.
For food, you can try to combine buying groceries in bulk and batch cooking at home. You just plan out your meals for the whole week and prepare them ahead of time. All that is left for you to do is heat them up or do some light cooking before your meal. This helps you save money from having to order take out every single day.
These might not look much but the idea here is consistency. You can do it a couple of times but making it a habit and incorporating the same in your lifestyle requires dedication. The more you do it, the easier it gets because you get used to it. As you cook, you might find out that you actually enjoy it. The same with making your own coffee, you get better doing it every day.
Stop comparing yourself with other people
You might not know it but one possible reason why you cannot seem to get ahead in terms of your finances is that you keep comparing yourself with other people. There is nothing wrong with having financial role models. However, when you start to try and live like them, you might start to have some problems. This will only further complicate your finances as you struggle with a tight budget.
Trying to keep up with the Joneses will only get you in hot water. As such, you need to make every effort in avoiding it. This is even one of the financial wisdom your children need to learn early on. You simply have to live according to your needs and not base your success against other people’s achievements. Not only will you put your finances in jeopardy, you could end up unhappy after a long time living someone else’s life.
Save up for an emergency
Even with a tight financial budget, you should never abandon saving up for your emergency fund. This is one of the most important decisions you will ever make. For one thing, having some reserve funds will help keep debt at bay. Once the unexpected happens, you will be forced to borrow or to use your credit cards if you do not have any amount saved up. This will further complicate your situation as you start operating in the red. Be sure to make an effort in saving up for your emergency fund.
It is tough to live day to day with a tight budget but it is not impossible if you start to look at a few financial adjustments. You just have to be consistent and make sure that you continue making improvements to get through and improve your current situation.