How to Budget When There's Not Enough Money
The other day I was talking with my mother-in-law about the dreaded budgeting topic. She said she didn't bother budgeting because she already knows that she spends more money than she has. So apparently, if you're operating in the red then budgeting serves no purpose.
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Even if you have more bills than money available to pay them, the exercise of thoughtfully looking at what you have on hand and deciding BEFOREHAND what you will do with it is extremely important. Instead of throwing all efforts to the wind, simply look at your checking account balance and assign every one of those dollars a job. Give each dollar a purpose: mortgage, groceries, entertainment, etc. This conscientious decision making is key.
In the situation where there truly isn't enough money, you'll still be rattling off obligations and the money will have dried up. That doesn't mean the work done didn't produce any fruit! When you set priorities to your money, you're maximizing exactly what it will be doing and your dollars will stretch further. That's key in starting and learning how to budget.
The second step is to be certain you're recording every single penny that you spend. Realize that even if you're spending and driving a deficit, the task of recording your spending MANUALLY will mitigate the deficit-spending as much as possible. Your total deficit will be much lower as a result and you'll be in a better position than had you not done it at all.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In the end, planning ahead and recording the ongoing will help you budget effectively. Even if you're operating at a deficit, your losses will be mitigated through the use of these two budgeting tactics.
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Even if you have more bills than money available to pay them, the exercise of thoughtfully looking at what you have on hand and deciding BEFOREHAND what you will do with it is extremely important. Instead of throwing all efforts to the wind, simply look at your checking account balance and assign every one of those dollars a job. Give each dollar a purpose: mortgage, groceries, entertainment, etc. This conscientious decision making is key.
In the situation where there truly isn't enough money, you'll still be rattling off obligations and the money will have dried up. That doesn't mean the work done didn't produce any fruit! When you set priorities to your money, you're maximizing exactly what it will be doing and your dollars will stretch further. That's key in starting and learning how to budget.
The second step is to be certain you're recording every single penny that you spend. Realize that even if you're spending and driving a deficit, the task of recording your spending MANUALLY will mitigate the deficit-spending as much as possible. Your total deficit will be much lower as a result and you'll be in a better position than had you not done it at all.
The exercise of manual recording increases awareness and strengthens the psychological connection between you and your money. These days, every other interest out there wants you to spend your money without considering your own circumstances. This is hardly a way to budget! Record your spending and you'll become painfuly conscious of where you can shave spending.
In the end, planning ahead and recording the ongoing will help you budget effectively. Even if you're operating at a deficit, your losses will be mitigated through the use of these two budgeting tactics.
About the Author:
Jesse Mecham can show you how to budget with four simple rules of cash flow. His free course spells out personal budgeting for the layman so you'll be able to stick your budget for the long haul.
posted by Credit Counseling at
1:14 AM
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