I believe everyone has that “Oh my God, I’m an adult and I still can’t do this!” moment. Lately, when it comes to budgeting and getting ourselves out of financial pinches, we all seem to act like children. The most glaring problem is that we don’t look to the future anymore. My generation, the millennial, had parents who lived on debt and thought nothing of it until they went to retire and found nothing in the bag. This was not the best example of responsibility in finances. Likewise, uncontrolled spending and incomes that don’t keep up with inflation are so much the norm now that I’m surprised riding the debt wave hasn’t become an Olympic sport yet. All of these social problems aside though, there can be a light at the end of the tunnel if you can get motivated to inform yourself about reality. Congratulations, you’ve taken the first step.
The second step depends very largely on your individual situation. If you are employed but the income doesn’t match the outgoing expenses then you need to start with a building a budget. This is really simple, get some paper, a pencil and your previous month’s bank statement, a calculator may come in handy as well. From the first of the month to the last categorize everything you’ve purchased like; groceries, gas, utilities, etc. Add up each category to get a picture of where your money goes each month. From these lists you will start to see places where your money is leaking.
If your utility bills are huge, consider turning off more lights and making sure you aren’t throwing your money away on unnecessarily over cooling or heating your home. If you see that your dining out and entertainment categories are out of hand, cut back. Set aside a small amount of cash for these and once that has been spent, you don’t get to play anymore. If your grocery bill is huge, consider coupons, switching to generic brands, shop in bulk if you can without wasting and plan your meals a week in advance so you can build a comprehensive list. Stick to the list, impulse buys are the bane of any budget, besides; they aren’t usually the healthiest items for the waist line either.
If you have had a job loss, a death in the family or a medical emergency that have forced you to stop working for a while, thus cutting your income, then a budget will be necessary but probably not enough. If you can’t work, go to the unemployment office and social welfare office and see if there is some form of government assistance that you qualify for. This is a big hit to the pride but we have these social programs for a reason. We all pay taxes for social welfare because disasters can happen to anyone.
Do what you can to get yourself back to work but in the mean time there may be some programs from the utility companies and mortgage companies that will allow you to keep your lights on, a roof over your head and get you some breathing room. One easy way to find out if you qualify for these programs is to call up your utility and mortgage customer service representatives. In most cases there will be paper work and proof that you are in need in the form of unemployment stubs or government assistance that you will be required to fill out and these programs might have a limit to how long you can be on them but it will give you some time to get yourself back on track. If even one of your bills is put on hold like this it would be worth the effort.
Credit card bills can be a bit tricky. For those still working or earning some income, try the debt snowball method where you pay the minimums on all your cards except the one with the smallest balance. Pay all your extra money to this card until it is paid off. Then start on the next card. Alternatively, starts paying down the card with the highest interest first to keep from having interest build while you pay the other card down.
For those who can’t work or have lost their income for there are some cards that offer job loss or medical emergency insurance that you pay a fee for based on your balance, usually about a dollar per $100 worth of balance. This insurance might pay the minimum payments for you if the underwriting insurance company agrees that you qualify (which can be a big if, especially if you don’t have a perfect payment history first).
This insurance is usually something that people either turn down when signing up for the card because they don’t understand what it is, or they inadvertently sign up without realizing it. If you don’t know if you have it, take a look at your bill, if you see a charge on your bill under fees that doesn’t look like a late fee or an annual fee it might be this insurance. Again, call up the customer service representatives or go to their on-line site to make a claim. Do not wait to make a claim, do it as soon as you are laid off or as soon as your income source has been lost. Often if you continue to make payments even though you’ve been unemployed the insurer will not approve the claim.
Another action to take is to realize that some of your bills are not really all that “necessary”. This is something we could all take to heart. Get your financial priorities straight. You don’t need that new car if the one you have works and is paid off. You don’t need 150 cable channels, an HD antenna costs about $35 and T. V. rots your brain anyway. We all assume that we need our cell phones and our internet to stay on, especially when we are looking for a job but the truth is; the regular phone company will hook up a land line at just about any address for a basic fee of about $25 dollars, sometimes less. Like-wise we can all log onto the internet at our local library and all labor department offices will give you access to e-mail so you can send our applications and resumes, for free. Alternatively, if you have a smart phone with 4G internet that can act as a hotspot, pay that bill if you can and turn off your home internet.
Lastly, once you do get yourself back on your feet and back on track, keep practicing a budget and start yourself a savings account that will keep you afloat for at least six months if the unexpected happens yet again. We can’t always anticipate the bad things before they happen but we can mentally and physically prepare ourselves so that we don’t backslide. Fortune favors the prepared.