The Struggle Is Real

It can be depressing and frightening to realize that you do not make enough money to cover your monthly expenses. This can happen, especially if you have overextended yourself with debt. It can be even worse if you are being paid with a prepaid debit card with hidden fees. There are many signs that you need to earn more money. This situation requires immediate action, and you should do all that you can to turn the situation around as quickly as possible. Managing an irregular incomecan make it harder to recover from this situation. You should take a five-step approach to solving​ the problem and be working on these areas at the same time. This can help you break free from the financial rut and move out of survival mode, so you can be successful with your finances.

    • 01

       Reduce Your Expenses

      Paying bills

      First, you need to find ways to reduce your expenses. There is almost always at least one more area that you can cut back in. You may need to find a roommate to share your apartment or find a way to carpool to work. You can cut back on your food budget or keep the heat turned down. These smaller things can help to reduce your expenses. You can also look for ways to save on rent. You need to stop spending money on things that are not necessities. This would include new clothes, eating out, or vacations. You should also avoid rent-to-own stores and other things that require monthly payments. Stop using your credit cards as well. They will only make the situation worse. Look at your bills and determine if you can’t afford your car paymentor if your rent is too high and then do the things you need to in order to lower the payments. Another option is to shop around for a cell phone plan since every little bit will help.

    • 02

       Find Additional Income

      Second, you need to find an additional source of income or a new job. This may mean that you take on an additional part-time job. You may be able to pick up extra hours at work. You may decide to sell some things to help pay off some debt. The second job or additional income may only be necessary until you are able to meet all of your needs on your original source of income. This can help you to be motivated to work harder and to pick up extra hours so that you can quit sooner. For example, if you need the extra money to cover debt from a medical emergency, you can deal with the problem, and then quit your job. A second job is not a long-term solution to your problem. You should also ask for a raise at your current job. This may be enough so that you can stay there for a few more years.

    • 03

       Find a Long Term Solution

      Third, you need to look for a long-term solution. This may mean that you need to receive further education or certification for your line of work or it may mean that you need an entire career change. If you have not attended college, you may consider doing this as it really does increase your earning power. As you consider these options, be sure that you choose something that you could enjoy doing that is practical as well. You want to be able to benefit from the extra education in a practical sense as well. If you are in this position because you are in an entry level position, and do not make as much as you thought you would, you need to create a plan that will help you get by until you get a raise. If you find that you make decent money, but still struggle, you may need to get more serious about budgeting. You may make enough that once you pay off your debt, you will be fine.

  • 04

     Work With Your Creditors

    Fourth, contact your creditors and see if you qualify for a reduced payment or forbearance of some kind. Student loans will offer forbearance if you can prove economic hardship. Credit card companies can temporarily reduce interest rates or reduce the amount you owe each month, though they may require you stop using the credit card.

  • 05

     Remember Your Priorities

    Fifth, it is important that you cover your basic needs before you pay your creditors. This means that you have enough food to eat, a roof over your head and your utilities are on, then you pay your bills, and then you have fun. This order of priorities is essential if you are going to survive the next few months and come out ahead. Remembering your priorities throughout the month will prevent you from running short on cash towards the end of the month. Your budget and your priorities will help you manage your cash flow more effectively. This can help you deal with fluctuating bills. You can also use these strategies to cope with being broke. You cannot operate without any savings, so be sure to include that with your plan.As you move forward,remember what you learned about your finances as you changed your financial picture.

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