If you’re like me, you’ve been through months where you honestly wonder how you will ever have enough money to pay all your bills. Maybe you’ve been through several months like this. Maybe for you, this is a way of life. The economic realities of the last few years have touched all of us in one way or another, and some of us more so than others.
The answers to these questions are never simple, but there are some steps you can take to stop the bleeding. First, print out your last couple of bank statements. What you want to do is go transaction by transaction and put everything into one of two categories: necessities (rent, utilities, phone etc.) and everything else. Everybody’s situation is different, but more than likely you will discover that you have been spending more on certain things than you realized. I discovered that I was spending close to $70 a month buying snacks at work. Seemingly insignificant purchases that you don’t think about can accumulate and drain a lot more of your money than you realize. Having the information in front of you on a regular basis will cause you to be a lot more intentional about every purchase you make, and the result will be smarter economic decisions.
One monthly expense that I did not include among the necessity category is cable. Again, everybody’s situation is different, and it’s not my place to tell you that you need to cancel your cable. What I would suggest is that you ask yourself where cable falls in your priorities. How often do you watch television? What channels do you watch? Do you watch it often enough to justify spending $60 to $70 a month on it? With the availability of streaming services such as Netflix and Hulu, a lot of people are cutting cable and not missing it. Another entertainment item that can drain the bank account is eating out. A function of our fast-paced society wherein people often work long and unconventional hours is that people eat out often for the convenience of it. Again, it is not my place to tell each person whether or not they should eat out. What I can tell you is that my wife and I once challenged ourselves to go a month without eating out, and the savings from doing so were evident. We still eat out occasionally, but not as often as we once did. Determining how much to spend on entertainment can be tricky. Things that we like and enjoy have a funny way of going from luxuries to necessities in our heads. What I believe you will find is that if you learn to prioritize and downgrade in other areas you may have enough for some of the “necessities” that you enjoy.
These tips will not in and of themselves solve all of your economic problems. Many of you are dealing with serious economic catastrophe that goes beyond basic budgeting problems. But whether your economic situation is dire or just in need of some guidance, you have to start somewhere. I sincerely hope that these tips give you the hope and confidence that your economic picture can and will improve.