Are you struggling to keep up with your bills, are you living from one paycheck to the next, could you be having trouble managing your finances, are you trapped in debt, is your bank account always deprecated because each time you get cash in, the balance get wiped out by bills and recurring expenses?
As if just being broke isn’t enough, everything that can go wrong, goes wrong when your finances are in shambles. Shit definitely happens when you are broke-you lose your business clients, lose your job, all of a sudden your car gets broken down, you get unwell, your phone starts acting up and your laptop gets stolen. If you can ask, no-one wants to be broke. It is not a position we envy.
Being broke can be stressful and depressing but keep in mind that many of the best success stories start from struggle. What makes your situation different is whether you are willing to change or prolong your current financial shortcomings. You need to take charge and be in control even of the meager earnings and make the most of it. Whilst this can be challenging especially when faced with bills, mounting debt, the following tips can help you to manage your finances. You will be surprised how much you can accomplish.
Whatever you do Budget
Money can never be enough. However, how you manage, spend or invest it makes a huge difference and impact in your life. You don’t have to be a financial expert to understand the basics because they are that simple and never change much.
So why budget, who is it for and do you need it. Simply put, budgeting is a tool that can tell you where your money is going and perhaps anticipate and plan ahead. All you need is to know how much money spend and on what. You can go as skeletal or as detailed as you want. You need to prioritise your funds for those things that can never change (fixed costs) no matter what (your rent/mortgage, power, gas, groceries-these are the must haves). Once you have covered your basics, you can allocate a certain percentage to your savings and miscellaneous. Bear in mind that you can’t allocate funds in miscellaneous, until you have covered the basics. That is a disaster waiting to happen. You have to get the priorities right, how can you have money to spend on entertainment but not to pay bills.
Frankly, prioritisation provide guidance on how you can break your financial habits without sounding sanctimonious. We have all experienced some degree of poverty and we know how painful such situations are. If you look at it, even things we presume free have a costs element attached to it, there are also benefits to be considered.
Certainly when it comes to making some painful and uncomfortable decisions, you might need to forgo the so called comfort. You aren’t are entitled to reward yourself by blowing money and not set up a budget thinking that your expenses will be covered miraculously.
A budget is telling your money where to go, instead of wondering where it went. –John c. Maxell
Start tracking your spending
If you are not into budgeting, either because the word itself makes you uncomfortable or you feel you have a good grip on your money, you can still track your expenditure. You may be surprised where your cash goes when you track everything you spend on. Most of us have monthly expenses like rent, a mortgage, insurance, utilities, credits cards and food, so it will be more helpful to track the outgoings and be aware of what is being paid out.
Nowadays it is much easier to track your expenditure as you can do this with apps or websites. Ever heard of MINT? The app besides tracking your spending categorises your expenses. The great thing about categorisation is that you can separate your expenses into needs and wants helping you to prioritize your finances. At this point you can be honest with yourself-do I really need to cut back and on what- the coffees, the movies and the nights-out.
Having knowledge of where you spend your cash empowers you with the ability to manage your money. Knowing places you normally shop or things you get gives you an idea of where you can plug “leaks” in your budget. Taking such steps will never cost you a thing but on the contrary save you headaches, stress and likely issues such as bad credit scores, failure to pay bills and even evictions.
Why don’t you have a new attitude and declare that I will not spend unnecessary money under any circumstance. Money looks better in the bank than on your feet –Sophia Amorus
Getting short loan and Credit Cards
It is almost the case that when you are broke your mind get stressed as you try to stretch your finances. You might however worsen your situation or fall into a debt trap if you turn to credit cards, loansharks, payday loans or any such.
Remember, there is a very thin fine line on how helpful or horrendous credit and short term loans are. When you use credit cards properly you can reap other benefits including, making purchases for necessary goods, improving your credit score, racking up cash back points and protection against fraud.
Despite how easy it is to get a credit card, it’s also easy to get overwhelmed and end up owing way too much money. Ofcourse, the first time you approach credit card or payday loan companies, they will be glad to assist and offer you the cash you are after. They obviously prey on your vulnerabilities. Yes, you need the cash, perhaps you need to top up and pay your rent, electric, gas and see yourself through the month. I get it and understand-however it is the repayment that will send you into a downward spiral. You become trapped that even the interest rates take your longer to pay. You have now added another bill, this time a very expensive one, the one that if you miss paying, will continue accumulating. That is an unwise move!!! Where finances are pressing, it is much better to even review your expenditure, approach trusted family or friends but if you must, avoid the loan sharks or payday loans.
When you think about it, do you really need to have a credit card—have you checked the finer details, the interest rates that you are likely to rake up. Paying interest rate on stuff you really don’t need is a tragic waste of money. The short and long of it is don’t get yourself a credit card and short loans that you can’t afford.
You Spend More Money Than You Make
One of the root causes of being broke is that people tend to spend more than they earn. You may try to justify certain purchases, rationalizing that you “need” it or that life will be too uncomfortable without it. But, more often than not, you’ll be just fine without those extra purchases. Having a champagne life on a lemonade budget will not cut it—it will throw you off balance.
So how do you tackle this!!! You want the champagne life, why don’t you put in the business hours, get a second job, hustle and elevate yourself. Getting a second job or hustling can supplement your income to meet your needs. You can also go a step ahead and invest in yourself, business or career so you up your income. I know it is not the thing you want to hear about right now but someone has to bring in the cash to support the lifestyle your desire. The decision is yours to make—either be unhappy doing the hours at work or be unhappy daily facing the mounting debt.
If in the meantime you can’t improve on your income levels, I am afraid you have to cut off the extravagant spending because its just but toxic to spend more than you can afford. Why not forget about lavishing yourself or those who are dear to you with gifts—they too will understand that one day you might be able to afford. In the mean-time cut down on the unnecessary and downgrade yourself.
Debt is The Devil
There is nothing as emotionally and physically draining as debt—it is a monster, worse than the devil. When creditors want their money, they want their money—they will send you endless letters, reminders and terrifying notices. The letters and overdue notices will stack up. Now that brings a shit-ton of stress that piles on top of other issues. Each day begins will begin with a worry and ends with a worry—now that is not the way to live—it is horrible. When you are in debt, you are tempted to ignore or avoid dealing or managing your debt, this will only make your problems mount. Depending on where you are, you need to put in place a debt management strategy either through known third parties or in some instances through social organisations. Such organisations can negotiate with your creditors on your behaviour and so they can come up with a reasonable payment plan. All the same be prepared to stick with it and know that this will take longer depending on amount owed. The good thing about it is that the more frequent payments you make the more likely you can improve on your credit and start take back control of your finances.
You don’t need everything
Have a quick check and ask yourself. Do I need a new Iphone, the new laptop, do you need to go for the expensive holiday you can’t afford. All this just going straight onto credit cards so you can pay later. Turns out you might not need anything! If you are an impulsive buyer, its best you to find ways to make your cash easily unavailable, perhaps get it into a savings account. Don’t go thinking that buying stuff is a way of making you happy—it doesn’t. it does the opposite, make you sad when you struggle to pay. Take a deep breath and consider what you can’t do without, those things that can impact on your life. Make room in your budget for the very thing you want
Never be ashamed to negotiate with creditors
Most service providers and creditors often run promotions and discounts that can give you a relief. It is always up to you to call your providers to see if you qualify for discounts. In-case where your creditors don’t offer promotions and you are still incapable of paying your bills you can negotiate to make smaller payments or pay at a later date. You can contact your creditors in time and explain why you need to pay smaller payments or pay at a latter point in the month. It could be that your payments dates are further away or your pay check dates aren’t as regular.
Chances are your services providers and creditors are willing to hold your bill or synchronise it with your pay dates, that alone can give you the needed breathing space. So never be afraid to request for either an extension or negotiate an affordable payment plan. In most cases creditors rather get a payment than nothing at all!!!
Whatever your circumstance being broke is a temporal state, if you focus on some of these tips you will not only manage to get by but soon start making savings. Importantly, let your situation motivate you to find life full filling opportunities. If you are pursuing a career, you might want to invest in yourself further and if you are an entrepreneur perhaps you need to rethink your business strategy. Don’t go by life thinking that you are poor.
There is a difference between being poor and being broke. Broke is temporary, and poor is eternal – Robert Kiyosaki
© 2017, sheconquers. All rights reserved.
If there is one thing l couldnt resist was pay day loans. As expected they sank me.thanks for this
Fashion and keeping up appearance is my downfall
Fashion is one thing a girl can do with, however you have to find ways of distracting your mind when you find something you like. Mind you realise whe dont derive our happiness by buying things we like but instead by we might end up digging ourselves into debt.
I am sitting down here just thinking, this is exactly what happened to me..I accumulated so much debt from unpaid credit cards and loans. The letters were so horrible that I ended up just ignoring them and that wasnt the best way out, I tell you now.
No money, every pay I suffering. Its not cover bills, What to do sheconquers. I single mother, 1 job
Money can never be enough despite your circumstances. You might want to sit down and evaluate even the basics, are you staying at an affordable place-could you find somewhere cheaper, can you supplement your income and do you need some of the stuff you buy. You might find it a bit easier when you drop some of the unnecessary expenses.
every month I budget, I write, money comes, budget flies out. sad for me sad
It seems there are ‘leekages’ in your budget. Find out things that you are spending on that you shouldnt be. With that be sure to have discipline to say no yourself each time you want to buy something less important
Thanx for this
I have to admit,this got to me, great tips and well detailed posts
Great that you like it
I have no idea how l got here, l work very hard but my money never accumulates
Thats how being broke works, you start well but before you know, you have accumulated so many unpaid bills
I have been in this position, it is both worrisome and stressful. It took a lot of discipline to break the cycle
Thank you..this is real helpful
Glad you find the tips helpful
Thanks for this info.