Being broke is one of the most frustrating situations in life. It can really be hard to force a smile when your bills pile up, your credit score has dropped, and you’re nearing eviction from your home. When you’re having difficulty making ends meet, you know it’s time to take some action.
Prioritize Your Bills
It could be very overwhelming to choose which one to pay first, but as much as you want to get rid of your credit card debts first and their skyrocketing interest rates, you may be concerned about getting kicked out of your apartment. If this is the case, you definitely have to address immediate concerns first. However, it doesn’t mean that you just have to forget your other dues. You should contact your other creditors and see if they can extend your due dates without penalties.
Forget About Your Savings Rules
While many financial experts can’t tolerate halt in spending, it might not be wise to have your savings and debt grow at the same time. As much as you want to turn your life around and begin to save, you might have to delay it until you’re back with a clean slate.
Review Your Budget
If you’re living paycheck to paycheck and don’t have any idea why this is happening, you have to take a look at where your money goes. Identify how much your income is and compare it to your expenses. If you’ve seen your balance go to zero month after month, you have to explore where you can cut back on costs. While you can’t escape the groceries, gas, utilities, and rent, there may be other areas that you have been missing, such as Friday night get-togethers that should not be a staple in your monthly budget.
Differentiate Wants from Needs
This can be a little tricky, as each person has a different perception of wants vs. needs. While another can easily pass up on a pretty dress on sale, you might have difficulty differentiating your needs from something that you just really want. You need a place to live, and you might also need new furniture and decorations. You need to eat, and you might need to eat out. You need a cellular phone, and you might need a smartphone. You should be able to draw the line between them and make the right choices if you want to be broke no more.
No one else can know you better than you know yourself. Perhaps you can’t resist buying any item that you don’t really need when you visit the mall. Or you can’t ignore that coffee aroma whenever you pass by the café. Take a second look at your recent expenditures and see where you mostly spend your money. Identify these weaknesses of yours and plan to avoid temptation.
Don’t be Too Harsh on Yourself
Getting back on your feet may take quite a while, especially if you’ve fallen behind on your payments for such a long time. You just have to be patient and make adjustments rather than punishing yourself if you failed on your first attempts.