What To Do When Your Budget Comes Up Short

Often times, when you first start budgeting, you will find yourself in a negative budget – where you are overspending your income every month. What can you do in a situation like that? You’re spending more money than you make, and you’re stuck. What is the best course of action, when you’re drowning in debt, you can’t pay the bills every month, and after you’ve created your working budget, you’ve confirmed that you are coming up short every month?

Here are three things you can change starting today that will help you start working towards the positive direction of your budget.

1. Set your priorities.

When your budget is in the red, your main priorities should be the bare necessities: food, clothing, and shelter. Pay the basic bills, keep a roof over your head, and ensure you can provide basic meals for you and your family. Being behind on your mortgage, but caught up on your credit card bill doesn’t make sense. An important thing to keep in mind at this point is that debt collectors are just doing their jobs – they are trying to do their jobs, to work with you and get money for their employer. They will use intimidation, fear, etc. to attempt to get you to pay. However, remember that your priorities are bare necessities at this point. If your budget allows, you may be able to pay some of those bills. But remember your priorities.

2. Cut back on extra expenses.

The next step is to evaluate your budget and check for any extra expenses that can be cut out. Things like cable TV, entertainment, dining out, etc. can be considered extraneous expenses in your budget. That is for you to evaluate – find the leaks in your budget, and seal them up. It comes back to your common sense – does it make sense for your family to be behind on your mortgage payment, but eat at fast food restaurants 3 times a week? Evaluate where your money is going, and clean it up accordingly.

3. Stay accountable.

Find a way to hold yourself accountable to your new budget. Your budget won’t stick if you aren’t being held accountable for it. If you’re in a relationship this means having open and honest communication through regular budget meetings. If you’re single, this means asking a friend or family member for help monitoring your spending. Ask them to check in with you every once in a while, and to be available when you need a call. They can’t fix the problem for you, but they can help you stay accountable for your spending.

So that’s it! That’s where you start if you have a negative budget. These are just some key points to get you through working through your negative budgets.