1: Calculate exactly how much your expenses exceed your income
You can't create a plan if you don’t know exactly how much you’re under, right? Well, I guess you could but it would be based on you guessing and that's not something you want to do when it comes to your money.
Make a list of all your regular monthly expenses and your income to get this amount. And when I say regular expenses I mean everything you need to live a healthy & productive life including:
- Debt payments
- Cell phone payment - It's 2022. Yes a cell phone is important nowadays.
In a document or spreadsheet, write down what you owe for each expense. If it varies, simply just write the average of your last 6 totals.
Include the name of the lender or service provider, and the due date. This way, you'll know exactly how much is required of you per month and you can track when the payments will be taken from your account.
2: Determine which expenses can be cut and reduced
Don't run! I know hearing the words "cut" and "reduce" can make the hairs on the back of your neck stand up. But keeping it real, when you're in a situation where you feel like you don't make enough money to pay your bills some things have to go!
If only temporarily.
Even when you feel like you’ve shaved down your expenses as far as they can go, chances are there’s something that can be adjusted.
If after writing down your expenses you discovered that you should have money leftover then you’re spending on something that’s obviously undocumented.
Which means that you may say something like, "I don't know where my money is going!"
Uh uh, find it.
Go back through your bank statements for the last 3-6 months and look at exactly where your money is going.
Then ask yourself:
- Can this be reduced?
- Can this amount be negotiated?
- Can this be eliminated if only temporarily?
- How much would this give me if it was cut or reduced?
And if the savings is worth it then make the adjustment.
3: Continue to pay down debt
I always say that paying off debt is like an instant raise!
Think about it, how much extra money would you have if it didn't have to go to lenders? And the more you pay down debt, the less money that's required from you.
For example, if you have a credit card you’re working on paying off then just applying an extra $10 to your minimum consistently will help to decrease the amount you’re required to pay. Which gives you more money to work back in your budget.
This is the strategy I used when I didn't make enough money, and as each debt dropped my spendable income increased.
4: Get creative!
When you’re stuck in a situation where you don't feel like you make enough money, sometimes you have no choice but to get creative.
One thing I've learned is when you’re actively looking for ways to improve your finances then you’ll find them!
Here are some tips to find extra money:
- Refinance high-interest loans. Consider refinancing loans with high interest rates. I did this for my auto loan and went from a 9% to 2% interest rate! This lowered my car payment by $100 and helped me pay it off faster.
- Take advantage of 0% intro APRs. If you have credit card debt, consider rolling over your balances to a card that offers a 0% intro APR. I did this and it helped me knock out my debt nearly twice as fast!
- Make extra debt payments. Yes, this may seem counterintuitive at first but if you get extra money like tax refunds then using a portion to pay off your debts can wind up saving you a ton of money in the end.
5: Pivot job positions and start a side hustle
Whether it’s adding a small hustle or getting a completely new job position, jump in and get started! Don’t sit on the thought for too long because your brain will start feeding you all of the excuses as to why you can’t do something.
It’s ok to feel a lack of confidence in your skills and abilities, but don’t let those feeling become roadblocks because feelings aren’t facts they’re feedback. And this feedback may include you taking some training to improve your skillset so that you can feel more confident.
This may require you to put a little money in to get a lot of money back, like having someone help you with your resume and taking certain courses, etc to improve your chances of getting hired but it's well worth it!
When you find yourself saying "I don't make enough money" don't end that thought there. Instead, work to find opportunities in your day to day that can help you live more comfortably.