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How to Budget When You are Broke

Setting and sticking to a budget is important for everyone, no matter what your financial situation, but if you are living paycheck to paycheck and constantly find yourself short on cash, budgeting is a must. Sticking to a budget can help you avoid damaged credit and other financial disasters. Even if you are broke, there are steps to take in order to set and maintain an effective budget.

Request Extensions to Ensure Your Housing is Paid for

Avoid immediate disasters by requesting payment plans or bill extensions. Free up money for your biggest payment by seeing if you can postpone some of your other bills. For instance, if you are short on money necessary to pay your mortgage or rent, this should be top priority. Contact your cell phone and utilities providers and see if they will allow to you postpone your payment until your next paycheck or even next month. Apply the money that you would've spent on those costs toward your rent or mortgage.

Keep Track of Your Spending and Make Cuts

In setting a budget, it is important to take a good, hard look at your spending habits. Start by looking at last month's spending. Nowadays, this is easy to do thanks to online banking tools. Take notes on last month's spending, and then, start journaling for one month. Keep track of everything you spend money on and keep your expenses listed in categories such as food, utilities, entertainment and rent.

After one month of journaling, take a look at your spending habits. Paying down credit card debt should be a priority, so look at your categorized items and start to free up as much extra money as you can by trimming the fat and cutting out any and all unnecessary expenses. Instead of going out for lunch or coffee every day, pack your own. Reevaluate other entertainment expenses as well. Going out to the movies or for drinks can be very costly. Instead, host game nights at home for your family and friends.

Setting and sticking to a budget is not always easy and requires responsibility and discipline. For more help on how to manage your budget contact the professionals at Advantage CCS to help get you on the right track to financial stability. We are a non profit Credit counseling agency with counselors available via phone, in person or online to help you with your budgeting and debt management concerns.