If you don’t have much income or have debts that you can’t repay, Creating a budget may feel pointless. You might think, “Why should I care where my dollar goes when I know that no matter what I do, I’ll end up in the red?”
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But while this kind of thinking is understandable and common, it doesn’t mean you should avoid budgeting.
“It’s important to remember that budgeting isn’t just about how much money you make. It’s about effectively managing the money you have.” says Alison Sanka, Certified Financial Counselor (AFC) and Financial Coach. Journey Financial Wellness.
“Creating a budget allows you to better understand your spending habits, find areas where you can cut back on spending, and prioritize your financial goals. This is a great way to manage your finances, regardless of your income level. It’s a tool that gives you control,” she said.
Here we take a closer look at why you should create a budget regardless of your income.
manage money
It may be intimidating to take a close look at your finances, but taking a closer look at your income and expenses, along with other areas such as debt and investments, can put you on a better path financially. there is.
For example, if you don’t know how much income you need to support the lifestyle you want, getting a new job may not improve your situation. Or maybe the problem isn’t your income, but that the interest on your debt is eating into your monthly paycheck.
“It’s easy to get discouraged or overwhelmed when it comes to budgeting when your income is low or during tough financial times. Changing your financial habits takes patience and persistence,” says Sanka. he said. “But budgeting isn’t just about numbers. It’s about understanding how cash moves in and out of your accounts, giving you knowledge about your income and expenses so you can take control of your financial situation. .”
For example, if you start budgeting and realize you don’t have the money you need for groceries, you may find that you can cut back on food deliveries. Or maybe your car payment is too high and you need to sell your car and buy a more affordable one.
“A budget or spending plan is a great way to understand your spending habits, take control of your money rather than letting it control you, identify areas where you can cut back, and prioritize how you spend and save money. It helps. Even small adjustments can make a big difference over time,” Sanka said.
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make the numbers work
Budgeting tends to be important for any income, but it can be difficult to make the numbers work if you don’t have much to work with in the first place. But there is a solution.
“There are always workarounds to make budgeting easier even when you have very little to spare. First, reducing your ‘wants’ is your first line of defense.” For example, we recommend looking at unused subscriptions and expense statements,” Sanka said.
For other purchases you may need to make, such as clothing or furniture, see if you can save money by, for example, buying second-hand items.
“Instead of buying something new, I love using the Buy Nothing group on Facebook to see what my neighbors can lend, share, or donate for free,” Sanka said. Ta.
But that doesn’t mean you can’t handle yourself.
“Cutting out your favorite foods completely will never work in the long run, so by cutting back on food deliveries or only having your daily coffee on Mondays and Fridays, you can avoid cutting out your favorite foods completely. You can turn it into a special treat,” says Sanka.
Finally, if you find yourself struggling to budget because you feel like you don’t have money, you may need to improve your income. Having a clear budget will help you know how much extra income to aim for, and it doesn’t necessarily mean taking a new full-time job.
“There are lots of creative and fun side hustles you can start to make a little money to fill the gap. Start by selling what you have to generate cash,” Sanka said. “If you’re looking for a job that brings in income, think about the things you want to do and the skills that others are willing to pay you to have. For example, if your client loves animals, walking pets or Or, if you have skills that can be taught, create a course and teach it online.”
These steps aren’t easy to follow if you’re struggling financially, but if you want to turn your situation around, creating a budget can help.
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