Tag Archives: expenses

How to Get Ahead when your Monthly Income = Monthly Expenses

The main goal of earning an income is equaling (and exceeding) your monthly expenses. When your income and your expenses are equal, it ensures that you can pay all of your bills but leaves you little to no additional money leftover for other activities or things that require payment. But what if your income is less than your monthly expenses? How do you get out of that mess and start enjoying life a little bit more? The chart below lists some quick and easy ways to cut expenses to give yourself a bigger cash cushion at the end of each month.

Expenses to Cut

1. Cable. Cutting cable is the fastest and easiest way to decrease your monthly expenses. On average, you can save $30-$75 PER MONTH when you say goodbye to cable. That’s an impressive $360-$900 per year that you can put toward debt or other smart investments. The compromise is to cut cable but keep internet and order a subscription to Netflix or HuluPlus.

2. Internet. Internet may be hard to cut because it’s so versatile, but you may live near a coffee shop or restaurant that offers free Wi-Fi. Maybe you can even start reading a new book instead or thinking about what you can do with that extra $30 per month.

3. Spending Money. Decreasing spending money is an easy but painful way to save money. Cut out two happy hours, two nights of eating out, and 3 fast food runs to save $60-$75 per month. I’m sure you’ll see your scale decrease a few lbs too J

4. Utilities. Start being mindful of how much energy you’re using. Keep the lights off when it’s light outside, suffer a little in those warm or cold months by keeping your house a few degrees warmer, and take showers that are 3 minutes shorter than normal. Simple changes in your everyday routines can help save you hundreds per year.

5. Grocery Money. “Beans and rice and rice and beans” is Dave Ramsey’s motto for your grocery fund when you’re paying off debt. I don’t know about you but I love food and couldn’t live on a few staple ingredients for a few years. Try cutting your grocery money envelope by $30 initially. After a few months, cut it by another $30. When you have less money to spend, it’s incredible how you find ways to save or “go without”.

6. Avoid overdraft fees/late fees. Pay attention to when your bills are coming out. Put your bills in your phone calendar with the amount being taken out and an alarm that alerts you 2 days before that bill is due. When you know what is coming out and when, you’ll make sure to have money in your account to pay those bills. If you don’t have enough money in your account to pay all of your bills when they’re due, prioritize. Which bills have penalties for being late? Which bills don’t apply penalties initially? Use these tips to help you decrease your monthly expenses or find a way to increase your income.

7. Get a Roommate. If you live alone, you may want to consider finding a roommate. Living alone can cost $300 more per month than living with someone else. Chances are you can find a nicer space to live if you split the bill with a roommate. Not only does having a roommate impact your rent, but it cuts all of your utilities in half as well!

8. 1-payment plans. If you budget correctly, you can save money and eliminate a continuous monthly expense when you choose a 1-payment plan for bills like auto insurance. I like only having to pay twice a year toward my insurance. If you’re not able to do that, try to pay in as few payments as possible to avoid processing fees.

Expenses to Cut Picture

Picture is a courtesy of blog.hirevelocity.com.

For more information on starting a personal budget, check out our Getting Started tab at the top of the page.

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Life Happens…Goals Change.

Throughout the course of a year, your short term plans may change drastically. You may lose your job, move, get married, have a baby, etc. Life happens and your budget and long term goals should change with it. Below are some options to keep in mind when life happens and goals change.

My plans changed when I found out I was moving halfway across the country this summer. I had to re-evaluate my debt repayment plan. Here are some of the options I considered:

Plans Change Chart 1

Plans Change Pic

Plans Change Chart 2

Plans Change Pic 2

Plans Change Chart 3

Plans Change Pic 3 Plans Change Chart 4

My decision: Option #1: Continue putting some (a set amount) extra toward debt/savings while saving for the move.

I am able to continue paying a little extra toward my student loan, making me feel like I’m making some sort of progress toward debt. I also am able to save more than enough for our move and may have some leftover to throw toward debt as well!

Don’t be afraid to change your financial goals but don’t forget to make new ones that fulfill your needs!

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Sam