4 budgeting tips for families with a reduced income.
There is no doubt that life has been bumpy over the last 18 months. The ongoing COVID-19 pandemic has created an unprecedented economic crisis. As a result, many workers have lost jobs or hours, severely impacting their take-home pay each month. Here are four budgeting tips to employ when you are on a reduced income.
Put your budget on paper
The first step in living with a tight budget on a reduced income is to devise a financial plan. A budget that you do not stick to is useless. Putting these numbers down on paper will hold you accountable for sticking with a budget. Understanding these figures will also help you to see what you can cut to tighten up what you are spending. It is likely that you are spending a significant amount of money on things that you are not even aware of. For example, that daily latte habit can really add up over the course of an entire month.
Making a budget is not helpful if you are not willing to regularly evaluate how you are doing. Sitting down monthly and examining your income and expenses and making tweaks to the existing budget will help you to fine-tune your spending. Even if you are on a low income, it is worth your time to budget your money. Doing so may help you to become more aware of where you can cut costs to help your bottom line.
Seek legal help
You may find yourself in a situation where you feel as if you were unlawfully let go from a job. Should this be the case, it is prudent to consult the professional services of a workers compensation law firm such as Emery Reddy. This type of law consultation could be what you need to get your finances in order.
An attorney that specializes in this type of work may also be able to help you to recoup lost wages. Regardless of the reason for your reduced income, a professional will be able to help you to sort through your options so that you choose the best course of action for your personal needs.
Reach out to creditors
If you know that your reduction in income may be temporary, you may be surprised to find how helpful your creditors will be in working with you through this difficult time. It never hurts to reach out to your creditors to explain to them the situation and solicit help from them. Many creditors and lenders will work out a plan for you that allows you to pay less on your debts for a set period of time.
Should you go this route, be sure to set realistic expectations about what you will be able to handle. Explaining that you are experiencing a hardship and that you are trying to manage your finances during this time may be helpful. It is important to take notes during any phone conversations so that you can review them later if you have questions. It also may prove helpful if you have an email trail. Getting the agreement in writing will be assistance should there be any disputes later down the road.
Learn how to live more frugally
At the end of the day, it is still going to be important to live within your means. This may translate to your needing to lead a more frugal lifestyle. The good news is that there are a number of ways that you can cut costs.
Start by looking at your discretionary expenses. This may include a gym membership, dining out, travel, or other types of entertainment. Prioritizing what is most important to you and taking active steps to reduce the costs of the items that you can live without will cut a large chunk of expense from your monthly budget so that you have a little wiggle room.
It is never easy to go on a reduced income. However, you will feel better if you have a plan in place to get through this time. When it comes to your financial health, it is all about identifying your priorities and remaining committed to sticking to a plan despite the many temptations that may throw you off this course.