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I am in financial crisis. After I am out this situation, how do I budget my fixed income so that every need is met?
By Victoria from Portsmouth, VA
I live off a total of $700 a month and pay my rent, the utilities that aren't covered in the rent, transportation, clothes, laundry, etc. I pay my phone and internet, and electricity. Cable is furnished by the landlord as a thank you for renting. I manage to buy gifts for my adult daughters at the appropriate times, and also for my teen and adult grandkids. I start my Christmas shopping in Jan. or Feb. I use cabs or the paratransit buses. First you have to figure out what your rent or mortage payment, is then the utilities that you have to pay, then food. Any money that you have left after the essentials are paid is for saving or fun things.
Before making any nonessential purchases in any given month, take care of paying your mandatory expenses. The first bills you should pay each month include your mortgage or rent, prescription refills, utilities, food, and health insurance. Until those expenses are taken care of, you shouldn't spend part of your monthly income on anything else.
Check to see if you are eligible for help paying for your groceries and utilities. If not, there are many sites on the internet that show you how to save money in these areas. Two of my favorites are: www.livingonadime.com, and www.hillbillyhousewife.com. Good luck!
I think it's important to note that after paying essentials, you must put some money away monthly for your yearly bills, like property or personal property taxes, insurance on you home, renter's insurance, car insurance, etc, if you have them. After that, comes the nonessentials. You also have to realize that you may not have enough money left over to cover your wants. If not, cut back in all possible areas: drop cable, cell phones, cut back on groceries, turn the air conditioner or furnace setting, pull plugs and turn off lights, plant a garden in the spring, repurpose anything you can think of, etc. You will need to build a contingency fund for emergencies, like medical bills. Your attitude is aslo important--think of it as an adventure, not a chore.
Back in 1967, when we were trying to raise six kids and remodel a 100-year-old house that needed everything, I started a method of budgeting that I still use. It has served me extremely well. I used to do it in a notebook, but now use Quicken, which is both faster and more accurate. If you want a detailed description, email me and I'll write it up for you. Either way, good luck! --sarsi
I've been living on an essentially fixed income for 7+ years now. First I started finding creative ways to cut back on expenses. (For example, I reduced our auto coverage from full to liability because we can get our car fixed for pennies compared to the insurance carrier's recommended auto shop.) Then I found a part-time job I can do from home to supplement my income. It isn't a lot, but the little bit I make helps. Now that hubby is getting a glimmer of how tough it is to make ends meet and that I physically can't handle a 2nd job, he's agreed to cut back on borrowing. (Finally!)
One thing I do is, when any money arrives in my checking account, I shift it straight to savings until I actually need to spend it. It may earn me less than $1 a month, but when you're as poor as we are, pennies count. Speaking of pennies, I collect those, too. When my little penny bank gets full, I take it to my credit union's CoinStar machine. Those pennies have helped us get by until payday more than once.
Do try very hard to stay away from payday lenders. It's a vicious cycle and nearly impossible to escape. Keep a close eye on your checking balance and avoid insufficient-funds charges. That alone will save you quite a bit, as will paying all your bills on time. Late fees are awful, and they sure don't help your credit score!