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Friday, October 23, 2020

How to Budget When Broke

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Budgeting isn’t new. Most of us do have some idea on what we do with our money, based on the bills that we pay, the money we spend buying our necessities, and other expenses that we have. But if you think that budgeting when you have the funds is already difficult, imagine doing it when you are broke! Is it even possible? Well, there are ways in which you can handle your funds even when you are broke. Here are a few that you should take into consideration.

Study your financial situation

Are you spending more than what you are earning? You have two options to solve this matter and these are: start earning more or rethink your expenses. Most of us tend to live beyond our means that we end up broke or in deep debt. By re-evaluating your financial situation, you will be able to figure out how to budget your money accordingly.

Focus on the essentials

Another tip to budgeting your money when you are broke is to focus more on the essentials or necessities such as mortgage, education, food, and so on. These are the ones that you should spare money for since without them, it will be difficult to live. Once you have determined these essentials, write down the rest that you spend money on then decide whether they are essentials or things that you can actually do without.

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Minimize your spending

Like it was mentioned before, you need to put priority over your necessities. Aside from that, you will also need to learn how to reduce your spending if you want to have better control over your money. Ask yourself this, do you really need to buy coffee outside? Or are take outs necessary? Is it important that you travel to another country on a limited budget?

Create your budget

Now that you have identified the more important parts of your budget, you will need to set aside a budget for them. You probably already have an idea on how much you spend on the basics so make sure that you have put the necessary money aside to meet your obligations. This will be your monthly budget and one that you shouldn’t take from if you find yourself in need of extra cash. This is going to be tough at first, but it will help you in the long run.

Handle your debt

There is nothing wrong with asking for a loan especially when you are strapped for cash but make sure that you pay it on time. Missing out on payments means that you will be paying the interest too which can affect your budget.

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