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Expense more than income- what now?

Uh, Oh. You’ve kept track of your expenses for a month and have listed all expenses and then subtracted them from your income and you have come up negative.
It is time to trim the fat.
The first place I started trimming was our grocery budget. Now, I didn’t start out spending $40/week on groceries- that was too scary. I started out trying to stick to a budget amount that was roughly 2/3 of what we were currently spending. This went well, so I then trimmed it a bit more. Continue to be realistic in this though- according to Dave Ramsey most people underfund their grocery budget category. If you trim it and have to borrow from the gas budget then perhaps you should lower the gas budget and add the money to your groceries.
I trimmed out car expenses in two ways: first I consolidated my errand running which saved on gas (and eventual wear and tear on the car). Next I called our insurance company to discuss our insurance rate- I mentioned that I drive our car on average less than X amount of miles per week. I found they were able to give us a bit of a discount because of the lower mileage. I then compared with other insurance companies, found a comparable coverage that was about $100 less every six months. I called the insurance company back and asked if they would match this rate, considering that we had been with the company since my husband started driving. They agreed. So, with some calculating and a bit of leg work on my part I was able to trim our monthly car expense by roughly $25.
One expense that can be trimmed that I have never had for trimming- direct or cable TV. If you need to radically trim your budget then this has to have the ol’ heave ho- TV is not a necessity. Let me repeat- it is not a necessity. Nor is caller ID or call waiting- when push comes to shove with the budget, these are frivolities. As is that latte- flavor your own coffee at home and save $2 or 5 bucks. Look for trimming some of the things you enjoy but do not need. [Other suggestions: magazine and newspaper subscriptions, club memberships, eating out often- you get the picture.]
You must trim your expenses so that when you minus your expenses from your income the answer is $0. You may have to get radical- if that’s what it takes, so be it- I guarantee you will be better off for it.
That is a balanced budget.

Next Post: What happens when you make your budget and you’ve actually got money left over?

Untitled Comment

4:37 PM, 2008-Feb-1 .. Posted by gabbie427

Thanks for sharing!!! I did the same thing when I started staying at home upon becoming pregnant. I called and got our insurance lowered because I was no longer driving 30+ miles one way to work!

God's Blessings,
Amy Jo