If you are constantly struggling to make ends meet, you may be facing a combination of problems. It can be frustrating to be in a financial rut and not be able to find a way out. You may think that you make decent money, but you are still struggling each month. You may be overspending or you may not make enough money. You may be overspending while not making enough to cover your basic needs. This can lead to real trouble. If you do not make enough to cover your bills, you will need to take steps now to increase your income. Even if you feel like you are too poor to budget, a budget can help you get back on track, and you can use these strategies to help you cope with being poor. Learn seven signs that you do not make enough money.
You Are Using Your Credit Cards Every Month
One of the biggest signs that you have an income issue is that you are using credit cards towards the end of the month to cover all of your expenses. If you are running out of money during the month, or you are using credit cards to help you manage between paychecks, then you are most likely facing an income issue. At first, this may not seem as big, but as you run up your balance and your credit card payment goes up, the problem will only become worse. You need to stop using the credit cards as quickly as possible.
It may seem difficult to stop using your credit cards when you do not seem to have enough to cover your basic necessities. Switching to cash for your daily purchases can help you limit what you are spending. Leaving the card at home when shopping can help you cut back on impulse purchases too.
You Run Out of Money at the Beginning of the Month
Every now and then, you can have a bad month where everything is super tight the last week or so. However, if you are struggling to make ends meet after the fifth of the month, then you are most likely facing an income crisis. This is a strong indicator of an income crisis because it demonstrates that there is not as much overspending going on. If you are barely able to pay your bills and you do not have enough left over to eat on, then you are not making enough money. You may feel like your paycheck is already spent before you receive it.
Finding a new job may be the best way to increase your income. However, taking on a second job or working side projects can help you pay down debt and build up an emergency fund so that you can do more than tread water. If this is going to be a long-term issue, then going back to school so that you can qualify for a higher paying job may be a good solution. As you improve your income, be sure to remember the lessons you learned while poor.
You Can’t Cover Your Bills
If you are choosing between which bills to pay, then you definitely have an income crisis. It is important to do something about this situation as quickly as possible. You may need to take on a second job to help you catch up. You should also look for ways to reduce your bills like moving to an area with lower rent or selling your car. Take the steps both in the short term and the long term to fix this situation.
Cutting your lifestyle means cutting back on the things you do across the board. It may mean taking your cell phone plan down to the bare minimum and canceling cable television. Instead of eating out, you should be cooking at home and sticking to a tight grocery budget. A night watching a movie may need to be a rental at home versus going to the theater. You can still enjoy life on a tight budget, but you need to be careful about how you spend your money.
There’s Nothing Else to Cut
When you look at your budget to find extra money, you cannot find anything else to cut. You are already doing without cable, you do not have a gym membership, and you never eat out. It can be very frustrating when you are choosing between eating and paying your electricity bill. If you have cut everything you can and you still cannot make ends meet then you have a serious income issue.
A bare-bones budget is more than just cutting your lifestyle. It means that you only spend on necessities and quit spending on luxuries altogether. This means instead of buying the steak at the grocery store, you go with the hamburger meat. It means that there is no eating out and you do not buy anything new unless you absolutely need it no matter how good the deal is. Generally, this is a short-term budget that can help you get by until you do something to improve your situation.
You Can’t Handle an Emergency
When you are stretched tight each month, it is difficult to put money aside in an emergency fund. If you are not able to handle an emergency, you may end up using your credit cards. Eventually, your credit card payments will grow large enough that they cripple you even more. If you do not have any extra money to save for an emergency fund each month, then you do not make enough money.
It may sound crazy to set aside money each month if you are struggling to get by, but having money to cover your emergencies can bring peace of mind and allow you to focus on other goals and issues. You can start with just an extra $50 a pay period and build up from there. Work to have between $1,000 and a month’s worth of income in your emergency fund.
You Are Constantly Worried About Money
There is a difference between worrying about how to pay for an unexpected car repair and the sick knot in your stomach that never leaves as you worry about how to pay for groceries or cover the rent. If you are worried about money constantly, and it is keeping you awake at nights, you are likely not making enough money. Put some of the worries to good use and start making a plan that will turn your situation around.
A budget allows you to plan out your purchases ahead of time. An emergency fund allows you to cover unexpected expenses. If you are moving from financial crisis to crisis, you will not make traction on your goals. Utilizing these tools will make it possible for you to create and stick to a financial plan.
You Are Not Reaching Your Financial Goals
If you are barely staying afloat and not making any progress on paying off your debt or saving money, then you are likely not making enough money. This situation may not be as serious as the other signs listed above, but it is still enough that you may want to take the steps you need to change your current situation. You may find yourself in this situation when you start your first job, and you don’t make as much as you thought you would. You need to address this before it becomes a more permanent problem.
Making a goal to get completely out of debt in a year may be a great one, but if you have close to $30,000 in debt and you only make $40,000, this may be impossible. Make sure the goals you are setting are achievable and specific. It may be paying off one credit card by the end of the year or it may be sticking to your budget while working on your debt. You can begin to make real changes in your finances a step at a time.