Creating a budget is absolutely the best way to keep yourself from running out of cash at the end of the month when you’re still between paychecks. However, if you have an unexpected event come up in the middle of the month, it can be difficult to keep from overspending, and you might end up having to write a budget when you don’t actually have enough cash to get you through. How do you go about doing this? Well, here’s a scenario that will help you figure out how to stick to a new budget even when you don’t have the money to actually make it to payday.
Let’s say that you make right at $2,000 a month. Once you take out your rent, car payment, insurance payments, utilities, and other necessities, you don’t have a whole lot of money left over. This month, though, right in the middle of the month, your car breaks down, and you have to pay $300 to get it fixed. Even though most of your major bills are already paid, you know that you have a utility bill coming due in the near future and that you also will have to buy groceries to get through until the end of the month.
What do you do?
First, you sit down and determine the absolute smallest amount of money that you can spend between now and your next paycheck. This should involve cutting out all extra expenses, such as morning lattes and your favorite coffee shop and eating out with friends. It can be tough, but it really must be done. You should factor in only things you need, such as your phone or utilities bill. Estimate how much groceries will cost you if you spend as little as you can on them.
You can save on groceries by buying from a discount store, cutting meat out of a few meals, and eating leftovers like it’s your job. Then, determine if you have any way of making a little extra cash before your next payday. Maybe you can pick up an odd job shoveling sidewalks or raking leaves. If you’re going to keep the situation from spiraling out of control, you shouldn’t see anything as below you.
Let’s say that once you’ve done all this, you still find that you’re going to be about $100 short. Now, it’s time to call in the backup. You can take out a payday loan to help you get through the rest of the month. The loan will have to be paid back as soon as your paycheck comes in, but it will be an easy way for you to get the money you need to survive the month. Keep in mind, though, that once you’ve gotten your payday loan, you won’t be able to take out any extra money. Also, since that loan will come out of your next paycheck, you’ll be $100 plus interest short of your typical monthly spending amount. This means that you’ll also have to stick to a tight budget next month so that you can keep from getting into debt again.