Getting Out of The Red: When Bills Are Higher Than Wages
Whether one lives in a very expensive location, or has pressing medical needs, or mountains of debt, sometimes a person finds him or herself drowning in monthly bills. The situation may be so dire that the bills are higher than their wages.
It’s a difficult situation, and it may not be the fault of reckless spending habits. If a medical emergency strikes, the amount for health care can be staggering. Or perhaps someone in the family has a car accident and has to take on a new loan. If the monthly payment puts you over the edge and you’re running in the red, what can be done?
As I wrote in another discussion the other day, one of the most important things to do to keep your financial house in order is to get on a written budget every month. A budget puts you in control of your money, instead of it controlling you.
I, for one, am a budgeter. My wife and I sit down monthly and go over our last month’s expenses, and then make projections for the upcoming month. How much should we put into this category? How much to pay on this debt here? Should we cut that category over there?
I recently got laid off from my job where I was a full-time salaried employee. I enjoyed working there, but market changes forced the company to downsize. Because of that, we were left with only one of us working (my wife is a teacher). However, her wages are not enough to cover the bills in a given month.
So what are we doing? Since I don’t have full-time work at this point, I’m mixing and matching various part time jobs. I’m driving for Lyft, I'm helping out part-time at a marketing firm, and I'm taking whatever other odd little jobs come my way.
Taking these part-time jobs acts is a carryover for us in that we are no longer having an income problem, though it's not an ideal situation. If I was not working at all, we would have a big problem.
If you are budgeting monthly and you are not spending like you’re in Congress, the key is to get your income up by any legitimate means necessary. Consider some options:
1) Get a part-time delivery job. As Dave Ramsey always states, one can take in as much as $1,500 a month doing that five nights a week.
Or you can drive for a rideshare service like Lyft or Uber. In a few days of driving (over the course of about two weeks), I picked up an extra $200. If I drove two-three nights a week, especially during prime time hours, I could take in another $600 every month. That’s $7,200 a year!
2) Sell some stuff. We had a bunch of things that we had but were not using, and were able to make some money by getting rid of them. An old wine fridge we didn’t have space for? Gone! A hobby-grade radio controlled truck I hadn’t used in years? Gone! And we got cash for those things, along with a few others.
3) Cut back on spending. If after doing these things you still have more bills than wages, it’s time to seriously consider cutting back some of the things you’re spending money on. You may need to slash your entertainment fund by 50 percent or more, and your clothing fund by that much or more.
Get on a cash envelope system for your budget, physically control your money and literally force yourself to spend less.
A time like this is not pleasant. It will require sacrifice and hard work. But determination to get through it will take you through the difficulty. Remember also that this is not a permanent state; it's a part of life, but better things will come in time.
What do you do to save money when you're short on income?