A little more about your basic budget
Last week, we reviewed creating your basic budget. One key question we got was around when to start it, especially because rent or mortgage payments are due on the first of the month. It is better to begin your budget at the beginning of the month, so you have a full picture of what money you have available. But because you typically have that payment, you should either start the budget immediately after that payment and record what you have left in your bank account, or start with your bank balance, and show your rent or mortgage payment as the first bill you owe. Of course, since we are talking about not being able to afford your mortgage payment, you may just be showing this on paper.
As mentioned last week, payments like your phone, cable, and groceries are places where you can lower your expenses. You can drop to lower expense plans for phone and cable. Call these companies and ask for reduced plans or specials they can offer. For many companies, if you tell them you have to drop services all together, they have retention departments that will offer great deals to you to keep you as a customer. For TV, many online streaming services are available now that are far cheaper than cable. Consider those. If you have phone and cable through the same company, ask about bundle options to save money.
Groceries are a tough one because you have to eat, right? But, you can save money by using coupons, shopping on days when stores are having specials, and finding recipes that use cheap ingredients. Do a Google search for inexpensive recipes. You will find hundreds of good ones. If you only buy prepared meals, it might be time to learn to cook. Making your own meals is cheaper than buying food from the frozen section or eating out.
What about other expenses, like gas, oil changes, clothes, etc.? It’s all about shopping around. You can download apps on your phone that find the cheapest gas in your area. Get oil changes at stations that are offering specials. Look for clothing sales online.
Another key thing you can do is ask to have your payment dates moved. If you recall last week, you can run into times when you have a payday, but then all your money goes towards bills between that payday and the next. If you want to eat, you are stuck with paying bills late. However, after the next payday, you may have plenty to cover bills and your groceries. So, balance out what you have going out with what is coming in by moving the bill due dates. Most companies are happy to do this because they want to get paid.
Running your new budget
After you have negotiated new terms for your bills, moved payment dates, reduced your grocery bills, and taken advantage of all those deals out there waiting for you, run your new budget for the next month. You should see an improvement that gives you more money to put towards your mortgage. If it works, that congratulations! You are back on track! If not, stay tuned next week for how to tackle the mortgage issue.