When Money is Tight, You Need to Adjust

No matter how hard you try and how much you plan, sometimes, things just don’t go your way and you have to make some drastic changes to cope. Getting into financial trouble is one of those times and if you are currently stressing out over your tight money situation, here are a few tips to help you survive and recover. If money is tight, then follow these steps by Practical Taxes, your accountant in Billings, Montana.


Stay calm, It’s Just a Phase

As difficult as things might seem, keep in mind that the money is tight situation does not have to stay as it is. You have to step up and make different choices; ideally, smarter choices that will help improve your situation sooner rather than later.

Re-evaluate your Priorities

Whether you got into this tight spot by choice (because of unreasonable spending) or by force (unexpected and unfavorable circumstances converged on you), worrying without looking forward simply shouldn’t be an option. Think of it as the universe’s way of telling you that it’s time to look back on the decisions you made, and change the way you’ve been going about things. If you feel overwhelmed, try simplifying by figuring out which expenses you cannot do without, and work your way from there.

Create a Budget

If you do not have a budget, it’s probably one of the reasons you got into this financial dilemma in the first place. Without any plan or objective, there’s nothing to guide you on what to do and what not to do. Financially speaking, it is only by having a budget that you will ever have a chance of achieving your short-term goals, as well as your long-term goals. Start by listing your expected monthly income and expenses, and then allot your income accordingly. Remember that setting up a budget is not enough. It is equally important to stick to your budget. Which means that your commitment and determination should be at their highest level. You’ll need discernment too so you’ll know when adjustments are necessary.

Cut Back on your Spending

If you’re short on funds, you know what you have to do. It’s time to practice self-control and reduce your expenses to their lowest possible level. Remember your priorities? Use this as your basis. Start with your basic needs: food, shelter, transportation and clothing.

While we love living life to its fullest, now is the time to cut back and reassess.

Food: Do you dine out more often than you eat at home? Maybe it’s time you don’t because it’s much easier to control your food spending when you’re the one who’s planning your. You can buy what’s on discount, buy in bulk and be creative about preparing that food item in different ways, use coupons, and purchase only those items that will fit your budget. When you cook at home, you even get that extra bonus of making healthier meals because you can use healthy and less costly food substitutes.

Shelter: If you’re paying off a mortgage, there’s probably not much you can do to bring down the cost. But do you happen to have an extra room which you aren’t using? Instead of bringing down the cost of maintaining your home, why not make money out of it by renting out unused space? It can be intimidating, so consider renting to a family member or close friend.

Transportation: Do you really need to bring your car to work every day? Maybe you can try alternately driving to work, and taking public transit to work. Your best option at this point will of course be the cheapest option; which for many is to actually use a bicycle. You get your workout, and you save on transit costs.

Clothing: Sure, clothing is a necessity because you just can’t go around in your birthday suit, right? But do you really have to buy new clothes weekly, or every time there’s a new fashion, or just because you feel like it? No, no, and no. When funds are low, shopping for clothes (or just plain shopping for that matter) is one activity that ought to be put aside in the meantime.

What about other expenses like utility bills, credit card bills, and loan payments? For your electric and water bills, be more mindful about your consumption. For cable bills, maybe you can survive without cable for a while? For telephone and internet bills, maybe you should consider downgrading your existing plans? For credit card bills and other loans, try paying the ones with the highest interest first, or those with the least amounts.

The bottomline: Spend only for those that you really need, and opt for what is the least expensive.

Earn More Money

Sometimes, trimming down your expenses is not enough. Maybe you’ll get by, but you might never get out of that rut. A perfect complement to that move is to find other sources of income. If you have extra space in your home, rent it out. If you have stuff you no longer use, sell it. If you have a hobby that can make you money like writing or making crafts, find a way to capitalize on it. If you have extra time, find extra work.

Take time to Relax

Worrying all the time doesn’t do anybody any good, so don’t waste your time. Instead, you should still find time to free yourself from all your worries and spend time to relax, be with your family, and have fun with your friends, without having to spend anything. And when you accomplish something (even if it’s a simple victory like earning profit from a batch of cookies that you made, or being able to pay off one of your credit cards)congratulate and reward yourself. Don’t go for anything expensive, of course. Just a little something to boost your spirit, a reminder and an inspiration to keep you going.

Practical Taxes can Help

We can help get you out of your rut when money is tight. We offer affordable tax preparation in Billings, Montana. That means you get to free up more of your time (to earn more on the side if needed), and receive a larger tax refund. You can use that refund to bolster your emergency fund, pay off debt, or do those long needed repairs.

Give us a call today at 406-894-2050 to schedule a time when we can free up your time by doing your taxes.