Clues that your budget is not working


I was talking to my brother the other day and found out that the real reason he couldn’t come visit us in another province during the holidays was that his credit card was at maximum and he didn’t had no way to buy a plane ticket or book a hotel. He was also trying to figure out how to pay a property tax bill he was two years late for. I had no idea he was in trouble and honestly neither was he. He just thought that’s how life is. I’m not even sure he realizes now that he might be in trouble. If I tell him he needs help he won’t believe me, so are there any other signs I can make him aware that he will take his finances a little more seriously? ~ Amber


We want the best for those we love, and realizing that a loved one can have money problems can be overwhelming. For many of us, it is in our nature to want to help fix the situation. However, unless our loved one is open to our help, stepping aside and waiting for them to be ready for help is often the best option.

When it comes to gaining insight into our own financial situation, many of us overlook the


. And the longer our situation lasts and the more difficult it becomes, the harder it is to find a good way out. Financial challenges are often a symptom of a larger problem. A family budget that does not balance can be due to a number of factors, including a lack of income, excessive use of credit cards, a medical problem, or hidden expenses between spouses. As such, solving a money problem usually requires more than just a mathematical approach.

Here are five often overlooked clues you need to change the way you manage your money if you want your situation to improve:

Feel like you can’t take a break

A sure-fire clue that your budget isn’t good enough is the feeling that there are always unforeseen expenses that will keep you from staying on top of your finances. When developing a budget, planning regular monthly expenses, such as rent or mortgage payments, utility bills, loan payments, or groceries, is the easiest part. Creating a budget that prepares recurring expenses requires additional planning. Bills like car repairs, a new appliance, vacations, seasonal clothes, gifts, or school fees tend to happen on an irregular schedule. However, if we think about it, they are not entirely unexpected.

If you find it overwhelming to come up with a budget that includes all the expenses you might have over the course of a year, make it easier for yourself by putting your savings aside in a separate account so you have some cash. available when you need it.

Saving money can be a challenge at first, so start small and set aside a bit each time you get paid. Even $ 20 or $ 50 per paycheck will add up quickly. Soon it will seem natural to you to spend a little less so that you can supplement those savings a little more. If it’s not possible to spend less, work an extra shift or two or take a second job to find that money to spend later. Having money in reserve for “just in case” will go a long way to assuage your worries the next time you are faced with an unexpected expense.

3 Ways to Help Family or Friends With Money Problems

Plan the use of your credit cards in an emergency

Do you see your credit cards as your safety net out there in an emergency? A lot of people do, but there’s a difference between using them to pay for an expense and having savings to pay the bill when it arrives, and carrying that expense forward from month to month. Credit cards will get us through it in the blink of an eye, but they should never be your overall strategy for managing emergency spending.

We all face urgent expenses from time to time. If we are driving, our car will need emergency repair. If we own a home, there is no homeowner to call in the event of a hot water tank leak. We all have electronic devices that we rely on that sometimes need to be replaced due to a fall or accidental spill.

Actively putting money aside for emergencies is an important part of an effective money management plan, but it’s one of the last things we think about when faced with a tight budget. And once an emergency account runs out, it’s important to start contributing to it again so it’s there the next time you need it.

How to avoid an unexpected financial crisis

Budgeting with very broad categories

When we start to budget, it can seem like a nuisance to identify all of our expenses and affect the amounts we plan to spend on each of them. However, unless we focus on each of our bills and expenses individually at least sometimes, we are not in a position to take over the planning of how we spend what we earn.

It can take several months to come up with a budget that works for us and our household. And then it has to be adjusted whenever there is a change in your situation. When your income is declining, it’s important to go back to your budget to see where you can spend less so you don’t fill the shortfall with your overdraft or credit cards. As your income grows, you’ll want to see how best to allocate the extra money. It’s always better to spend it on debt repayment or savings than to leave it in your chequing account where it might inadvertently be spent.

When someone budgets with broad categories, to some extent it can mask their expenses. For example, eating out for lunch or dinner, haircuts, and entertainment are more than personal or discretionary expenses. Once your budget is in place and functioning efficiently, it may be safe to think of eating out with friends as entertainment, but when trying to get your finances on track, keep the expenses separate so you can spot them. excessive spending or bad habits. faster.

Category budgeting guidelines

Thinking that you might not be earning enough

Most people don’t realize that those with little money tend to be better on budget than those with more. And the reason is simple: those with less have to spend very carefully because there simply isn’t enough for everyone. Those with more have more margin for error, often have more access to credit, or may have the opportunity to earn higher income more easily. For those who have less, when it’s gone, it’s gone.

If you think your income, rather than your expenses, is the problem with your budget, focus on finding ways to improve your situation instead. First consider your most important budget categories to see if there is a way to create wiggle room. We tend to be determined in the way we spend and manage our money. Without even realizing it, your habits might prevent you from making changes. Next, think about your basic living expenses and if there is a way to free up some cash.

When you don’t have enough family income to re-prioritize your spending, do your best. Take it easy with yourself and your family, as some changes will be harder to make than others. And remember that even if you don’t have enough income now, by taking steps to improve your situation, your future could be very different.

What to do in case of income difficulties

A warning sign not to be ignored

Thinking that you might have a money problem is a warning sign you shouldn’t ignore. More often than not, our gut feelings tend to be right. If you’re struggling with debt, getting help sooner rather than later usually means you have more options. If you don’t feel like you have a problem with debt, but could manage your money better, take steps to learn better budgeting skills and improve your financial literacy. And if you’re not quite sure where you stand because you’re not sure about your financial skills, talk to your banker, a trusted friend, or a

nonprofit credit counseling.

It may be helpful to review a list of warning signs or a

self evaluation

to see if you have any reason to worry. But if you’ve missed payments, rely on your overdraft and / or credit cards to pay for your monthly current expenses, or have considered using payday loans, you’ll probably want to make a few changes to get your money back. financial stability.

The Basics on Warning Signs of Money Problems

Most of us have never learned how to manage our money. We’re doing our best, and even though we’ve been doing it this way for years, if it doesn’t work anymore, it’s time to make some changes. Changing entrenched habits is difficult, especially if we also think we are not good with money. However, the good news is that it’s never too late to learn. And when we know better, we can do better. Make a goal for this year to get back on track with your money, because nothing will change if you do not change anything.

Associated reading:

5 warning signs that you have too much debt

How to stop relying on credit cards to make ends meet

Interactive budget calculator

Scott Hannah is president of the Credit Counseling Society, a non-profit organization. For more information on managing your money or debt, contact Scott by


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or dial 1-888-527-8999.

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