Q: I don’t have enough money to go around. What solution do you have?
A: It may not help to know, but you are not alone. So many people have more expenses than income. Consider these facts:
• In a 2011 survey by the National Foundation for Credit Counseling, 64% of Americans said they wouldn’t have the savings to deal with a $1,000 unplanned expense.
• Nearly 20% would have to borrow the money.
More than half of all Americans—55%—are living paycheck to paycheck, spending more than or all of their household income.
You may have more money than you think. Or at least you may have a number of places where you can cut your expenses to find the money to save more and reduce any debt that you have.
But, your journey has to start with some self-examination. Before I have you do a detailed budget, I want you to try something. In my latest book, The Power to Prosper: 21-days to Financial Freedom, I have people do a financial fast. This isn’t a traditional fast. It’s a fast to help curtail your consumption so that you can balance your budget.
The book will give you far more details than I can here; but, basically, during this fast, you will not shop or use your credit cards for 21 days. You will refrain from buying anything that is not a necessity. And by necessity, I mean the bare essentials, such as food and medicine. During the fast, you continue to pay your regular bills, such as your rent or mortgage, cable or cell phone bills, etc. The point of this fast is to shut down your consumption and use of plastic—debit and credit.
When you follow the fast through the book, you will get daily assignments to help you look at how you are spending your money.
As part of the fast, you will find tools to help you prepare a budget. Budgeting is key to bringing balance to what you are spending. If you don’t have enough money to cover your expenses, you are either going to have to cut your expenses or increase your income. But, even increasing your income may not solve your problem long-term if you don’t have a handle on your spending.
So, get the book and try the fast. I think you will find help in living within and below your means, even if it means making some tough decisions.