Budgeting is the most effective way to manage your finances. When done correctly, your budget provides you with a visual of how much money you earn and how that income is being distributed. Viewing your budget can help you make more informed decisions about your spending habits. It can make you aware of areas where you need to cut back and provide insight into what you can and cannot afford to do financially.
As efficient as a budget can be, however, even the most organized one can be thrown off. An unexpected expense or life event can drain finances that you had set aside for other matters causing a buildup of debt and reduction in income. Though you can’t always control every financial aspect of your life, knowing how to handle those costs that pop up out of nowhere can save you a lot of money. Here’s a closer look at some of those things that can throw you off budget and how to handle them.
Employment Issues – Job security is something everyone wants, but essentially no one has. You never know when the climate can change for your employer provoking them to reduce costs or let go of staff. If you lose your job or have to take a pay cut, this can seriously throw your budget out of whack.
Solution: Having an emergency stash of cash that you can use to tide you over until you find a new job is the most effective solution. Start setting aside a predetermined amount of money each week into an account that totals at least three months of your expenses. If you’re currently unemployed or underemployed, you can also look into government assistance. From unemployment benefits and food stamps to free medical care and housing assistance, there are programs that help reduce your out of pocket costs temporarily.
Housing Emergencies – If you’re a homeowner, then you know just how quickly something can go wrong in the house. The need to repair something significant can set you back thousands of dollars. A broken furnace or hot water heater, leaky pipe, or pest control issue can easily occur requiring an immediate response.
Solution: Housing emergencies need to be handled quickly, which means that if you don’t have the cash to cover the repair services, then you need to find a source quickly. Applying for a personal installment loan online can suffice. You can receive up to several thousand dollars in your checking account within a few business days with easy and affordable repayment terms.
Illness or Injury – No one ever plans for getting sick or badly injured, but it happens all the time. If your injuries or illness are significant enough to require you to take time off from work, this can affect your income and budget.
Solution: Ask your employer about exhausting your sick and/or vacation time to compensate for the time you’re out. If you will be out of work for a while, apply for disability insurance for temporary financial relief.
Holiday or Birthday – Not everything that throws your budget off is an emergency. Sometimes even an upcoming holiday or birthday can stretch your finances thin by purchasing gifts. Depending on the type of gifts you buy, this could be a serious dent in your monthly income.
Solution: Try to plan for special occasions. Use a calendar to mark special dates in your life and as you create your budget for that month, remember to include the cost of gifts for those days. If you’re presently in need of a gift, consider giving your time, volunteering to help out, or creative gifts you can make yourself that are more affordable.
Budgets are great when they’re properly organized and used on a regular basis, but they aren’t without flaws. There are certain things in life you can’t predict or plan for. If it’s tied to money, this essentially means taking funds from your budget to cover the unexpected expense. The best thing you can do to reduce the chances of your budget being thrown is to plan in advance or use alternate resources. Reduce your spending, set up a rainy-day fund, budget for special moments, and when necessary, borrow funds from a short-term lender to resolve an emergency for a more solid budget with fewer shortages.
@ Major Major Major Major : Agreed. I really like Brown because he”s not afraid to sound like a small-c conservative on the budget. He is constantly restraining Democrats that are trying to restore social services cut under Republican budgets while still encouraging those services to be expanded to the degree the budget allows, while also pushing for increased revenue. I”m not a deficit hawk, but over some reasonable time frame budgets do need to come into equilibrium. It”s also important to be realistic about the fragility of revenues, and CAs budget is pretty fragile due to how the tax system is structured. He has the benefit of being able to see the consequences of 50 years of budget policy better than anyone else. My frustration with both Dems and the GOP is that both parties seem to be dependent on operating around (different) severely flawed understandings of economics. Brown runs his own course on that topic one that I feel is much more realistic. cheap cialis