Expert Q&A Archive

This can be a tough one - look at your expenses and see where you can cut out or cut down. Is your rent or car payment out of line with your income? Do you have credit card bills that take up a large part of your income? If any of these occur, decide what you can do to cut these down and give yourself more income to save. If everything is in line with your income, perhaps you need a different job which pays more, or have a part-time job to add income.

First of all, congratulations on writing a budget and on "just making it". Sounds like you’re not in a negative cash-flow scenario, but you don’t have too much left over after you meet expenses. First of all, look at your expenses and see if there’s anything you can cut back or cut out. Do you eat lunch out every day? If so, you’re probably spending at least $100 a month on lunches. Brown bag your lunch and you could save that cash. If you’ve already trimmed the fat from your budget my next suggestion would be to see what kind of money "leaks" from your pocketbook each month. Sometimes it’s not the dollars that do us in, but the nickels and dimes. Do this: keep a notebook or piece of paper on you 24/7, and write down every penny that you spend in cash. If you put 50 cents in a vending machine for a pack of gum, write it down. If you spend $1 on a newspaper, write it down. At the end of a week, total up your out of pocket spending. If you habitually spend a few cents here and a dollar there on impulse buys, you might be surprised how that money can add up. Continue tracking and see how much out-of-pocket spending you do in a month. Then, give yourself an allowance (say, half of what you’re currently spending) and save the rest of that money.

It sounds like this person needs to get a higher paying job-remember that 50% of the workforce is mismatched and this is often reflected in the paycheck. Perhaps this person needs to get a second job for a period of time to reduce any accumulated bills.

One suggestion is to consolidate your expenses and then start paying yourself.