Whether it’s from a bank, a friend, a loan company, or even from your own budget, borrowing can turn your budget into a mess. It can also lock you into repayments that you may not be able to afford. If you budget wisely, though, you can eliminate the need to borrow. Check out these tips to help you cut out the need to borrow.
Budget According to Your Income
Take a good look at your income in order to figure out your budget. Keep in mind that you can’t spend more than you have available. Rearrange any bills that you can so they fit into the income you have available. For example, if you have income of $300 available this week, you can’t exactly pay $400 worth of bills — unless you already had $100 available in your checking account.
While there are certain bills that have no wiggle room on payment dates, some expenditures can be moved around. Certain things like when you buy groceries or gasoline or other household items can be flexible on dates. Move things around accordingly so you don’t need to borrow.
Create a Realistic Budget
A realistic budget will allow for unplanned expenses, household items, pet supplies (if you have pets), fuel expenses, and even some entertainment now and again. Don’t set up your budget so it doesn’t allow for any such things. If you don’t plan for these things, you will end up needing to borrow from somewhere to accommodate them when they come up.
Make More, Spend Less
Sure, it’s easier said than done, but making more and spending less is the most important thing you can do to get your budget ironed out and working well. If taking on a second job is unrealistic, look for ways to make a little extra money here and there. Make craft items to sell, baby sit, pet sit, mow some yards, collect aluminum cans and scrap metal to sell, or look around your home for things you can sell for a few bucks.
When it comes to spending less, look at every item in your budget to see what you can whittle away. If you’re consistently paying extra in late charges, those fees can add up. Try to pay bills on time to cut out those fees. Can you ditch your cable or satellite service completely or cut it back? Turn off electrical items around your home to cut back on your electric bill. Consolidate and cut out trips to shrink your gasoline expense. Look for other small ways to cut your bills and save a little here and there — it adds up.
Using your budget to help you get on track with your spending can eliminate the need to borrow. Borrowing money to cover your expenses may seem like a good idea at the time, but any time you can cut out debt instead of adding to it, you will be money ahead.