The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
  • Books
  • Categories
  • Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
No Result
View All Result
The Money Coach
No Result
View All Result

I have so many bills I can’t afford to save any money. What should I do?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Budgeting
Reading Time: 4 mins read
so many bills - Lynnette Khalfani-Cox
27
SHARES
442
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Q: I’m a College student and my soon-to-be husband just purchased our first home. Last year I bought a car and I’m paying for college out of pocket. With so many bills, how can I save? I do have a 401(k) but I’m tired of living check to check.

A: Congratulations on your upcoming wedding and on you and your fiancé getting that home. To get out of the cycle of living paycheck to paycheck you really are going to have to take a hard look at your budget. I know you have a lot of bills to pay, but to get ahead financially – and stop being cash-strapped all the time – you absolutely must get your spending in alignment with your actual income.

In a nutshell, you can not spend more than you earn. In fact, your spending should not be anywhere near your earnings, and you should be putting aside 10% of your income into savings. To get yourself on the right path, look at every area of your life where you’re spending money, and create a proper, realistic budget. Read on for more tips to do just that.

Two Easy Steps to Creating a Budget You Can Live With

I know that most people loathe the thought of being on a budget. The word “budget” alone conjures up images of deprivation – making us think about every thing we can’t have, can’t do, or can’t buy. But creating a budget – and living with it – doesn’t have to be so restrictive and it certainly need not be a painful process.

In fact, having a good budget offers a host of benefits. A well-made budget:

•    Gives you power and control over your finances
•    Keeps you from living paycheck to paycheck
•    Allows you to save for future goals and dreams
•    Helps you avoid going into debt

Here is my simple, two-step system you can use to create a livable budget that will help you achieve peace of mind and eliminate worries about your money.

Step 1:  Make a list of your expenses

Begin by itemizing all the different areas of your life in which you spend money. Some common categories are:

•    Food
•    Housing
•    Entertainment
•    Transportation
•    Debts
•    Utilities
•    Educational Costs
•    Childcare
•    Insurance
•    Miscellaneous

When you make your list, take a moment to think about how you really live your life on a daily and monthly basis. Do you have kids for whom you regularly buy gifts? If so, include a gifts category for things like birthdays, holidays, graduations, or other special occasions. Or maybe you’re an avid reader, so you should add a category for monthly magazine subscriptions or books you routinely purchase. Your list can be handwritten, or entered on a computer spreadsheet.

Step 2: Adjust to avoid budget-busters

If your expenses exceed your income, you’ll have to cut back on areas that aren’t necessities. Also, to avoid blowing your budget, remember that unexpected events and emergencies always arise. That’s life. You can minimize the impact of these occurrences by adjusting your budget according to the principle of LIFE. LIFE is an acronym that describes the four ways that your budget gets out of whack – forcing you to spend more than you planned for the month, or causing you to live from paycheck to paycheck. The features of the LIFE formula are described below:

•    Listed items are under-calculated

The “L” in LIFE stands for expenses that are “listed” items in your budget, but the numbers you used are actually very inaccurate. For example, if your credit card bills show that you spend $250 a month on clothes, don’t put $100 into the clothing category. Don’t underestimate your spending. Enter a realistic number.

•    Impulse purchases seduce you

The “I” in LIFE refers to the “impulse” purchases that everyone makes now and again. Make sure you’re not buying things on a whim week after week, month after month. That’s a sure-fire way to kill your budget. Whenever you make an unplanned purchase – whether you’re shopping online, buying something from a street vendor, or getting something from the mall when you were supposed to be “just window shopping” – that’s considered an impulse purchase. Keep those to a minimum.

•    Forgotten bills surface

The “F” in LIFE is for those “forgotten” bills that pop up when you least expect them. Some bills get paid annually or perhaps twice a year – like your membership to the gym or perhaps your auto insurance. If you’re not mindful of these expenses, you can forget them and then when the bills come due you’ll be short of cash. To avoid this pitfall, do not omit them from your budget. Just factor them into your monthly budget on a prorated basis and put the money aside. For instance, if your auto insurance is $1,200 a year and it’s due in December, enter $100 in your monthly budget for this expense. Then put $100 cash aside each month for 12 months – instead of trying to come up with all of the money at the end of the year.

•    Emergency or unexpected events occur

The “E” in LIFE stands for “emergencies.” There are obviously times when emergencies – like a burst boiler unit – can ruin a budget. Try to minimize these events with preventative measures, such as regularly servicing your boiler, having routine maintenance done on your car to avoid breakdowns, and making periodic visits to the doctor to stave off serious medical conditions.

Once you realize that LIFE happens to everyone, you can take some steps to safeguard your finances and create a realistic, workable budget. For most of us, that’s the first step to having fewer money problems and achieving financial freedom.

Tags: L.I.F.E
Previous Post

I am Broke and in College. Where Can I Get Money to Finish My Degree?

Next Post

Should I Do a Short Sale, Deed In Lieu of Foreclosure, or File Bankruptcy?

Related Posts

4 Budgeting Mistakes That Are Easy to Avoid

by Lynnette Khalfani-Cox, The Money Coach

Even though people are watching their dollars right now because of inflation, there are a host of financial budgeting mistakes you can easily avoid. Here are four budgeting blunders to sidestep anytime you’re watching your finances.

Financial Truths

7 Painful Financial Truths You Need to Accept in the Age of Coronavirus

by Guest Blogger

The COVID-19 outbreak is causing people to make tough choices regarding their finances. Are you in this boat? If so, you likely have to accept some unpopular truths to weather the storm of these uncertain times.  Here are some hard, but necessary financial truths that you need to consider as...

talk to your teens about money

How to Talk to Your Teens About Money During the COVID-19 Pandemic

by Guest Blogger

You need to talk about healthy personal finance habits with your teenagers, especially during this coronavirus pandemic. From preparing for college to managing credit cards and student loans, you want to make sure your teenager is set up for success.  Your guidance can help them avoid some of the money...

new budget COVID-19

10 New Budget Items to Add Due to COVID-19

by Lynnette Khalfani-Cox, The Money Coach

The COVID-19 pandemic is causing many of us to have to budget for things we never thought of. Here are 10 new budget items that you should plan for as you navigate this "new normal." 

prioritize your bills

How to Prioritize Your Bills During COVID-19

by Lynnette Khalfani-Cox, The Money Coach

To help you make some difficult financial decisions during this COVID-19 emergency, here are some tips on how to effectively prioritize your bills. 

Saving - Lynnette Khalfani-Cox

COVID-19: Why Saving Should Be Your Top Priority

by Lynnette Khalfani-Cox, The Money Coach

Lynnette Khalfani-Cox, The Money Coach explains why despite the impact of COVID-19 on your finances you still need to find a way to save money for future emergencies and goals. Transcript Lynnette Khalfani Cox: Saving money is definitely hard these days, but you still got to do it. Let me...

budget mistakes

The Truth About Why Your Budget Keeps Failing

by Lynnette Khalfani-Cox, The Money Coach

Most Americans don’t live on a budget – which may explain why so many people feel like they’re living from paycheck to paycheck. But even those who do budget often feel like they can’t stick to their spending plan of action. The truth is that if you’ve tried and failed...

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1378 shares
    Share 551 Tweet 345
  • What to Do if Your Spouse Stole Money From You

    1167 shares
    Share 467 Tweet 292
  • What to Do If You Can’t Afford to Leave Your Spouse

    1104 shares
    Share 442 Tweet 276
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1011 shares
    Share 404 Tweet 253
  • What Do All Those Strange Codes In My Credit Report Mean?

    815 shares
    Share 326 Tweet 204
  • Do This Now If Your Wages Were Not Reported

    745 shares
    Share 298 Tweet 186
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    724 shares
    Share 290 Tweet 181

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
  • Home
  • Subscribe to Newsletter
  • QR Code

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist