We recently received an e-mail from a reader who was having trouble making ends meet. Due to setbacks in the economy, he was having trouble finding stable work and had to move from a house to a small apartment to make things work. Even then he is having trouble with student loan bills, car payments, and other expenses.
The best advice I have for those with financial difficulties is to hang in there – things will get better.
3 Ways to Solve a Finance Problem
Solving a financial problem is much easier if you have a strong working budget in place. Here are some tips on how to make a zero based budget. Once you have a working budget, you can see, on paper, where your money is coming from and where it is going. Once you have your budget in place, you can really start making progress toward improving your financial situation. For this, I recommend a three fold approach: reduce expenses, earn more money, and sell things.
1. Reduce expenses
There are many ways to reduce expenses, but the best way depends on where you are currently spending money. This is where you will need to refer to your budget. Look for areas where you can eliminate expenses, or where may be spending more than you could be. For example, cut off cable TV, reduce your cell phone minutes, cut back on subscriptions, etc.
If you have a lot of credit card debt, you may be able to transfer your credit card balance to a 0% balance transfer credit card, which could save you hundreds, or even thousands of dollars in interest payments.
2. Earn More Money
Another great way to improve your financial situation is to earn more money. I know this is easier said than done, especially in a tight economy, but there are almost always ways you can earn more money, even if only temporary. You can take a part time job, you can tutor, do freelance writing online, consulting, seasonal yard work, work over time, etc.
3. Sell Things
Another way to earn money to improve your financial situation is to sell things. Many people have items around the house or in storage they don’t need, but may be able to sell. Check your closets, basement, attic, storage, or where you keep the items you no longer use. If it isn’t a family heirloom and doesn’t prevent you from doing your job, then consider selling it for extra cash.
You can even sell large ticket items to get out from under monthly payments. For example, if you have a car with high payments, sell it if you can, and buy a less expensive car without payments. The same goes for a house – if you can sell it without losing too much money, you could probably save money by moving into an apartment or smaller house. Other items include things like boats, 4 wheelers, jet skis, etc. Don’t sacrifice your quality of life for a luxury item – it’s not worth it.
It takes sacrifice and hard work. I’m not going to lie to you – getting out of debt or fixing a finance problem is not always easy. Sometimes it means making the tough decision of selling something dear to you or moving to a smaller home or apartment. But remember these things are for the greater good and will hopefully only be a temporary setback.