When Your Income Is Not Enough: Learn to track and prioritize

Unfortunately, many of us have been in a position of not having enough money to pay all of our bills in full and on time each month. Even if we have planned carefully, there may be situations where there is not enough money to pay bills. When your income is less than usual or you have had an unexpected expense, your regular bills and living expenses do not stop.

When you can see that you are coming up short to pay your bills and living expenses, there are a few things you can do. For some, balancing personal priorities and family expectations can sometimes be a challenge. If your work is seasonal or irregular, you may be able to cover everything when you are working, but struggle to cover expenses in the months or weeks when you are not working. 

The more you can prepare for your bills you know are coming, the better you can save for them. Having a plan in place for paying bills can make them easier to pay and help reduce stress. To help you gain a better understanding use the spending tracker, bill calendar, cutting expenses, and prioritizing bills strategies. 

Spending Tracker

  • Get a small container or envelope.  Every time you spend money, get a receipt and put it into the case or envelope.  If the receipt does not list what you purchased, take a second to write it on the receipt.  If you do not get a receipt, write down the amount of the purchase, what you purchased on a piece of paper, and add it to the stack. 
  • Analyze your spending. Go through your receipts and enter the total you spent in each category for each week. Add the weekly amounts per category. Once you get have totals, add them together to get your total spending for the month. 
  • Notice trends.  Circle items that are the same every month (rent, car, or cell phone payments). This will help you create your budget easier. Identify any areas you can eliminate or cut back on.

Bill Calendar

  • Gather all the bills you pay in one month or use the information from your spending tracker. 
  • Write down the date when you must send the payment or when the money must be taken out of your account, in advance of the due date. 
  • Write down the name of the company or person you owe the money to and the amount that’s due on the date the bill must be sent to arrive on time.

Cutting Expenses

These are a few suggestions to decrease spending. You can use coupons, switch to lower-fee or no-fee accounts at financial institutions, and bring lunch to work instead of buying it.

Prioritizing Bills

Identify what you need to pay to protect your housing and income, keep your insurance, and meet any court-ordered obligations.

For more about personal finance programs at UME, go to https://extension.umd.edu/programs/family-consumer-sciences/financial-wellness/personal-finance.

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