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Portioning, supplementing and prioritizing your earnings

January 09th 2013

The current condition of the economy is not quiet reaffirming as far as extravagance and an excess of everything is concerned. Credit conditions are still tight, big banks are fighting tooth and nail to recover debts and the general economic slowdown is a clear reflection of how slow the per capita income is increasing. The job market is recovering but prospects are far from bright. Obviously, cash is tight and every penny saved is in high demand. People have exhausted their savings trying to make ends meet and now a sizeable portion of the population is broke or nearly broke.

The little money that you still have left tucked away somewhere may see a little too meagre to subject to budgeting. So the best option for the moment is to use the resources and namely the finances at hand to optimize and prioritize spending. Here are a few tips.

  • Negotiate with your creditors – Debt is the biggest problem as far as poor financial condition is concerned. The minimum monthly payments you are making on all those credit cards is siphoning off thousands of dollars from your savings and your pay check. Once you fail to make the payments, the creditors will come calling. The worst mistake you can make is to ignore the calls as these creditors of yours might sue you. You need to talk to your creditors, negotiate a settlement or if they don’t agree on settling, at least you can ask them for payment extension. Many banks provide hardship programs and alternate payment plans to debtors in order to help them cope with difficult financial situations. You should take advantage of such programs to ease your financial condition.
  • Stop using credit – Irresponsibly using credit is what lands people in debt traps. Being short of cash also tends to drive people towards overusing credit lines. Credit is quick and easy to use and you may think that you can pay it off later. What most people fail to see is the long term impact such spending will have on their future financial condition. The rule of thumb for using credit should be to spend equal to the value of your cash reserve. In case you are broke, maintaining a cash reserve is highly unlikely and hence, you should refrain from using credit lines.
  • Supplement your income – When you are down on your luck and money is low, you need to find ways to boost your income so that you can recover faster. Assess your strengths and weaknesses and for a while, stop being picky as far as employment opportunities go. For that matter, you can consider working overtime at your present workplace or you can consider taking up a second job. In case you are unemployed, you try applying for substitution teaching positions. Every little bit that you earn builds up your financial security.
  • Reorganize your financial priorities – You need to sit down and think how and where all your money is going and in turn, think of instances where you can stop diverting your funds, at least temporarily. You may be contributing towards some kind of savings fund or retirement option but since your present financial situation demands a little more attention, you should consider stopping for a while. You can use the funds you put into the savings account every week to address more pressing needs.

It takes time, patience and sacrifice to face and live through financial hardships successfully. More than that, you would need to rethink your options and reorganize your priorities in order to meet your present expenses while securing your future finances.

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