7 Signs You Don't Make Enough Money
If you are constantly struggling to make ends meet, you may be facing a combination of problems. It can be frustrating to feel stuck in a financial rut with no way out. You may think that you make decent money, but you are still struggling each month. You may be overspending or you may not make enough money. Or maybe both.
This can lead to real trouble. If you do not make enough to cover your bills, you will need to take steps now to increase your income. Even if you feel like you are too poor to make a plan, a budget can help you get back on track. Learn seven signs that you do not make enough money—and seven solutions to deal with them.
You Are Using Your Credit Cards Every Month
One of the biggest signs that you have an income issue is that you are using credit cards toward the end of the month to cover all of your expenses. If you are running out of money during the month, or you are using credit cards to help you manage between paychecks, then you are most likely facing an income issue. At first, this may not seem like a big problem, but as you run up your balance and your credit card payment goes up, the problem will only become worse.
Solution: Stop using your credit cards
It may seem difficult to stop using your credit cards when you don't seem to have enough to cover your basic necessities. But switching to cash for your daily purchases can help you limit what you are spending.
You Can't Cover Your Bills
If you are choosing between which bills to pay every month, then you definitely have an income crisis. It is important to do something about this situation as quickly as possible. Look for ways to reduce your bills, such as moving to an area with lower rent or selling your car. Take the steps in the short term and the long term to fix this situation.
Solution: Cut your lifestyle
Cutting your lifestyle means trimming back luxuries across the board. It may mean taking your cell phone plan down to the bare minimum and canceling cable television. Instead of eating out, cook at home and stick to a tight grocery budget. A night watching a movie may need to be a rental at home instead of going to the theater. You can still enjoy life on a tight budget, but you need to be careful about how you spend your money.
You Run Out of Money at the Beginning of the Month
Every now and then, you can have a bad month. However, if you are consistently struggling to make ends meet after the fifth of the month, then you are most likely facing an income crisis. This is a clear indicator that overspending is probably not the problem. If you are barely able to pay your primary bills, then you are not making enough money. You may feel like your paycheck is already spent before you receive it.
Finding a new job may be the best way to increase your income. However, taking on a second job or working side projects can help you pay down debt and build up an emergency fund so that you can do more than tread water. If this is going to be a long-term issue, then you may want to consider going back to school so that you can qualify for a higher-paying job.
There's Nothing Else to Cut
When you look at your budget to find extra money, you cannot find anything else to cut. You are already doing without cable, you don't have a gym membership, and you never eat out. If you have cut everything you can and you still cannot make ends meet, then you have a serious income issue.
Solution: Set up a bare-bones budget
A bare-bones budget goes beyond cutting your lifestyle. It means that you only spend on necessities and quit spending on luxuries altogether. This means instead of buying the steak at the grocery store, you go with the hamburger meat. It means that there is no eating out and you do not buy anything new unless you absolutely need it, no matter how good the deal is. Generally, this is a short-term budget that can help you get by until you do something to improve your situation.
You Can't Handle an Emergency
When you are stretched tight each month, it is difficult to put money aside in an emergency fund. But this creates a domino effect. If you are not able to handle an emergency, you may end up using your credit cards. Eventually, your credit card payments will grow large enough that they cripple you even more. If you don't have any extra money to save for an emergency fund each month, even when you've cut back, then you don't make enough money.
Solution: Set up an emergency fund
It may sound crazy to set aside money each month if you are struggling to get by, but having money to cover your emergencies can bring peace of mind and allow you to focus on other goals and issues. You can start with just an extra $50 per pay period and build up from there. Work to have between $1,000 and a month's worth of income in your emergency fund.
You Are Constantly Worried About Money
There is a difference between worrying about how to pay for an unexpected car repair and getting a sick knot in your stomach whenever you think about paying for groceries or covering the rent. If constant worries about money are keeping you up at night, you are likely not making enough money. Put some of the worries to good use and start making a plan that will turn your situation around.
A budget allows you to plan out your purchases ahead of time. An emergency fund allows you to cover unexpected expenses. Increasing your income creates more margin in your budget. If you are moving from financial crisis to crisis, you will not make traction on your goals. Utilizing these tools will make it possible for you to create and stick to a financial plan.
You Are Not Reaching Your Financial Goals
If you are barely staying afloat and not making any progress on paying off your debt or saving money, then you are likely not making enough money. This situation may not be as serious as the other signs listed above, but it is still enough that you may want to take steps to change your current situation. You need to address this before it becomes a more permanent problem.
Solution: Make sure your goals are achievable
Making a goal to get completely out of debt in a year may be a great one, but if you have close to $30,000 in debt and you only make $40,000, this may be impossible. Make sure the goals you are setting are achievable and specific. It may be paying off one credit card by the end of the year or it may be sticking to your budget while working on your debt. You can begin to make real changes in your finances a step at a time.