If you suddenly lost a portion of your income, could you survive? This is the type of question that usually leaves people feeling helpless.
What would you do? A survival budget is a budget that cuts the unnecessary expenses and allows you to cover your most important expenses. Let’s take a closer look at how to create a survival budget.
Cut Expenses
First things first. You need to cut expenses. There are so many things you can cut. Even if you think you can’t cut anything else, you can. It might be cable service, streaming services, or even your daughter’s cell phone bill. When times get tough, a lot of things can go to the chopping block.
Reduce Food Costs
If you have a stockpile, this is the time to live off of it. If you don’t, you can still lower your food costs. You just need to be smarter with your shopping and avoid the junk your family doesn’t need. Plan meals carefully so that you’re using everything that you buy.
Find Free Ways to Entertain
The entertainment budget is definitely something that can go. Instead watch movies you already own, visit the local library, download free books from Amazon, play board games, etc. There’s a lot you can do that doesn’t cost anything or uses items you already own.
Speak to Your Mortgage Provider
Your mortgage provider may allow you to switch to a plan in which you only pay your interest. This will lower how much you pay each month for a short period of time. However, when you go back to making regular payments they may be higher than they originally were.
Shop for Less Expensive Insurance
Shop insurance companies and see if you can get your home and car insurance for less. If your cars are older, consider dropping full-coverage insurance.
Contact Creditors
Last, but not least, if you’ve always paid your bills on time, reach out to creditors. Many creditors will work with you to lower your interest rates. Keep going until you’ve brought the costs down at least 3%, even if you have to speak to a manager to get it done.
You don’t have to panic. You can survive on a smaller income. All you need to do is create a survival budget that cuts expenses. Give up what you don’t absolutely need and look for ways to lower your other costs. With a bit of work, you can survive on a lower income.
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