Survival Mode

There have been a few times years ago when money became so tight that we weren’t sure if we were going to make it financially. Putting food on the table, and keeping the lights and heat on were major concerns and paying the mortgage was a complete nightmare. Those times taught me a lot about money and taught me how to conserve every available resource. I called it “survival mode”. When things got better for us financially, if there was a hint of a money issue on the horizon I immediately put us in “survival mode” just in case.

Being as stubborn as I am, I would never allow us to accept any form of government assistance nor did we use food banks or accept any donations or loans from family or friends. What I learned I will teach you so that if times are tough for you now you can learn ways survive or just learn ways to cut expenses. It is easier to save a dollar than it is to earn a dollar. So cutting expenses is a key to your success.

The first thing you need to do is create a budget. There are a lot of budget programs out there and there isn’t one of them that I like. I prefer to use an excel spread sheet. If you don’t have excel that comes with Microsoft Office than try the Open Office products. They are free and very similar. You can find Open Office here.

Creating a Budget

The first thing you do is name your first tab the current month. Then create 6 columns. Starting from the left name them Date, Description Debit, Credit, Balance and Notes. You can download a premade layout with the math done for you here to get you started.

Now grab a calendar or print one out on your computer and gather up all of your bills. Take each bill and put it on the calendar a couple of days before the due date (you want to pay your bills a couple of days early to make sure they are processed on or before the due date so you do not incur any late fees).Now add in all income you receive on the dates you receive it.

Now that you have all budget items in order you can easily put them on your calendar. I like to leave blank rows every so often so that unexpected income or expenses can easily be added.

Now if you are using my budget sheet you will see that there may be times where you are in the red. It allows you to see those times and eventually plan for them in advance. Once your budget is done for the month right click on the tab you named, click on “move or copy” and then click on the month you just made, click the copy box and then “move to end”. It has now made a duplicate Then right click on the new one and rename it to the next month. Since income and expenses are almost the same every month you will only need to make minor adjustments to this new budget (dates/amounts). I like to keep at least 3 months ahead on my budget, preferably 6.

Budget Planning

Having a budget in excel is not going to make things better for you financially. At best it will just make you more aware of what you are brining in and what you are spending. Now it is time to get to work and make the changes necessary to either survive or do better financially. You now need to go through every item on your budget and analyze it. You must first ask yourself if that expense is necessary for survival. If it isn’t, consider reducing it or removing the expense all together. Take for instance your gas bill. Yes, gas is necessary to heat the house, but the amount of gas you use can be reduced. Once you have gone through each item, if you still see yourself in the red at the end of the month, that means you have to reduce your expenses more and/or increase your income.