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How to Solve Financial Shortfalls

If you have a shortfall after you calculate your required expenses, something’s gotta give to eliminate that shortfall. When you’re faced with a shortfall

  • Don’t completely cut any required expenditures. You may be tempted to drop insurance coverage and/or save the amount of money you need to be saving for a rainy day. You aren’t doing yourself any favors by skipping these items, and the decision will come back to haunt you sooner or later.

  • Review each of the necessary bills you pay and consider ways to reduce those expenses. You may be able to obtain less expensive insurance and save money on groceries, clothing, and transportation by shopping around.

  • Consider your employment. Often, the only reasonable option you, your spouse, or your partner has is to increase income by working overtime (if that’s an option), taking on a part-time job, or changing jobs.

When your outgoing cash flow exceeds your income, get a clear picture of what you’re spending money on (you’ll be surprised how much you fritter away) by keeping a log of every cent you spend. Write down everything, whether you purchase a soda at work, buy gasoline on the way home, or go to the movies. Also track whether you paid by cash, check, or debit or credit card; who you paid; and whether the expenditure falls into the need or want category.

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