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Budgeting for survival




Could you be playing ostrich with regards to your spending habits? Making a budget, possibly for one year periods, is a good reality check. It can help you to see clearly if your spending patterns today will land you in trouble tomorrow!
A budget as a tool of survival and, with surgical cuts when necessary, individuals can get the space they need to breathe when disposable income grows less.
For those who are using lines of credit, credit cards, credit union loans, company loans and salary advances to make up monthly shortfalls, its time to budget!

Importance of budgeting

Creating a budget serves to identify and properly plan your expenses in relation to your income, life goals and objectives. Account for even the smallest expenses and do not ignore one time annual expenses such as car and home insurance, states Dave Dixon, Branch Manager with Scotia DBG Investments Ltd
.
Dixon notes that when one constructs a budget and your expenses are higher that your income, you really should consider these three options:
o Increase your income to cover the shortfall- This can be achieved by seeking additional employment or turning your hobby into a business
o Adjust your expenses to fit your budget- This could be done by identifying those expenses that can be deferred until you can afford it. For example one can live without cable service and find some other form of entertainment that does not cost any money. One could also re-negotiate existing bank loans and explore the options of consolidating and reduction in average interest rate . Failure to do this early could result in a situation where you start defaulting on your loans, which may result in the repossession of assets and increases in late charges.
o Save more towards your planned purchases instead of taking things on credit , as you end up pay much more that if you paid cash.
For those who are experiencing a budgeting crisis, here are some additional tips from our expert:

To bring expenditure in line with her income and get out of debt:
* Use savings to fully pay out the two higher purchase contracts.
* Stop using this lines of credit and credit cards to ensure that these can be fully paid off within at least a year..
* Be very disciplined and resist the urge to splurge on items that are not budgeted for and would result in you increase you debts.
* Continue to set these goals until you are debt free and able to comfortable save between 10 per cent and 15 per cent of your income each month without touching same.

*Email Dave Dixon at Ddixon@scotiadbg.com
*Avia.collinder@gleanerjm.com
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