Survival budgeting requires a healthy mindset. Approach it feeling angry and resentful and you'll have a tough time of it. Survival budgeting can be the most satisfying accomplishment you've undertaken of late if you look upon it as an opportunity to replace bad habits with good ones while getting your financial house in order and wrestling the debt demon to the ground.
Start a Diary
Like calorie-counting journals kept by dieters, this survival budgeting practice makes you accountable for every cent you spend so that pricey latte you grab each morning or the bucket of chicken you buy rather than preparing a meal is committed to paper. A budget journal requires diligence and commitment, but it's the most immediate action you can take to launch your survival budget.
Tally Household Expenses
Make a list of household expenses to figure out where you can start cutting while highlighting expenses that can't be altered -- like your mortgage, car payment, school tuition, line of credit and loans. Renegotiation of loan balances has become common practice for financial institutions. If you have a decent credit history, you stand a better chance of cutting a deal with lenders.
Tackle your credit cards
Cut up your credit cards, leaving one low interest card for emergencies. Some card companies are willing to negotiate payback amounts if you advise them of your financial problems. Others may agree to accept only the interest charges accrued for a set amount of time. Commit to paying down the highest interest-bearing accounts first. Small efforts can keep your credit rating from tanking.
Re-evaluate Insurance Coverages
A higher deductible can relieve financial pressure and if your car is aging, other premium reductions may make sense as well. Find out whether your homeowner's policy deductible can be increased and get rid of coverage you don't need. If you are paying for your own health coverage, consider a "catastrophic" policy that will indemnify you against huge medical bills should a serious health event come along.
Use Public Services
Food stamps can alleviate the worry of feeding your family and you may also qualify for staples from a community food pantry. Apply for welfare administered by your state government and if you or a family member are eligible for Medicaid, pursue it. Contact public utilities, too. Advisers at gas and electric power companies are authorized to modify, forestall and negotiate power bills with consumers until they recover from financial crises.
Ask For Help
Your doctor may be willing to give you drug samples to tide you over and if you expect an extended financial dry spell, you may be eligible for free or reduced cost programs run by pharmaceutical companies. Visit the clinic of a local dental school for prophylactic and emergency services and use hospital emergency rooms in a crisis. The American Consumer Credit Counseling organization publishes a downloadable "Budgeting Basics Survival Pack" to help folks on survival budgets.
Get Creative
Use a land line to communicate with the world, especially if smart phone usage helped drive your household budget over a cliff. Many public libraries have computer labs, so a library card may be all you need to handle your electronic communications needs if you can't afford to pay your cell phone or Internet service provider's bill. Stay focused and active and work on adjusting your understanding of the difference between wants and needs so you never again find yourself in survival budgeting mode.
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