Alternatives to Cutting the Budget

When you experience a budget shortfall, the common advice that a financial adviser will give you is to make cuts to your budget. That usually includes reducing miscellaneous expenditures on items like entertainment, and lowering variable expenses like your grocery or cell phone bill where possible. But when you've done all the cutting that you can and still have an issue, you have to consider some alternatives.

Part-Time Employment

If you have a budget shortfall, you may have to trade your time for more money. Instead of cutting your budget expenditures, you need to add to your budget income. To do so, you can take on a part-time job, at least until the budget issue is resolved. You could also freelance your services around town and take on odd jobs, like maintaining lawns or providing nanny services.

Credit Union Loan

Another alternative to making cuts in your budget expenses is to try to get a small cash infusion to make up the difference. To take this option you need a solid credit profile and score. Credit unions often offer lower rates compared to standard bank loans. Credit unions are sometimes more willing to make personal loans of smaller amounts.

Refinancing Debts

Another way to resolve your budgeting issues is to try to refinance your current debt. Try to consolidate your high-interest credit card debt and loans into one lower-interest account. A consolidated loan can reduce your monthly debt payments and speed the process of getting rid of the debt completely. Consult with a trusted credit counseling service, like the NFCC (National Foundation for Credit Counseling) before deciding to refinance your debts. A credit counselor can also help you better manage your money in general.

Warning

Avoid taking on predatory loans like payday or title loans, which come with exorbitant interest rates, to resolve a budget shortfall. Getting a payday or title loan could put you in a worse position than before -- if you don't pay the loan back on time, you have to pay default fees in addition to annual interest rates that could exceed 900 percent.