It can be depressing and frightening to realize that you do not make enough money to cover your monthly expenses. This can happen, especially if you have overextended yourself with debt. It can be even worse, if you are being paid with a prepaid debt card with hidden fees. There are many signs that you need to earn more money. This situation requires immediate action, and you should do all that you can to change the situation as quickly as possible. Managing an irregular income can make it harder to recover from this situation. You should take a five step approach to the problem, and be working on these areas at the same time. This can help you break free from the financial rut.
First, you need to find ways to reduce your expenses. There is almost always at least one more area that you can cut back in. You may need to find a roommate to share your apartment or find a way to carpool to work. You can cut back on your food budget or keep the heat turned down. These smaller things can help to reduce your expenses. You need to stop spending money on things that are not necessities. This would include new clothes, eating out or vacations. Stop using your credit cards as well. They will only make the situation worse. Look at your bills and determine if you can't afford your car payment or if your rent is too high and then do the things you need to in order to lower the payments.
Second, you need to find an additional source of income or a new job. This may mean that you take on an additional part-time job. You may be able to pick up extra hours at work. You may decide to sell some things to help pay off some debt. The second job or additional income may only be necessary until you are able to meet all of your needs on your original source of income. This can help you to be motivated to work harder and to pick up extra hours, so that you can quit sooner. For example, if you need the extra money to cover debt from a medical emergency, you can deal with the problem, and then quit your job. A second job is not a long-term solution to your problem. You should also ask for a raise at your current job. This may be enough so that you can stay there for a few more years.
Third, you need to look for a long term solution. This may mean that you need to receive further education or certification for your line of work or it may mean that you need an entire career change. If you have not attended college, you may consider doing this as it really does increase your earning power. As you consider these options, be sure that you choose something that you could enjoy doing that is practical as well. You want to be able to benefit from the extra education in a practical sense as well.
Fourth, contact your creditors and see if you qualify for a reduced payment or forbearance of some kind. Student loans will offer forbearance if you can prove economic hardship. Credit card companies can temporarily reduce interest rates, or reduce the amount you owe each month, though they may require you stop using the credit card.
Fifth, it is important that you cover your basic needs before you pay your creditors. This means that you have enough food to eat, a roof over your head, and your utilities are on, then you pay your bills, and then you have fun. This order of priorities is essential if you are going to survive the next few months and come out ahead. Remembering your priorities throughout the month will prevent you from running short on cash towards the end of the month. Your budget and your priorities will help you manage your cash flow more effectively.