This is a guest post from Stuart, a MBA graduate student from San Jose State University.

For you it may be something that is impossible to achieve when you are already living from paycheck to check. However, budgeting need not be a thing to financially badger yourself further.

Therefore, to make the process of money management easier for you, it is indeed important for you to get some practical advice that’ll guide through the dos and don’ts of budgeting when you’re broke!

The dos of budgeting
Here are few things that you must do to stay within your budget when you’ve already broken your bank:

• Find out your actual income – Before you can actually create a spending plan for yourself or even get your debts organized, it is essential for you to have a very solid idea in place about your overall monthly income. Like many others with a base pay, you can too calculate your entire monthly costs on the basis of your current income.

If you find yourself to spending more than what you earn each month, then it is advisable that you start downsizing that at once to increase your monthly cash flow.

• Prioritize your expenses – Suppose, you have irregular income, then even in that case also you’ll have to prioritize your expenditures and make best use of your money, whenever you receive them by paying off your debts and other household requirements.

If needed, then ask for payment deferment to become current with your debt obligations like student loans, mortgages and so on. The best is to cut back on things that don’t need at the moment. This will free up a good amount of extra cash to repay your debts with ease.

The don’ts of budgeting
Here are the things that you shouldn’t do as far as budgeting is considered when you are financially broke:

• Ignore the need of a budget – This is just the opposite of having a spending plan. However, when you are already going through severe financial doldrums, then not following a budget will aggravate your troubles beyond repair. What is more necessary at the moment is to have both short-term and long term financial goals along with a prudent budget.

In this case, your financial goals should be tangible ones that are in sync with your monthly income as well as need.

• Being without a financial plan – In case, you are thinking that you’ve got a lot of time to act on all your debt-related issues and that the time isn’t ripe for you to take remedial steps to get out of debt, then you are just making a fool out of yourself and jeopardizing your financial security in return.

Instead, you should be of the opinion that ‘now is the time and this is the year to do whatever I can to straighten up my finances.
Actually, you’ll follow all the above money management guidelines with ardent fervor, only if you are person who hates both stress and debt. However, you’ll procrastinate, if you happen to enjoy the status of being financially broke. For more information on our community follow us https://twitter.com/debtcc

You might also enjoy:

Big Picture Planning

Take the first step…make a budget!