How do I take on a new cost for health insurance when I can barely pay my bills now?

A spending plan is just exactly that, a plan for how you will spend all the dollars your earn and those given to you (including, hopefully, directing some to savings). To make a change in your spending plan such as adding in health insurance costs or taking on a new car payment, it helps to be as inclusive as possible when calculating all of your monthly expenses. In other words, don’t write in only the premium cost, but include some …

I have more expenses than income. There is no way for me to increase my income given my education and skill set, and my wife is now voluntarily working from home. What should we do? If I am laid off, what happens then?

There are only three sustainable ways to make ends meet: increase income, reduce expenses, or do a little of both. You might want to reach out to local social service agencies for financial assistance (if you qualify) or job training support. Resources such as these might provide additional income. Your wife might also need to seek paid employment or some type of income that she can earn by working at home. Issues related to finances can often be difficult to …

What should a good budget include, and what are the limitations of budgeting?

A personal budget (also known as a spending plan) is a plan for spending and saving money that allocates future income toward expenses, savings, and debt repayment. Past spending patterns, personal debt (i.e., outstanding balances that commit part of future income to repay), and future financial goals are considered when creating a personal budget.

A limitation of a budget is that it will only work if it is adhered to by all members of the family or household. If someone …

What is the “step-down principle” as applied to household spending?

By following the step-down principle, spending is reduced in gradual stages as opposed to eliminating spending on an item completely. The step-down concept for household budgeting was developed by Professor Alena Johnson at Utah State University. To visualize the “step-down principle,” imagine a staircase with four steps. On the top step is the most expensive way to purchase an item, and on the floor below the bottom step is the least expensive purchasing method.

Again, note that you’re not completely …

What should I do if my expenses exceed my income?

When expenses exceed income, three alternatives are recommended: increase income, reduce expenses, or a combination of the two. To understand where your money is going and to identify ways to cut back, consider tracking your expenses for a month or two.

Three short-term options are also available: sell assets, use savings, or use credit.However, it is important to use these options only for the short term. Longer term use of these options could lead to major financial difficulties and possibly …

What percent of my income should I spend on housing, clothing, food, and so on?

There is no “right” or “wrong” amount to spend on a given expense area, just as there is no “average” family to compare with your family. Average living expenditures are a composite from many individual families. Your own family’s goals, values, and stage in the family life cycle greatly affect the way resources are allocated. American spending patterns have also changed a lot over the last few decades with a lot more money being spent today on telecommunications services.

Food …

I recently got laid off. How do I stay on top of things until I find employment?


  • Find out if you are eligible for unemployment and begin the process as soon as possible.
  • Contact your creditors as soon as you know that you’ll have a problem paying bills. Take the offensive. Call your lenders before they call you.
  • When you call a creditor, have the following information ready: account number, reasons why you would like to renegotiate your payment, and how much you propose to pay until you get back on your feet.
  • Keep the lines of

How long do I need to keep my checkbook registers?

There is no one “right” answer to this question. It depends. Check registers are very compact and some people like to keep them for historical purposes as a record of their previous income and expenses. There is nothing wrong with this. You could save 20 to 50 years worth of check registers and take up very little space.

Technically, though, check registers only need to be kept for several months for the purpose of balancing your checkbook. How long you …