5 Ways to Handle Your Expenses Being Greater Than Your Income

Monday, April 28, 2014

After I posted my Guide to Being on a Budget, a lot of people asked how to stop living paycheck to paycheck.   So I did a post about that which you can find here.

Still the most common question I continue to get was “What if my income isn’t enough to cover my monthly expenses?”  

That’s a great question and a very common problem.  In fact, I used to be that way as well and I can tell you the ways I changed it.  It is certainly possible for most people as long as you stay dedicated and disciplined.  Remember, it’s worth it! 

So here are 5 methods I used.   I hope these help answer that question.

1. Cash Envelope System

You won’t spend more than what you planned to if you plan for everything.

I can’t stress enough how crucial an envelope system is.   Not only does it help you see where your money goes but when you set it up, you need to write down what type of expenses you generally have.    Since most people don’t even think of random things like a car emergency, or a random doctor’s appointment (copay + medicine cost), it can sometimes throw off your month and you end up spending more than you plan for.    Even if I don’t have a car expense one month, I still put money aside from my paycheck, so that if I have one the next month there’s already money there. For instance my muffler rusted out on my car this month and guess what, I didn’t even flinch because I had more than enough o cover it in my envelope system under the car category.

Think of it as a mini savings fund.  It technically is a savings fund, so when I think of how much money is in my savings I always remind myself there’s even more if I include my car fund, pet emergency fund etc.   Refer to my link on my envelope system to set up your own!  I even have a stress free Christmas because I put money aside all year, as detailed here.

2. Cut Costs Everywhere + In Every Way

I did a post about 10 things I splurge on and 10 things I save on and I can’t tell you how much it makes a difference with my finances.  Try shopping at the dollar store for cleaning supplies or buying generic brands as often as possible.  Cut coupons and follow sales so that you can get double savings when you match coupons up with existing deals.   

And remember every little thing adds up, even your $5 lunch at work.  I pack my lunch, I make my own coffee at home, I buy my own drinks and bring them in, and I drive a car that’s paid off.  Even though it’s nice to get a new car, I’d rather save the money each month than have another car payment.

3. Make Extra Money Each Month

I did a post about the 10 weird ways I save money and as silly as it sounds, every dollar adds up.   I get paid to take online surveys  (all of my sites I use are legit and I’ve done them for well over 5 years!) and in turn I get paypal cash, gift cards for stores and eating out, Itunes, Amazon, etc.   I make $50 -$100 a month from that and while some people think it’s not enough or may not be worth it… that’s a month of gas for me!   

I also sell things on ebay.  It may take some time but once you start doing it you get more comfortable with using ebay and you’ll be very pleased with the income you make!

4. Buy and Accumulate Less Stuff

I embraced minimalism in many aspects of my life and it’s amazing how free I feel financially.   I don’t spend money on DVDs and books because I cut back on my collection.  I use Apple TV to rent, and I own a Kindle so I don’t have to accumulate physical copies of books.  It also has me conditioned to stop and think before I purchase anything.  Just because something looks amazing on the shelf, I ask myself to I really need that? It’s just going to take up space and I have enough home d├ęcor as it is for now. 

5. Live Well Below Your Means

I don’t get manicures and pedicures.  Instead, I do them myself. I ask for gift certificates for them as a gift however so I still get to enjoy them.   I go to a very affordable hair salon and I take care of my hair in between cuts so I can stretch every last dollar I have.

Instead of going to the gym, I workout at home to DVDs.  I moved back home with my parents which isn’t so glamorous but it saves me money right now.

 I wash my hair every other day which saves on shampoo and conditioner costs and I only do one load of laundry a week. 
Another thing I never do anymore is rush to the store to buy an outfit for a night out. I use what I own already, and I create new outfits by mixing and matching.  I also thrift shop if I absolutely must go out. 

I truly hope some of these methods can answer your questions but if you still have some, please leave them in a comment below!

Did you know that I have a financial book available for purchase? 

Get the FREE financial spreadsheets here.

Be sure to join my Facebook group, Fixing Your Finances, to help you with your finance journey along the way.  
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  1. Ellen, I so enjoyed reading your tips. Some of them I already internalized but I like the idea of the envelope system. Thank you so much for your insight on saving money :-9


    1. Ani! Thanks for reading and I am SO glad that you enjoyed them!

  2. My biggest issue is gas. I drive (a lot) for my job and and gas is not cheap. That is what overdraws my account.

  3. Ellen, this is a fantastic post! I love all these great tips! living within your means is really a great way to live!

  4. These are great tips. Swagbucks is another place where you can earn gift cards from.


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