As financial coaches, we work with people earning less than $20,000 a year to those earning well into the six-figures. And let me assure you: There are broke people on both ends of that scale.

I often say, “Whether you make $20,000 or $200,000, if you don’t have a budget and spend more than you make, you’re broke.” Regardless of income, the one thing we all have in common is the need to learn how to live on a budget. Here are 9 things you can do to help live on a budget (And stop being broke!). 

1. Avoiding Disaster – The Emergency Fund

If you don’t have at least $1,000 in the bank as an emergency savings fund, it’s time to tear through every room of your house to find things to sell or pawn; it’s time to work extra hours or mow lawns; it’s time to do whatever it takes to get that safety net in place. If you don’t have an emergency fund and disaster strikes, you might have to spend more than you’re making to clean up the mess. Don’t force yourself to borrow money – use the stash you’ve saved away for yourself.

2. Review Your Bills and Due Dates

If you fail to pay your credit card bill on time, you’ll get hammered with a $35 late fee and the 29.99% default interest rate, which makes it even harder to make your payments. If you can, make your minimum payments and make them on time. Help yourself do this by making a calendar that displays all of your bills and their respective due dates. Not getting slammed with fees and interest rates will keep money extra money in your budget.

3. Prioritize Your Spending

If you’re living on the edge, one misstep can mean disaster. List your monthly expenses and prioritize them in order of necessity. Your household’s basic needs must be met first, before anything else is paid. These include food, rent/mortgage, clothing, transportation, utilities, etc… Once your most basic needs are met, go down the list to determine whether or not you can pay your credit card bill or student loans this month. Even though you want to pay your credit card bill, you don’t want it to mean going without food.

4. Put a Hold on Your Savings Plans

If you’re barely scraping by, it’s time to hit the Pause button on any retirement savings or automatic savings deductions. You need to free up as much of your income as possible to stay on your feet. It doesn’t make sense to put $100 toward retirement when you’re fighting off debt collectors. You’ll come back to those goals after you’ve navigated your way off the edge of the cliff.

5. Negotiate Your Bills

Call your credit card companies and ask for an interest rate reduction. Call your cable, Internet, utility and insurance companies, and work to negotiate a lower payment. If you never ask, you’ll never know. I guarantee your credit card company won’t call out of the blue to offer you a lower rate. Be proactive and negotiate for some savings!

6. Eliminate Discretionary Spending

If you’re struggling to stay afloat, you’ve got as much business eating in a restaurant as I have of performing on Dancing With The Stars – none. When the ends barely meet (or don’t meet at all), you need to cut out restaurants, movies, hobbies, cable TV and any other unnecessary expenses you can live without. The goal isn’t to make life no fun, but to help you break free from being broke once and for all! While that requires temporary sacrifice, it will be worth it in the long run.

7. Review Your Spending Habits

The first assignment we give every coaching client is to track every penny they spend for one month. You can track in a notebook, budgeting app or through another financial software. This can help you identify any budget leaks or spending habits that may be costing you more than you realize. In most cases, you’ll spend less just knowing you have to write it down. This effect is even more powerful if you have someone holding you accountable, like a spouse or a financial coach, who will eventually review your spending log.

8.  Make Spending Adjustments

After tracking your spending for a month, you can likely identify specific budget categories that need some tweaking.  Don’t overlook your “basics,” such as groceries, utilities or rent. How can you cut back on groceries? Would it be wise to look for a less expensive place to live or try to negotiate a lower rent payment? Can you cut back on utilities by turning off lights when you leave a room or installing a programmable thermostat? If you make changes to cut back on these inevitable, recurring purchases, you’ll save a lot more than you might think.

9. Increase Your Income

If you can’t seem to balance your budget and you’re still barely scraping by, you need to look for ways to increase your income. When we were on our way to debt-freedom, I routinely worked 60-70 hours/week. Was it fun? No! Was it worth it? Yes! It was a short-term sacrifice with a long-term payoff. Pick up some overtime, get a second job, or look for a new, higher-paying job.

Things must come a point when you decide if you’re going to wallow in broke-ness for the rest of your life, or go all out, pedal to the metal, doing whatever it takes to break free from debt, monthly payments, and financial stress once and for all. Is that time now? Take the leap, get the help you need, and make your financial dreams a reality!

Have you ever had to budget every last nickel and dime? Do you think it’s necessary to budget every last dollar? Chime in with your thoughts and opinions in our comments section below.

Have a tricky question Clint and Katy can answer about your finances?
Email it to Editors@PerkStreet.com

Clint and Katy Davis are PerkStreet Customer Columnists and founders of Davis Coaching. As financial coaches, their passion is helping people become and stay debt free! Their personalized coaching is designed to help you get your financial life where you want it to be. Like personal trainers for your finances, they can help you develop a specific plan to achieve your goals, and provide the expertise and accountability to get you there. If you’re ready to take control of your financial life, visit Davis Coaching online, check out the Davis Coaching blog, and connect with Clint and Katy on Twitter and Facebook.