How do you define living on a tight budget? I think most of us would agree that the phrase implies that it is a challenge to make ends meet each month. Delving a little further, I think it means having just enough or not quite enough money coming in to cover the basics. Necessities such as housing, food, utilities, medical and clothing. Beyond that, most of our spending is discretionary, debt repayment (which may or may not be a result of spending on ‘wants’ as opposed to ‘needs’ and savings.

The reality today is that many households (whether your a single or a family) live on tight budgets and the difference between how well they manage or if they struggle depends on how resourceful they are.

If your budget doesn’t balance or you want to spend more than your income, you have 2 choices, earn more money or reduce expenses. Easy to write but how do you act on both or either of these two strategies? Consider your resources which may include:

• Additional cost saving strategies
• Further education to increase your earning potential
• Research and explore funded or free programs and seminars
• Collaborate with family and friends (i.e. if you plan to take night school but have a young child, will family and friends support you by looking after your child)
• Decide what you want and set a plan to achieve it

The first step is deciding to change your current situation, the next step is determining what you want your life to be and the following steps are assessing your resources and putting a plan in place. We’ll take a look at the planning aspect next post.