Some people, when putting together their budget, may have noticed that expenses are higher than revenues.  In the past articles, I’ve assumed that revenues were higher than expenses, but there are definitely many cases where the opposite is true.

The most important thing to do is to determine whether or not the situation is long-term or short-term.  If it’s short-term, perhaps from a job elimination, then it’s important that you cut expenses at least temporarily.  However, if this situation isn’t temporary, then you are living above your means and it’s important to change the situation as soon as possible or you will never get ahead.

First, you have to really analyze your budget.  Are the expenses truly necessary?  Is there a way to reduce them further?  There are some short-term things you can do, such as canceling cable, and long-term things you can do such as selling a car.  In future posts, I’ll review ways to eliminate expenses in more detail, but here are some things to look at:

• Cut your food bill
• Cancel or cut back on cable
• Scale back on your cars (either go to only one car, or trade down)
• Eliminate large purchases, such as furniture and vacations
• Try to refinance
• Consolidate student loans
• Re-evaluate insurance policies and shop around for lower prices

Any questions, or specific situations you need help with?  Post in the comments!