When your broke from spending to much

You just got paid from your job, and you feel like you can buy anything you want to (within reason.) Within a few days all your money is gone (from buying junk) and now you have to sit bored waiting till the next pay day. But while you had the money you believed that there was more available, then you checked your balance and you have maybe five dollars till you overdraft. I’ve experienced this in my life, even just recently, just not to that extreme of within a few days.

But for me it was a case of buying more then I should have. Coupled with the fact that I went out of county and took my significant other shopping. But I did enjoy that day which more then made up not being able to do anything for about a week. Now if I hadn’t enjoyed  myself but instead bills pushed me to the edge then I might have been more upset and angry. Even more important was that I wasn’t stressed out, cause I knew I would be getting paid by the company I own soon.

Now that my (good) experience being short term broke is over I do have to look at it through someone else’s eyes, someone who was broke cause of expenses or from overspending on material things with no pay in sight. I would have freaked out and been stressed.

No buffer – This would have been the biggest issue, cause if any unexpected expenses came up (think car being towed) then I would have been worried. Which would have been way out of my comfort zone.

Debt Cycle - I call this where you get in debt to hold yourself over till the next payday, only to pay back the debt and be broke again. Think about it, if you use your credit card to pay all your bills then as soon as you get paid you pay off the credit card. If your not careful you could be broke again since you “lived” off of the credit card, which would start a bad cycle that would be hard to break.

Couldn’t Go Out - This affected my significant other more then me. With no money to freely spend we wasn’t able to get out and I had to remind myself I can’t spend. I ended up putting the debit card inside a drawer until I paid myself. I knew if I went out and just charged the amount I risked placing myself in the Debt Cycle, which I wanted to avoid.

These are the big three for myself that being broke would have limited.

P.S. Happy Fourth of July and try to stay out of debt during this Holiday Season.

The Bare Essentials

In personal finance we may or may not hear of the phrase “The Bare Essentials” but what does it mean and what are the implications of it?

Photo by pshegubj showing a blank expense journal.

Every time I hear of someone cutting back to the “Bare Essentials” I get a visual image of the person cutting every single expense out but what is needed. No cable TV, park the car, etc. But is this the real meaning or do you need to see another meaning? I believe there’s another meaning.

Let me explain, if I was to cut back to the bare essentials then I would cut my eating out way down for starters. But that wouldn’t be the “bare essentials” as I could cut eating out altogether, leaving myself to only eat Peanut Butter and Jelly each day. But your starting to see another meaning. Plus, I’m not sure about you but I wouldn’t like PB&J each day.

Same thing with all of your other expenses, although a few expenses should be cut completely unless it is needed for a job, etc. If your cutting to the bare essentials I’d fully expect you to cut your TV service or downgrade to the cheapest package possible. While others such as fuel are limited in the amount you can cut. Depending upon your job you will not be able to just not come in. Most bosses wouldn’t enjoy that.

So how come when we hear of the “Bare Essentials” we take it to literal vs just almost-extreme expense cutting?