It could happen to anyone: despite our best efforts, we suddenly find ourselves short of cash. What’s worse, being broke can easily lead towards higher credit card debt, bad credit scores, etc. But fear not, with a bit of smart budgeting, we can easily get back on our feet. And by smart budgeting, I mean:

Categorize spending for the past month: Being broke means we need to adjust how much we spend, and that’s easier when we can see it in neat categories.

Cut back: Well, this is the most obvious step, I guess. List all the things you won’t miss, and start from there.

Prioritize bills: Review all your regular bills and see which ones need to be paid first and which can be paid in installments (without getting you in trouble, of course). Don’t try to pay all bills in full when it will only make things worse in the long run.

Take note of credit card payments: Late fees and carrying charges can make your credit card even more difficult to pay off. So, don’t try to survive on making only the minimum payments on your card(s).

Forget about saving: Well, only for the time being, of course. Balance your budget first, worry about savings later.

Ask for lower credit card interest rates: If you have a good credit score, try and ask for an interest rate reduction. The worst that could happen is that they’ll say ‘no’, but we never know before we ask, right?

Month by month: Now, after taking the steps above, track your spending for a month. After that first month, see if there’s anything you need to adjust further—and don’t disregard the simple things like picking generic products instead of brand names, cooking from scratch instead of buying pre-packaged food, etc. Believe me, it makes a difference…

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