Dumb Little Man: How to Tell You Can't Cut Your Budget Any Further

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Dumb Little Man: How to Tell You Can't Cut Your Budget Any Further

How to Tell You Can't Cut Your Budget Any Further

Posted: 20 Apr 2013 11:28 AM PDT

I'm a regular reader of about a dozen personal finance blogs like the popular GetRichSlowly.com.

Not only have blogs like this increased my understanding of money, but they've helped me drastically reduce my credit card debt over the past two years and inspired me to stay on the right track from a personal finance perspective.

Without question, raising awareness on where you're spending money is one of the easiest and fastest ways to begin the arduous climb out of debt.

While cutting out the daily trip to Starbucks or bringing a sack lunch to work can serve as low-hanging fruit to improve your finances there are only so many holes to plug in your monthly budget.

No matter how frugal you learn to be you'll still need to buy food, pay rent, and put gas in your car to get to work.

In my opinion Andrea Whitmer at SoOverThis.com does the best job of illustrating this point in her post How Do People Survive on Minimum Wage?

Here, she tries to calculate whether or not it would be possible to live on $7.50 per hour (a whole 25 cents more than the minimum wage in the United States depending on the state).

Spoiler alert. She couldn't do it. Not even with a paltry $200 per month being budget for food. Needless to say cable, internet, and eating out wasn't an option either.

Common Signs There's Nothing Left to Cut

I've easily read over 100 articles on cutting costs to get out of debt in the last two years. This doesn't make me an expert on the topic of personal finance... far from it.

But I can say the advice provided in 95%+ of these articles is pretty much the same: cut costs to the bone. But what happens when you've already done all of the following:

You've cut out coffee.
You've dropped cable and internet.
You don't eat out.
Bring lunch to work.
Clip coupons.
You've sold stuff on CraigsList.

If you're only making minimum wage, you can cut out all of the "perks" listed above and still not get by. If this sounds familiar, now's the time to begin looking for ways to increase your income instead of looking for yet another amenity to remove from the expense column.

3 Ways to Increase Your Budget

1. Get a Part-Time Job: Although probably not the ideal solution, getting a part-time job on the weekends can quickly increase your budget by a few hundred bucks a month. I'd recommend starting your search in the service industry like waiting tables, bar tending, or parking cars. Part-time jobs that get tips will usually net you a lot more income than working an hourly job.

2. Find a Higher Paying Job: If you feel like you're under compensated at your current position, begin to monitor job listings in your industry on sites like Monster.com. Assuming you're qualified for the position, applying for and taking interviews for jobs with higher pay is a simple way to try to increase your income.

3. Start a Business: If you want to begin making some real money, starting a business could be the right path for you. While it will require more work up front before being cash-flow positive, starting a small business can be a great way to build an additional income stream.

The Bottom Line

As humans, we only have the ability to cut expenses so far. We need to eat. We need a safe place to live.

If you feel like you've reached a breaking point in terms of minimalist living, consider looking for ways to make your budget a little larger instead of always cutting back.

Written on 4/20/2013 by Brett Lindenberg. Brett Lindenberg is happy that spring has sprung. If you enjoyed reading this post you might also enjoy reading his blog at www.500amonth.com

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