Image Courtesy of Mrbill

A few days ago, I posted some of the "Warning Signs of Financial Trouble". Today's post focuses on when you've blown past the warning signs and you are hearing the sirens. If you've think you've hit rock bottom, you have no place to go but up. Things may seem bad right now but the most important thing is to start looking for ways to improve your financial situation.

Income and Expenses. The first key to improving your financial position is to make sure that your income exceeds your expenses each month. If your expenses exceed your income, you will only find yourself falling farther and farther behind each month. Simple math tells you that if you bring in $100 and spend $200, the only way to make ends meet is usually by taking on additional debt to cover your deficit.

What are some ways to increase the amount of money coming in each month
  • Ebay - Most people have things that they don't use anymore sitting around the house collecting dust. Maybe you don't need this item but someone else can probably use it.
  • Second Job - This is a great time of year to get a part-time job. Most retailers are looking for seasonal help during the holiday season. Although this year looks pretty bleak for retailers.
  • Garage Sales - This is a quick and easy way to make a little extra cash and clear clutter at the same time. I had a garage sale a few weeks ago and made a nice chunk of change. Not only that, I was able to make some extra space in my garage.
  • Roommate - Do you have an empty room you can rent out or do you know someone who has an empty room for rent? I know most people don't like the idea of living with a roommate. I've lived with roommates before and it was not always a pleasant experience. Maybe there is a friend or relative that needs a roommate?
  • Use Your Skills. Do you have a skill that you can use to generate income? I have a co-worker that grew up working in his father's construction business. He now uses those skills to make extra money on the side doing minor construction work.
  • Online - Consider using a program like Mypoints which allow you to accumulate points for reading emails. You can redeem the points for gas cards or gift cards to your favorite store.
    One word of advice: setup a different email address to use specifically for Mypoints. You'll cut down on the amount of mail coming into your regular email address.
  • Coupons - Consider using coupons to save on your everyday purchases. Be careful about things that you had not previously planned to purchase. This will negate your savings.
Once you've looked for ways to increase the amount of money coming in each month, the next step is to minimize the amount of money going out each month.
  • Save on Utilities. The biggest way to save money on your utility bills is to use a programmable thermostat. A programmable thermostat allows you to control the settings of the heat and A/C when no one is home. offers a programmable thermostat for less than $40. I purchased one of these for my rental property and installed it myself in less than 15 minutes. My tenant saw her utility bills drop by over 20% each month.
  • Cable. Do you really need the top cable package offered from your cable company? Can you cut back on your cable package? Better yet ditch the cable completely and save alot more money. In addition to the money you save, you'll now have time to work on increasing your income.
  • Phone. Do you need to keep your landline phone? Can you cut back on your cell phone package? Do you really need to keep a contract on your cell phone. Prepaid wireless is not only for those with bad credit. With a prepaid phone, you know exactly what your bill will be and you are not tied to a certain carrier for 1-2 years.
  • Insurance. When is the last time you shopped for auto insurance? Remember, all insurance companies do not offer the same rates. If you don't want to waste your time going to different websites and having to repeatedly enter the same information over and over again, try using InsureMe. They work with all of the leading auto insurance companies to get you the best rate. If you are happy with your current insurance carrier, consider increasing your deductibles to lower your premium. Be sure you have enough money in your Emergency Fund to cover your deductibles!
If you've done all of the above, another important step is to make sure you are keeping track of your cash flow. Quicken Online allows you to manage all of your finances in one place FOR FREE.

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  1. Anonymous // November 13, 2008 at 3:12 PM  

    Another great resource to track spending is It's a free service as well and they do a lot of the hard work for you. You definitely get out what you put in for this website, but I've found it to be a great resource for figuring out where all my hard earned dollars are going.

  2. Scriptpunk // November 23, 2008 at 10:58 AM  

    Really good advice here, have you also had a look at things like Helium or associated content? You can write articles for money - might be worth a look

    Frugaller x

  3. zzboy // January 18, 2009 at 12:45 AM  

    I will recommend using Its the best offline personal finance manager I have seen up till now.