Facing Foreclosure? The Ultimate Budgeting Solution

A budgeting solution can help you find the extra cash you need each month to catch up on your mortgage payments and avoid foreclosure. As long as you have an income, you can try to keep your mortgage in good standing by cutting unnecessary living expenses. With these two steps, you can fix your budget crisis.

Determine your Weekly Budget

When you are facing foreclosure, you cannot leave room in your budget for entertainment expenses. These items must be entirely eliminated until you have brought your loan current. Instead, determine how much you can practically live on if you are paying only for groceries, utilities without paying a cable or data phone package and gasoline or other necessities. Once you have this number, you know how much you can spend in a week.

Switch to an All-Cash Budget

Once you know how much you can afford to spend on necessities each month, switch to an all cash budget. Leave your credit cards at home, or carry only one for emergencies only. Each week, spend only the cash you have withdrawn for your weekly budget. If you run out of cash, you will have to make due until the next week. This will prevent you from making those small purchases that really add up.

What is cash budgeting?

"Cash budgeting" is a term used to describe the process of keeping track of all cash expenditures. When you are trying to save money, you likely start by budgeting your monthly expenses. You may keep track of all your credit card purchases and checks. However, what happens with the cash you take out of an ATM? If you're like many people, you never know where this cash goes. To truly save money, it is wise to track this cash as well and determine if you can cut back on small, day-to-day expenses. Simply choosing to make your own coffee or pack your lunch rather than spending extra cash to buy these items out somewhere can save hundreds of dollars a month. 

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