If you have a budget and track your spending, odds are there have been times where you noticed that more money was going out than coming in. In fact, around 54% of Americans spend more than they earn and this puts them into a budget deficit each month.  

Knowing that you don’t have enough to cover your expenses can be a scary feeling. The truth is budget deficits happen all the time whether some of your bills have gone up, too many impulse purchases were made that month, or you’ve experienced a decrease in income.  

This doesn’t mean that you should give up with budgeting altogether. In fact, your budget will be key in helping you get back on track. Here are some key steps you can take to fix a budget deficit and reset your finances. 

Assess the Situation 

A budget deficit means there’s a leak in your spending plan somehow. Money is going out or slipping through the cracks when you really can’t afford to be spending it. When you have a leak under your kitchen sink, you call a plumber to find out where it’s coming from.  

When there’s a leak in your budget, you have to do the same only you can often assess the situation on your own. Take a good look at your budget and your recent bank transactions. Identify areas where you may have overspent even if you felt justified in doing so at the time.  

Usually, it won’t take long to find out where the money leaks are coming from. Sometimes it can trace back to some of your biggest expenses like your house payment or rising grocery bill. Other times, it can actually be due to an income decrease like you or your partner being out of work. Once you pinpoint the cause, you’ll be more equipped to figure out a game plan.  

See Where You Can Make Cuts 

Naturally, you’ll want to explore the idea of lowering some of your expenses to fix a budget deficit. This is why it’s so important to assess the situation and know what you’re spending money on. Completing the previous step will actually help you determine how much you are overspending to the dollar. 

If you know you have a budget deficit of $500 per month, for example, it becomes clear that you need to free up an extra $500/month in your budget. 

You may not be able to lower fixed expenses like your rent or mortgage, but you can look at variable expenses. Here are some things you can consider doing for instant gratification:  

  • Reduce your grocery bills by 20% 
  • Switch to a prepaid phone service or bundle your family’s cell phone plans to save 
  • Cancel any subscriptions that aren’t a necessity
  • Cook more meals at home (buying ingredients is cheaper than buying prepared meals) 
  • Make your own coffee at home or drink coffee at work for free 
  • Swap out your cable bill for a $10/month streaming service 
  • Shop around for insurance using sites like Quotacy and The Zebra 
  • Find free entertainment 
  • Use online coupon sites to save on household purchases and clothes 


If you don’t know where to start, consider separating your budget into two categories: necessary spending and unnecessary spending. Necessary spending should include all the costs you must cover each month in order to live and stay afloat. Anything additional could be temporarily cut or reduced to free up more money.  

Check Out Bill Relief Options 

Don’t count out bill relief options just yet if you’re truly struggling to make ends meet. If your situation has drastically changed and you’re in a severe budget deficit each month, let your bill companies know.  

Not saying anything and just not paying the bill won’t solve any of your problems. The company may have relief options where you can split up payments or even apply for a lower interest rate.  

Government relief programs are also worth considering if you qualify. You may be able to get energy assistance funding to help supplement your heating and air conditioning bill (through a company called LIHEAP) If you have federal student loans, see if you can get them deferred or apply for forbearance while you work through your budget deficit. 

See How You Can Earn More 

Once you’ve laid out all your expenses and explored your options with lowering costs, it’s time to see how you can earn more money. If you or your partner lost a full-time income, that could you in a huge budget deficit.  

Maybe you’re a substitute teacher but don’t get paid in the summer which can often lead to a budget deficit. Perhaps your job cut your hours or your spouse is going back to school for a higher paying job but you need to manage expenses in the meantime.  

The best way to fix it is to see how you can replace that income even if it’s just temporary. See if it’s possible to pick up extra work with your employer. If that’s not an option, start looking outside of the company and see who might be hiring and is in need of your skills. 

If you can diversify your income by picking up side gigs, this could be helpful as well. Can you find a part-time job? Can you sell something or offer a service? You may be able to do the same work you do at your main job but offer it to 3rd party clients as a freelancer.  

Choose something that fits your schedule and can provide you with enough income to fix your budget deficit. If you’re in a monthly deficit of $600, this means, you’ll need to earn $150 per week minimum. You can also combine your saving efforts with any extra income you earn to get overcome a budget deficit. 

Make Sure It’s Temporary 

If you know in advance that you’re going to be in a budget deficit, purpose to start planning and saving in advance to prepare for leaner times. The problem is, most of us don’t know the situation will occur until it already has.  

Use these tips to help you improve your finances so you can get by when expenses become higher than income. Know that a budget deficit is only temporary. If you make sacrifices and cut certain expenses, it may only be a temporary thing just so you can get by.  

When you get back on your feet, make sure you commit to setting aside at least 10% of your income each month so you can have some cash reserves to fall back on if a budget deficit ever recurs again. 


How to Become and Stay Motivated During Your Debt Payoff Journey 


Paying down debt can be a challenging yet rewarding journey to go on. On one hand, you have to change your lifestyle and free up more money to put toward your debt. On the other, the sacrifices you make will help you get closer to obtaining more freedom and control over your money.   

With each debt payment you make, you unlock more of your hard-earned money and more choices for your future. However, staying motivated during your debt payoff journey is easier said than done.  

There may be times when you’ll have to say no to happy hours after work, family vacations, and possibly even restaurant meals in order to save more money to put toward debt. How can you stay motivated during the whole process and perhaps even enjoy the journey? Here are some tips that can help.  

Have a Clear Why 

It’s important to figure out why you want to pay down your debt as soon as possible. Get really specific and clear on your why to make sure it’s a reason that really means something to you.  

Your why may be so you can start a side business debt-free and spend more time with your family 

Or, maybe you want to be able to stay at home with your kids and you can’t do that because of debt.  

Perhaps you want to travel more during the year or pick up a costly new hobby.  

Whatever your reason why is, use it to motivate you. Your debt is an obstacle that standing between you and your why. Once you get rid of the debt, you’ll have more possibilities and options in your life.  

You can also refer back to your why during those days when you aren’t feeling too motivated to stick to your debt payoff plan. Sure, you may have to stay in on a Friday night and do something free at home but just think about how much fun you’ll have when you’re sipping a pina colada on the beach on your next debt-free vacation. 

Set a Debt Free Date 

This is totally up to you, but you may want to put a date on the calendar for when you expect to become debt free. This gives you something to aim for and serves as a reminder that your sacrifices are only temporary.  

You can plan how you will celebrate becoming debt free by your desired date and even start a countdown which will motivate you to stick to your repayment plan.  

Understand that your debt free date may change since life is unexpected but knowing that your aiming toward something specific can be very motivating. 

Make It Visual and Track Your Progress 

Sometimes we set big goals but don’t make any effort to track our progress. This is a big mistake because acknowledging your progress is a great way to stay motivated. Seeing that you’re getting closer to your goal with each payment can give you that extra push to keep going.  

Try to make your debt repayment goal visual by doing things like creating a vision board, putting up inspiring pictures around your home or workspace, or even using a debt-free chart. A debt-free chart is a fun and active way to track your progress by shading in a portion of the image each time you make a debt payment.  

DebtFreeCharts.com offers free graphics that you can print out to start tracking and visualizing your progress. This is a small action you can take that often provides a big motivation boost.  

Set Smaller, Attainable Goals 

This is a great trick to keep in mind for any goal that you set. Your brain is not wired to respond well to overwhelm. This is why a big goal like paying off $50,000 of debt may seem super daunting.  

You know that paying off the debt is the right thing to do. However, you may not feel super excited about it or motivated to keep going.  

Consider breaking the goal down into smaller, more attainable chunks. For example, instead of saying that you want to pay down $50,000 of debt AS SOON AS POSSIBLE, start by committing to pay off $5,000 during the first year. That breaks up to only around $417 per month. 

You can also commit to putting any extra windfalls, work bonuses, and gift money you receive for the year toward debt. Say that adds up to an additional $2,000 which means you’ll have paid off $7,000 of debt in one year. This puts a sizable dent into your balance and still allows you to enjoy some aspects of your current lifestyle.  

Celebrate Milestones 

Don’t forget to celebrate milestones. Sometimes we do such a good job of pointing out our flaws and mistakes that we forget to acknowledge our wins. Instead of beating yourself up about going over budget at the grocery store, give yourself some grace. Realize that small mess-ups are going to happen and it likely won’t through you completely off track.  

Instead, take the time to stop and acknowledge your progress especially when you hit certain milestones. This is why breaking up your debt repayment goal is so important.   

If you make an extra payment toward a balance or reach the 25% mark on your debt free chart, celebrate this major win. You don’t have to go overboard and take the family out to eat at a $300 restaurant, but maybe you get yourself an extra trinket that you’d had your eyes on or take an evening off from your side hustle to watch movies and hang out with friends. 

Knowing that you can take mini breaks to celebrate during your debt repayment journey will give you something to look forward to. 

Embrace the Journey 

Finally, we recommend that you embrace the journey. Being in debt doesn’t have to be your future, but it is your reality right now. Personal finance is a marathon and not a sprint. This means you’ll be in different places of your journey at different times but choosing a perspective of gratitude can change your entire outlook.   

Don’t beat yourself up for past money mistakes you made. Instead think about how your debt may have helped you and how this experience will benefit you in the long run. 

Create a realistic budget that allows you to make payments toward your debt. Don’t forget to budget for fun and entertainment as well so you’re not completely deprived.  

Realize that unexpected expenses and circumstances will pop up along the way. You may fall off track but that’s okay because you can always start again and overcome any setbacks.  

Tell family and friends about your debt payoff journey so they can offer support and embrace the process right along with you. 

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